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Dec 6, 2008

Politicians Are Not Business Experts

Letter to the Editor of the Baltimore Sun
12/06/08 - by Don Boudreaux, Chairman of the Department of Economics at George Mason University.

[edited] If you wouldn't entrust your 401(k) to a senator, why support political investments in the auto industry?

You opine that Detroit automakers "need to explain in detail to Congress how they intend to succeed.

No. These companies deserve investment funds only if they are able to make cars that will sell AND can demonstrate this to private investors. Congress is manned by people who specialize in winning popularity contests called "elections." They are not expert in judging business models, or at pondering the pros and cons of different retail-distribution methods, or equipped to accurately analyze consumer demand for automobiles, or even aware (from their track record) of the most elementary principles of finance and economics.

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