Having relinquished the moral high ground by bailing out preferred insiders in the investment banks, the Goldman Sachs administration and President Paulson now have to decide who shall be the winners and losers in the auto industry next. The functional argument is that if you dont bail us out with public money, we will go bankrupt and the public will pick up the tab for the lost retirement and healthcare costs of the defaulted pension and retiree health benefit plans of GM and F.
The expedient knee jerk reaction is giving rise to a generation of MBAs who will be focusing on how to secure a greater portion of the dwindling stream of income that can be extorted from the public thru taxation. If you say yes to GM and fund them to pay workers to not make cars that no one wants to buy, who is next? And with 65% of the economy being service related, I suppose Starbucks is preparing their presentation now as to why a $3 cup of coffee is essential to our economic well being.
Central planner will no more be able to figure this out han the real planning experts in the former Soviet Union could. We will look like amatuers compared to them, but the result will be the same. economic collapse, only sooner.