Wednesday, January 7, 2009

Bailouts and the Undead


If property rights (though not necessarily intellectual property rights, for reasons we’ll discuss at tonight’s 8pm debate) allow resources to flow in an efficient, voluntary fashion to their most-valued uses (as suggested in my Monday entry), while government causes resources to flow in an inefficient, coerced, and arbitrary fashion (as suggested in yesterday’s entry), we should constantly be on guard for legal changes that blur the line between the private (that is, private-property) sector and the public (that is, government-controlled) sector. Every dime transferred from the private to the public sector is a tragedy, another instance of waste and lost opportunity — lost human happiness and potential.

Needless to say, then, any decent-but-misguided person (some libertarians among them) who voted for Obama should be feeling great chagrin now as the president-elect (after picking Leon Panetta to run the CIA and reportedly CNN medical reporter Sanjay Gupta to be Surgeon General, which should at least irk his old sparring partner Michael Moore) readies a $1 trillion “stimulus” package of government spending — every dime of it, of course, having to be yanked out of the private sector at some point, like all of government’s stolen — and then “magnanimously” doled-out — loot. The Wall Street Journal estimates that the stimulus package alone costs twice what FDR’s entire New Deal did, in inflation-adjusted dollars. This is the end of something.

On the bright side, rhetorically, I have to love the fact that the term “zombies” has been used in recent months for propped-up, government-subsidized, bailed-out firms that aren’t really functional. Clearly, this highly pejorative term was not focus-grouped by government spin teams. It’s simply too accurate — and well-timed, since this is a month of the undead at the cinema (witness the abominable and David Goyer-discrediting The Unborn, as well as the vampire movies Let the Right One In, Twilight, and Underworld: Rise of the Lycans, this last being the story of an actress named Kate Beckinsale being replaced by an eerie duplicate named Rhona Mitra — and in the more distant future lies the apocalyptic all-out zombie armageddon film World War Z, from the director of Quantum of Solace and the writer of Babylon 5 and The Changeling).

I wonder, though — to touch on a major controversy among horror nerds — will these “zombies” be the fast-moving kind or the slow-moving kind? I suspect they will start out fast and get slower and slower, and stupider and stupider.

P.S. On another bright rhetoric note, though, I like the fact that even amidst America’s Obamania, cynical, weary, derisive headlines like this are becoming the norm:

“Bailout du jour: U.S. government unveils plan to rescue Citigroup”

The Reason Foundation notes that the main bailout bill contains a $94 million U. of Miami parking garage among other things. You know, I don’t care if they say the world’s going to end, I think the strict-anarchist position that they can’t be trusted to spend a dime looks increasingly reasonable. Wanna end poverty? Find a way to do it without my money. Business in dire need? Close it and try starting another someday. Wanna liberate Iraq? Hire mercenaries, etc., etc.

Instead, we find ourselves in the bizarre, historic position of wondering whether the nice left-wing black man will give money to desperate, needy investment bankers. Strange. Stranger still, there’s talk of bailing out credit card companies — and bailing out credit card companies while taxpayers pay their taxes using credit cards seems oddly circular somehow…

But then, as economist Don Boudreaux has noted, way back during the first New Deal some journalists had already figured out that bankrupting industries was a clever first step by the government on the road to socializing them. So at least there’s a plan at work.


dave said...

…….give money to desperate, needy investment bankers.

Is that really what you think is going on?

Todd Seavey said...

Plainly, it is my contention that those seven words capture the financial crisis — including all its myriad causes, ramifications, and proposed countermeasures — with both nuance and accuracy.

Has someone suggested there’s more to the story?

dave said...

I think you’re adding gorilla dust to your argument. Whereas clearly it’s absurd for the government to intervene to help a small number of rich people, you’re side-stepping the enormity of the problem the government is addressing. The money was for the operation of businesses of all kinds – honest businesses, not investment banks, but their clients.

I’m just saying, don’t sidestep your point. If you think the government is wrong for injecting liquidity into the credit markets – making it possible for companies to pay operating expenses, including payroll – then make a case for A. Why it’s not a crisis. or B. How free markets might address the problem.

I think there is no need to minimize the enormity of the problem the government is addressing – perhaps there is a free market answer. I don’t know one – that’s why I read your blog. But you’re minimizing the crisis, and thus not really addressing the issue.

Todd Seavey said...

