Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10 5/3/83; site utzoo.UUCP Path: utzoo!laura From: laura@utzoo.UUCP (Laura Creighton) Newsgroups: can.politics Subject: Re: The non-interference society; judgement in haste? Message-ID: <4257@utzoo.UUCP> Date: Wed, 22-Aug-84 09:39:36 EDT Article-I.D.: utzoo.4257 Posted: Wed Aug 22 09:39:36 1984 Date-Received: Wed, 22-Aug-84 09:39:36 EDT References: <8712@watmath.UUCP>, <179@looking.UUCP> Organization: U of Toronto Zoology Lines: 59 IAN!'s ``saved needy factory'' is precisely the sort of thing which politicians use to play ``show and tell''. You can have a lovely song and dance about ``what a good thing has been done'' but it is what they *aren't* telling you that is significant. Consider the situation where a company needs 20 Million dollars or it will go bankrupt. Suppose the 20 Million dollars is available in tax money. And, to take IAN!'s example, suppose (worst case?) nobody pays for the needy factory and everybody pays car payments. What has happened? Well, first off, that needy factory goes bankrupt. But at the same time the auto manufacturers get a lot of money - because people who otherwise would not be able to afford cars will be buying them. The auto manufacturers will have to increase production. They will hire more people. There will be increased demand for steel -- the steel industry will get a lot of money. And the banks will get a lot of money to invest where they see fit. Actually, it is unrealistic to assume that everybody will be buying cars. But they will be buying *something*, or leaving their money in the bank where the banks can invest it, or investing it themselves. The ``needy factory'' benefits -- at the expense of all the other industries who are competing with it for as much of the 20 Million dollars as they can acquire. However, from a politician's point of view this can be used to great advantage. First you bail out the factory, and then you watch the auto industry decline, and then you offer to bail them out as well. You don't have to worry about the smaller companies who will also be effected by the subsidies to the needy factory -- if the software company that I run out of my basement goes out of business because nobody is buying games for the Apple ][ because they are all paying taxes to support the needy factory -- well, Laura only has one vote anyway. If all else fails you can get up on your soapbox and talk about the econony in the same way that you might describe a hurricane, or an earthquake, or the magic of the witch-doctor in the next tribal village. Using this technique you can either proclaim that ``my magic is stronger than the next guy's'' (and launch a new government scheme with a lot of rhetoric) or completely hide the fact that the government is in some way responsible for any of it. If you are really slick, you can do both at once -- say launch a government program to combat unemployment while at the same time not making any connection between ``deficit spending'' and ``inflation''. Is it really a good idea to bail out the Frozzbozz computer company (especially for the Nth time, as keeps happening with many companies I could mention)? The demand for the goods produced by the companies that would receive the money that the government wants to allocate to Frozzbozz is demonstrably real. The demand for the goods which Frozzbozz claims it is going to produce may only be a figment of some politician's imagination -- or something which he thinks will look good on his record next time he goes campaigning, or next time he wants to outdo another elected politician for a government position. And what if Frozzbozz's real problem is that it can't compete with the Gimpex computer company because Gimpex received a 15 Million dollar grant last year... Laura Creighton utzoo!laura