"Please sir, may I have s'more?"

Two of the "Big Three" in the auto industry, GM & Chrysler, find themselves on Washington's front step on their knees begging for again, more money.  GM announced last week that they wre going to lay off 10,000 employees because the government told them they had to "manage their labor costs." They're also offering early retirement options. But you thought GM was bad? Chrysler has 32,000 jobs ready to be erased from the payroll. The companies already asked for 9.4 billion (GM) and 4 billion (Chrysler), and are coming back for more...and by more I mean 4 billion (GM) and 3 billion (Chrysler). How is giving more money to these companies going to solve things? If you have a good or service that people want, they will spend money and buy it. Currently people don't want to buy cars. So instead of dealing with it, they run to "The man". Throwing out money to every failing company like candy at a parade is not going to help things in the long run....Why doesn't the entrepreneur down the street get the money they need? They're filing for bankruptcy as well. Just because the government throws down some money does not mean that people are buying cars...It stops the flow of the free market--Instead of putting the money in the hands of the people, the government is beginning to overstep their boundaries.  Laissez-Faire, or pure capitalism, is to keep the government from interfering with the economy. Currently we're not doing that, and as to just regular capitalism? The "use of markets and prices to coordinate and direct economic activity"? We're not doing that either. Put the money back in the hands of the people. Give it to us and tell us we have to buy a car with it. Its probably way more complicated than that, but if I was given money and told to buy a car with it...I'd be much happier- and so would the auto industry. I'd have a new car, and they'd be selling some. 

-CH

What's more important, a price reduction or sustaining competition?

On Wednesday of this week, Rudolph T. Randa (a federal judge) declared Wisconsin's mark-up gas law unconstitutional. Okay, but what is the mark-up gas law exactly? It was a law that has been in effect for 70 years now, passed in 1939. The law prohibits gas retailers from charging their customers less that what it cost them to purchase the good. The law also requires the same retailers to mark up their gas by 6% of what they paid, or 9.18% higher than the average wholesale price (they choose the higher of the two). Judge Randa claims this law to be a restriction on trade, but is this law really that bad? Should it be "struck down" as the article explains it to have been? Personally I believe that by eliminating this law the small business owners in the state of Wisconsin will suffer greatly, along with the consumers. The larger companies will be able to set their own lower prices, allowing for them to slowly but surely push the small man out. This is a complete depletion of competition, a main characteristic of our market system. Along with decreasing competition comes a decrease in supply. Although the lowering of prices by the larger gas chains will seem just "dandy" at first it will all have to come to an end. As I said, the decrease in competition will also cause a decrease in supply. When supply decreases, ultimately the price increases since there is less of the demanded good. In conclusion, I can only hope for an appeal, as said here, ""We're hoping for an immediate appeal ... to make sure consumers are protected from a less competitive marketplace," Hauser said.". It would only hurt the consumer in the long run if we were to encourage large gas companies to run small, self-owned companies out of the competetive market system. The effects on both the consumers and on small company retailers of striking down the mark-up gas law should be thought over more thoroughly.

-SC

Heroes? Or Desperate for Employment?

Many children grow up hoping and dreaming to be  firefighters, but usually as they get older, the appeal of running into a burning building dies down. They settle for jobs with less excitement and fill the cubicles of corporate America. But these days, apparently, fire is looking pretty appealing. In Miami, Florida, news of job openings for firefighters at Miami Fire Department spread like rapid fire, and soon there were almost a thousand people camping out 48 hours before the job interviews would begin. With a 7% unemployment rate, the demand for jobs is at a high. ""I think that it's almost a call for help," said Aszurdee Jeff, a recent Florida State graduate. "Desperation you know being that the economy is not stable.  It's a lot of people that really want the stability."" Stability is the prize, and an inelastic one at that. 

-CH