Has anyone seen this?
Article on CNN.com by UC Berkeley econ professor
He has various suggestions for Obama’s first 100 days. The suggestions seem to make sense to me, but what the hell do I know. One is to let the automakers go into Chapter 11 but be prepared to fund them (debtor-in-possession) if they can’t borrow due to the credit crunch assuming they have a viable business plan.
Anyone care to discuss?
Rob
I just read this and thought there were some major stupidities that made me question this guy’s viewpoint. He only puts forth four main points (credit crisis, infrastructure stimulus package, auto manufacturers, and free trade), two of which I have issues with:
What measure does he use to say, “Banks are not lending”? My understanding is that they are; I forget what the cited measures are called, but I’ve seen a few posters here mention them. Of course, this doesn’t address the “using bailout money for bonuses” (which I do take issue with), nor is it a return to the halcyon lending days of just a couple years ago (which seems to be his measure of whether the bailout is successful). Without backing up the premise, though, it’s not worth considering his solutions.
His suggestions on the auto industry are terrible. He wants the government to provide “debtor-in-possession” financing (as you point out, assuming they have a viable business plan)? Here’s one problem with that: a “viable business plan” is usually determined by success in the market. Gah…let’s hear it for circular reasoning. Then he says the government should guarantee the auto companies’ warranties? Why on earth would anyone want the government involved at that (low) level?
So, he gets a mark of 50% from me.