Read more about the article Better the devil you know?

Better the devil you know?

Now, if this was a Knight of the Round Table, bearing the sword of Exkalibur, that would be one thing. Alas, not.

Rather, it’s an insidious invader disguised as a heroic force, riding to the rescue of American companies facing catastrophic economic ruin. So, as I watched portions of the Congressional hearings this week featuring the CEOs of America’s automakers, I couldn’t help but think: Where did the congressmen and senators learn about the auto industry?

How are they qualified to assess the business plans of the three U.S. automakers? (more…)

Continue ReadingBetter the devil you know?
Read more about the article Six Degrees of Separation . . . may mean failure!

Six Degrees of Separation . . . may mean failure!

Lately, I’ve become increasingly skeptical that the steps being taken in Washington are close enough to the source of our economic problems to be successful. A recent New York Times article reflects on the new consumer aid program, for example. The TALF program (Term Asset-Backed Securities Loan Facility) will lend $200 million to private investors who will buy securities backed by auto loans, credit cards, etc.

In theory, this will keep credit flowing freely from lenders to borrowers but I’m dubious of this trickle-down expectation. If Keynes is right that the locus of economic turbulence is insufficient demand, there are just too many places “twixt the cup and the lip” for these incentives to go awry and for the stimulating effect to dissipate.

(more…)

Continue ReadingSix Degrees of Separation . . . may mean failure!