Thursday, January 29, 2009

Divine Right of Stagnation-Bailout Edition

The stream of bailouts the federal government has dished out passed ridiculous about a year ago and has now entered a realm the Aldous Huxley could not have imagined even with the aid of his most powerful hallucinogens. Perhaps the porn industry's request for a bailout was more absurd than the latest travesty, but today's example is more insidious:

Rental Car Firms Seek a Bailout

Pertinent tidbits of info are as follows:

"Now, Avis Budget Group Inc., Hertz Global Holdings Inc. and other rental-car companies are lobbying Congress to allow them to use Troubled Asset Relief Program funds to finance new auto purchases. The House of Representatives included a clause in a TARP reform bill that it passed last week to give the government authority to back loans to rental-car companies and other fleet purchasers. The bill has now moved on to the Senate."

"'If our desire is to get car buying and credit flowing again, enabling people who buy hundreds of cars at a time is a good way to do it,' said Steven Adamske, a spokesman for Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee."
This just shows that it is not the health of the economy that politicians like the above-mentioned asshole intend to promote with their bailouts. It is the health of the current economy, specifically the businesses that currently exist and have pull in Washington. Barney Frank doesn't want his friends at Avis to lose their jobs. Still, just as with GM and Chrysler, no amount of federal money will make people want to buy their product. Futile though this attempt is, however, it has the much more harmful effect of preventing new, better firms from rising and taking their place. If large banks fail, yes people will lose money. Soon, though, smaller, better-run banks will take their place. When GM and Chrysler go down, smaller more efficient car manufacturers will rise and take their place. That is, of course, unless you stop them by constantly backing their competitors.

You can't bailout a firm that doesn't exist yet, and that firm has no chance because it has no lobbyist in Washington. Politicians would rather bring our economy to a screeching halt than see one of their friends (read: campaign donors) have to look for work. Directive 10-289 is not far behind.

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