Car Czar

It looks like the “car czar” idea is dead. I suspect it will return like a zombie in a Grade B movie. Professor Mankiw has a suggestion .

Some economists prefer bankruptcy. Others favor government intervention. Many recognize that such intervention will always be too little and too late . But some get moralistic about it, as in this quote:

Economists have been calling for aggressive action for some time now (with some exceptions, and to the extent those exceptions have delayed policy, they have done real harm to people’s lives, people whose jobs could have been saved through earlier, aggressive action that was being called for).

Let’s back up a minute. The underlying problem is that we have people providing quantities of goods and services that consumers don’t want. Preserving jobs at any cost simply perpetuates that situation. Is society well served by such policy? Moving people into more useful work is painful for those involved, but is it more painful than having a society full of unwanted goods and shortages of what people do want?

Our society has conflicting ideas about the American Dream. On the one hand, we have this dream: if you work hard and follow the rules, you can have a nice house, two cars, two kids who go to college, and a good retirement. We also have an alternative dream: we can explore new frontiers, take risks, improve the world, and succeed or fail. These are not compatible. One is a low risk vision, the other a high risk vision. One offers comfortable stasis, the other vibrant but dangerous progress. One appeals to worker drones, the other to entrepreneurs. Most of us aren’t entrepreneurs, but it’s the entrepreneurs who make life better and allow American Dream #1 to exist.

What we actually experience is an uneasy compromise, with government sometimes doing things to promote American Dream #1 and sometimes American Dream #2. Government intervention to “save jobs” may have a certain inevitability about it. If I were in charge, I would also require something to save entrepreneurs.


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