Posts Tagged ‘#TCOT’

#TCOT Round 2: Convince Me I Am Wrong on Auto Loans and I Will Publicly Recant

December 13, 2008

One of the first things that drew me to new media applications like Twitter and FriendFeed is the way in which they exponentially expanded our ability to share our thoughts and engage in debates over ideas. The downside to all of this is that once we choose to put our ideas and opinions out there there is no taking them back.If your assertions are proved wrong you can either retain your credibility and acknowledge the error of your ways and recant or dig in and make it clear that you are no friend of truth.

I don’t ever want to believe in or continue defending something that has been proven wrong so when I directed this post at the #TCOT (Top Conservatives on Twitter) community that I have recently become a part of I did so in the hopes that it would bring me a greater depth of argumentation than the rampant hyperbole I had been exposed to up until that point.

If the central goal and driving force of the #TCOT community is going to be something other than the advancement of realistic, practical and achievable solutions that are founded on conservative principles and that provide the best possible outcome for our nation then I want nothing to do with it. Here is the community’s chance to prove their intentions.

As one who believes that, generally speaking, limited government and freer markets provide the greatest benefit for the greatest number of people I would GREATLY prefer that our government not loan money to our beleaguered auto makers. However, I also mentioned that I believe the world we live in does not usually allow us to choose between exactly what we want and what we do not want. Our choices are almost always between options that each carry with them their own harms an demands that we decide which option is best.

In my previous post I laid out some of the general assumptions that have lead to my support of providing the auto makers with loans. I have never and will never claim to be the final authority on in-depth economic theory and analysis. Like most of you the best I can do is listen to the arguments, research and educate myself on the issue and decide which policies I will support based on my own common-sense understanding of which option will provide the best outcome.

Even so it is undeniable that the dynamics of the current state of our economy and the intricacies of the auto manufacturing industry provide an enormously complex web of considerations that must be taken into account when deciding whether or not to support the extension of loans to the auto industry.

As a result I wanted to provide a research document that clearly lays out a detailed anaylsis of the potential costs associated with providing the loans as well as a conservative effort of the possible outcomes of the further collapse of part or all of the auto manufacturing industry.

Here is a report that the Anderson Economic Group recently released clearly laying out what they believe are the likely costs of providing or denying the auto makers access to these loans.

Even though it is not the full report it very clearly lays out the assumptions and supporting evidence. Take a look at it and share your thoughts on where the report or I am wrong in our thinking.

If you can provide me with enough logical arguments I will happily change my opinion and publicly recant my support for the loans.

I am curious though – if you find enough evidence to convince you that it will do more harm not to provide the loans – will you do the same?

In the interest of full disclosure my current employer as well as the company that owns our parent company do work for Ford Motor Company. However, these are my own personal opinions and should in no way be taken to reflect or represent the thoughts of my employer or our parent companies.

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#TCOT Why This Conservative Currently Supports the Auto Loans

December 13, 2008

I’ve experienced a decent amount of condescension from my fellow TCOTers for questioning the wisdom of denying the extension of loans to our auto manufacturers. I wouldn’t mind it so much if the condescension was attached to arguments that addressed anything resembling the world we actually live in.

As my friends on the other side of the aisle can tell you I will argue all day long that, generally speaking, limited government and freer markets provide the best outcomes for all. Unfortunately, we live in a world that often demands that we make difficult decisions between two less-than-ideal choices.

Telling me that the White House and Congress are not a bank is not a valid argument. Of course they aren’t but, and I’m just spit-ballin’ here so correct me if I am wrong, I am fairly certain that the legislation would direct the Treasury Department to loan the money.

I don’t want the Federal government to have to loan the auto manufacturers this money. I would prefer that our auto makers be able to pull themselves out of this hole themselves but that’s not the only consideration in this process.

My belief in limited government and the power of free markets is, at some point, theoretical in nature. WAIT. STOP. Before you freak out let me explain. I say somewhat theoretical because “limited government” is a fairly vague phrase – if you were to be successful in making your case over time then the logical end to the statement “government should always be smaller” would eventually be no government. That’s obviously a silly thing to advocate so while we may believe that smaller government is better, we also acknowledge there is a need for government involvement of some kind.

The same goes for free markets – having studied economics and been blessed with the basic level of common sense that comes with being a human I believe that, generally speaking, markets that are more free to operate provide a more efficient means of producing wealth. But an absolutely free market has NEVER existed on a, economy-wide scale. On a continuum that has a purely unregulated free market on one end and a 100% government owned, regulated and controlled economy on the other, the US economy is certainly much closer to the purely unregulated free market than say, France’s. BUT we still allow for some government regulation because we have seen that human nature is such that the harms caused by no government regulation eclipse the harms caused by some government regulation.

My point? No matter how firmly we may believe in the core tenets of our ideologies we obviously recognize that the world we live in does not allow us to implement solutions in a vacuum.

It is for that reason that, after surveying the potential harms of the only two options we have been given (provide the loans to the auto industry or do not), I have determined that the potential damage that could be caused by not providing the loans GREATLY outweighs the potential damage that could be caused if we do provide the loans.

Let me end by briefly laying out some assumptions that I have made as I have made my decision.

* I believe our economy is already in a precarious state and that exacerbation of the adjustments the auto industry had already begun to experience years ago would have devastating effects on our economy

* I believe that that the inter connectivity of our auto industry’s part suppliers and auto dealers as well as the national security implications of losing US-based ownership over our entire auto manufacturing industry confers an importance on the auto industry that, like our agricultural industry, is unique and there fore worthy of aid that I would not support for other industries

* I believe that these are loans, that the last time we loaned money to an auto maker in trouble our government was repaid and made several hundred million dollars on top of that

* I believe that the severity of the threat the collapse of our auto manufacturing industry is great enough to make the provision of a relatively (compared to what has already been outlaid for banks) small amount of loans a reasonable solution, even if there is a risk that some or all of the loans will not be repaid

and to reiterate – most importantly:

* I believe that the potential negative impact of not providing the loans is outweighed by the potential benefits of providing the loans

I have tried to lay out some of my reasons for supporting the loans and make it clear that my goal is to support the solution that I believe provides the best outcome.

If you can provide compelling and logical reasons why I should value something other than the best outcome or why the assumptions I have used to make this decision are wrong I would love to hear them.