Friday, December 12, 2008

Barney Frank's Error

'"No. We’re not propping up companies. That’s your mistake," he tells Stahl, who had asked him about taxpayer money going to prop up companies that had made bad decisions. "We’re propping up individuals. The world doesn't consist of companies. The world is people. The country is people."'

The implicit thrust of Barney Frank's argument is correct, we shouldn't prop up companies, but we should assist those people who work for them and whose livilihoods are seriously damaged by their employer's demise. However, Frank's response is in fact to prop up the companies or in other words, to protect those jobs.  Why should the American taxpayer have to subsidize a company so it can have the "privilege" of paying for an inferior product.  Ostensibly the taxpayer already has that privilege and has decided not to exercise it. A more promising and just route would be to let companies fail and provide their workers with unemployment insurance (for a limited duration), tranining assistance, gap coverage in their medical care (which wouldn't be necessary if the health system was predicated on employer provided health care but I digress), and relocation assistance.  

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