Not pooh-poohing the crisis itself so much as worrying about the nature of the bailout(s) — which naturally leads to things like this bit of news, pointed out to me by very-serious evolutionary psychology researcher Diana Fleischman:

Todd Seavey said...

By the way, combining some of the important themes addressed above — and raising interesting questions about IP that we can address at tonight’s debate — here’s an anthologized comic book miniseries about a man who decides to use real zombies, including undead famous people, in his porn productions:

This raises ethical questions on more than one plane of reality.

dave said...

Here is another question. Is it possible to expand the definition of protecting property rights? In this case, a lack of available commercial paper – which I think was the crux of the crisis – could stop businesses from honoring their contracts regarding payroll, rent, etc. And by extension, people from paying mortgages etc. Is it protecting property rights for the government to intervene?

I ask because I am trying to get behind the idea of strict property rights, but I feel like I don’t have enough of a case. But, perhaps I’m thinking too narrowly. Here is another example. This morning, I was thankful that the town salted the streets, and cursed the homeowners and shops that didn’t. Is protecting commerce – by salting the streets – protecting property rights? Beyond weather, do public roads serve to protect private property by allowing people to use that property. If there were no public roads, what would stop eight neighbors from cutting you off from your acre of property?

By the way, I think characterizing the bailout as helping desperate investment bankers is what inspires porn actors (or whoever, I didn’t read the article) to ask for a handout. Or even car companies. If characterized correctly, one can reasonably tell Dirk Diggler, No, of course you can’t get a tax support bailout because a vast swath of the nation’s businesses don’t depend on you in order to pay their employees.

The car company situation I understand less about, but if the US didn’t have a domestic auto industry, wouldn’t we be more susceptable to losing a war with, say Japan, who I think still has auto companies. Didn’t auto companies make tanks last time we were at war with Japan? And isn’t protecting the nation a libertarian view of Government’s role?

Todd Seavey said...

Long story short (I have a debate to go host): services that are valuable could be arranged for and paid for by those who ostensibly value them — people should put their money where their mouths are otherwise you get people unwilling to pay for their own paperclips while insisting, quite fairly but very inefficiently, that they will have to be supplied with paperclips in order to function as businesspeople.

cb said...

At this point, the mention of beaurocracy-minded zombies demands a link to a YouTube video of the hilarious Jonathan Coulton (JoCo) song, “Re: Your Brains”

The “Code Monkey” and “Future Soon” songs are probably better, but less on-point. ;-)

mark said...

It’s probably off-topic, but that Slate article really drives me nuts. From a film history POV, 28 Days Later was not the first film to feature fast moving zombies. That honor goes to an American film, Return of the Living Dead, made in 1984.

Todd Seavey said...

The Jonathan Coulton songs are outstanding, cb, and I imagine you sympathize more than a little bit with “Code Monkey” — as do I with “Future Soon.”

cb said...

Someone on slashdot just posted a link to an article requesting healthy brain donations and tagged it as

“from the we’re-not-unreasonable-I-mean-no-one’s-gonna-eat-your-eyes dept.”

This is *presumably* a coincidence, unless “samzenpus” is a big fan!

cb said...

Oh, and I think The Future Soon is a better song and better music, but Code Monkey does speak a bit more to my hacker soul…

LT Nixon said...

Great post, Todd! You’ve managed to connect something I definitely understand (zombie-related cinema) to the confusing hype and punditry behind creeping socialism. You have my utmost respect, sir.

Dirtyrottenvarmint said...

Stop drinking the Kool Aid dave. It is sour. It is not possible for an economic crisis to be caused by a lack of commercial paper. Paper is a useful item, but commercial paper is just numbers on a computer screen.

(For the uninitiated, the cause of this depression was that a lot of people thought that numbers on a computer screen were a productive asset, and went out and built and bought a bunch of crappy homes and other stuff for astronomical prices they figured they would pay off with computer funny-money, and are now realizing that you can’t eat a credit default swap nor, in fact, can you even burn it to keep warm while you huddle in your Obamaville recycled cardboard box and beg strangers for Boone’s.)

Also, as a historical point, while it is true that in fifty years ago the automotive companies played key roles in militarily strategic industries (Chrysler designed the M1 Abrams tank), these days all this stuff is produced by defense contractors such as General Dynamics. So the argument that car companies are somehow “strategic” is about a generation out of date.