Bailouts for every industry?

The Homo Economicus — Sat, 18 Jul 2009 04:55:00 +0000

There is a lot of uncertainty about the current economic measures of Obama’s administration, and this in turn brings – of course – a lot of criticism as well. One of the most well based criticisms – in my opinion – regarding the bailout to private banks is about moral hazard. If the banks know that the government will come to the rescue everytime they are near to bankruptcy, then they won’t have incentives to behave efficiently and assume less risks in their day-to-day operations. Keynsian economists are against this last argument, because they say that it is the duty of policy to bring the economy to the level it was before, either by “injecting” more money in the economy and keep it running, and also to allow the same level of credit operations that were before the crisis (therefore, the important need to avoid private banks going out of business).

However, as we know, not only the banks are in this category of “in the need of bailouts”. The american auto industry is also in this category, and as such, other private enterprises.

What about other industries? Who decides which industries – that have firms going out of business – are worthy of a bailout? From all the industries I’ve been thinking about, I must admit, my imagination never thought of the Adult Entretainment Industry! Please see the link below:

http://www.taxfoundation.org/blog/show/24182.html

"The NINJA Crisis"

The Homo Economicus — Mon, 04 May 2009 00:04:23 +0000

The NINJA (no income, no job or assets) crisis, as explained by its creator – Leopoldo Abadia – is the analysis of the causes of the current economic crisis explained in a very subtle and funny way. I am sorry, it is in Spanish, and I didn’t find it with English subtitles. If someone finds it out there, please send it to me.

You will really enjoy it!

A Blog About Nothing » Economic Crisis

Bailouts for every industry?

"The NINJA Crisis"