The trouble with bailouts

By Megan McArdle

As we ponder bailing out auto manufacturers, I can't help but think of this classic from Tom Lehrer:

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Lots of industries are going to be in trouble over the next few years.  Airlines, for example; everyone cuts back on travel when times are hard.  Housing, of course.  Appliance manufacturers.  Hotels.  Construction.  Computers.  Indeed, every company that depends on someone buying something from them--which is to say, every company--is going to be hurting as consumption contracts.

Are we going to bail out all of them?  Where will the money come from to do this?  And if not, how do we justify just bailing out GM.  There is a rationale for bailing out the financial industry, and no one else:  financial collapses have brought on collapses in the real economy (ok, arguably, RBC people), while it's hard to think of a large, diversified economy that has been driven into depression by a single industrial failure, no matter how big the company.

Then there's our nation's most vital business of all:

More importantly, what about the journalism industry? What about us - my friends and co-workers, and friends of friends and co-workers of co-workers, who've spent the last five years watching our business slowly circle the drain? Doesn't America need the New York Times as much at it needs the Chevy Cobalt? Isn't the Star-Ledger as important as the GMC Savana? Sure, GM employs roughly five times as many people as all all of America's newsrooms combined - but that just means that we'd be much, much cheaper to bail out! GM needs $25 billion, but we'd settle for, I dunno, five billion? Pocket change, in other words! And we'd be so, so grateful. If you think your coverage couldn't get more lovey-dovey than it already is, Mr. President-Elect, the magazine and newspaper editors of America stand ready to prove you wrong - and all for a fraction of what it took to bail out those ingrates on Wall Street.

Now, you know that normally, I'd take the libertarian side and argue against this.  But the news business is special.  Without us, you wouldn't know anything.  Besides, it provides millions of low-paying, insecure jobs to overeducated yuppies who are going to move back home, into your basement, if you don't do something, quick. 

And the news business is the other industry that can, all by itself, send the real economy into a tailspin.  You think you're worried about a depression now?  We could make you really depressed.  I'm not threatening, or anything; I'm just saying, it's a nice country you've got here.  It would be a real shame if someone convinced consumers to stop buying Blu-Ray players and shift their savings into canned guns and ammunition.

Which reminde me of another Tom Lehrer classic:
 
See web-only content:
http://www.theatlantic.com/business/archive/2008/11/the-trouble-with-bailouts/4353/

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