Thursday, February 5, 2009

Dress Shops, Auto Part Makers, Beekeepers, and My Borther's truckkng Company: How Do We Choose Which to Bail Out?

One of those "you could never make this up" headlines appeared on today, as the Communists on Wall Street, and in big business, continued to beg for central planning bailouts of their favored companies. And labor unions coninued to lobby for their favored companies. And....Oh, why go on.

"Auto PARTS makers line up for U.S. bailout" was the headline. Again, why do auto parts makers deserve a bailout more than other businesses? You say that the automaker woes have hurt them? So what? Those woes have hurt the trucking industry too, even though my brother (that co-owner of a trucking company) is not getting a bailout, although he probably should read the Democratic pork "stimulus" bill carefully to be sure of that. Is anyone proposeing to bail out dress shops in Detroit because the automaker woes have hurrt theM?

Why do we not bail out dress shops across the country? You say they are not important? Uh-huh. You make that argument, and make a fool of yourself. I don't feel like it today. I am always in enough trouble with women. You say it is not "cost efficient? Uh-huh. You are just determined to make a total fool of yourself, aren't you.

Let me assure you. Bailing out your average dress shop is bound to be more efficient and cost effective than bailing out Gerenal Motors. That is because of the sheer magnitude oft he problems General Motors has, which make aany government bailout of that company so problematic.

I have analyzed this question with regard to my brother's trucking company, where my brother is not nearly in as bad shape as General Motors. He actually has a plan that should work. But he does not have enough cash. I have shown, in this blog, that bailing out companies like my brother could directly save 5 million jobs in this contry, with more certainty than bailing out General Motors. But let us do the same analysis with a hypothetical dress shop.

Say the dress shop employs 5 people. Assume that $100,000 will get that kind of dress shop through these "hard times". Assume it will eventually take 100 billion dollars to "save" the automakers (for ease of calculaton, and it is probably close to the truth). There are a thousand "million dollars" in a billion . There are ten $100,000 increments in a million. So there are 10,000 "dress shop bailouts in 1 billion dollars. In 100 billion dollars, there are 1 million dress shop bailouts ($100,000 times 10,000. That means that you "save" 5 milllion jobs by using the automaker bailout money to bail out dress shops. Oh, you can quibble with some of my figures. But it will not change the basic point I made with my brother's trucking compnay (using a 25 billion dollar auto bailout figure, and my certain information about my brother's business). There is a solid case to be made that bailing out dress shops across the country would be MORE cost efficient than bailing out GM. The case is overwhleming for small businessses, such as my brother's trucking company, which are more labor intensive than dress shops (and I am probably understating the average number of employees per dress shop of any size).

You say that it makes no sense to bail out every business in America? EXACTLY. But why choose one business over another. Why do auto parts makers, automakers and banks deserve to be bailed out more than dress shops? You could argue a thousand years and not come up with an answer to that one. As I have just explained, it is not obvious that bailing out GM is more cost efficient, and more effective in preserving/creating jobs, than bailing out small businesses (at a much lesser bailout cost per business). No one is makng a study of this, because no one in charge cares. Leftist Democrats just want us down the road to socialism, and they don't care if what they do makes any real sense. Ditto with President Bush and Henry Paulson, who simply panicked and did not know what to do. It is EASIER to talk about bailing out banks and GM. That does not mean it is BETTER. That case has never been made.

You still say that you don't see that dress shops are important to the economy, even if it shows you are a fool? Okay, what about beekeepers, fish farms, and the National Endowment for the Arts? Those are in the House Democratic bill, while my brother's compnay and dress shops are not--although, again, you would have to read the bill carefully to be sure of this. WHY? You know why as well as I do. In a central planning economy furn for the benefit of those favored by the central planners (the definition of "Communism", and if yu add in a "partnership" with big business and the financial community you have econmomic fascism), the winners and losers are determined by the government. There is no real relationship between the actuall, government favored winners an dlosers, and those who DESERVE to be the winners and losers. The beauty of a free market system is that the winners and losers are determined by the market. This may not always be fair, but at least one small set of human beings is not operating a system that guarantees unfairness. Every central planning system ever in existence guarantees maximum unfairness in a system run by fallible human beings--each with his or her own agenda.

Nope. This whole lurch toward central planning, and government determinations of the winners and losers in our country, is a terrible. mistake. Obama threatened today that we might not "recover" from failing to pass his pork "stimulus" bill. What we may t recover from is this massive turn towad the discredited theory of central planning.

By the way. As between banks and General Motors on one side, and dress shops on the other, I vote for bailing out the dress shops (much less my brother). As the recent electioin proved, I am definitely more feminist than your average leftist. I think I just proved it again.

P.S. "Dress shops" is, of course, a cath-all term for all of those myriad of relatively small specialty shops that cater to women. And I don't mean to suggest that there is no case for bailing out Avon ladies.

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