Category Archives: Business

Stossel on Journalistic Bias

John Stossel documents his transition from a typical left-wing government-knows-best journalist hack to a thoughtful free-market libertarian — and the price he paid to make that journey. The experience has given him a unique perspective on the issue of bias in journalism.

Reporters who think coercive government control is generally good and I, who thinks voluntary market forces are generally better, both have a point of view. So why am I the one called biased?

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He Owns It Now

From the Politico:

The Obama administration asked Rick Wagoner, the chairman and CEO of General Motors, to step down and he agreed, a White House official said.

As Obama continues to wriggle his way into the operations of American private enterprise, he is increasingly setting himself up for responsibility for the outcome.

Americans will rue the day they elected this man as President.

UPDATE: Mickey Kaus calls Wagoner Obama’s Ngo Dinh Diem. For the uninformed, Diem was the corrupt President of South Vietnam, who was assassinated in 1963, alledgedly with tacit CIA help. Diem’s removal marked a turning point in the war, with the U. S. increasingly responsible for the conduct — and eventual outcome — of the war.

Wichita to Obama: Come Visit

Wichita city leaders have issued a formal invitation to President Obama to come to Wichita, “to see the aircraft industry firsthand and to recognize that corporate jets are ‘an essential part of our economy.'”

This follows Obama’s earlier remarks denigrating corporate executives who fly on small business jets.

Wichita is home to several major aircraft manufacturers: Boeing, Cessna, Hawker Beechcraft, and Bombardier, as well as hundreds of smaller suppliers. These operations employ tens of thousands of workers. Business jets are a critical part of what these companies do. So the President trashing business jets didn’t set well with folks in these parts.

Will Obama accept the invitation? I doubt it. In fact, given his administration’s record of extremely poor accessibility, I doubt that he will even hear of this invitation.

The Negative Wealth Effect

Robert Samuelson gives a simple explanation of why recessions happen — and how a recession can turn into a depression.

The “wealth effect” refers to the tendency of people to adjust their spending as their wealth — concentrated heavily in housing and stocks — changes. When wealth rises, spending strengthens; when wealth falls, spending weakens. For the past quarter-century, higher stock prices and home values propelled the economy forward by inducing Americans to spend more of their incomes and to borrow more. , , , ,

But now the wealth effect is reversing. As stock and home values drop, Americans are scrambling to increase savings and curb spending. . . . Everywhere, financial commentators urge “belt tightening” and more thrift. If the swing toward saving is too sharp, consumer spending wouldn’t just weaken; it would collapse.

But the solution is not a return to binge spending. We just need to be patient.

With time, economic slumps correct themselves as borrowers repay debts, surplus inventories are sold, industries consolidate and government policies promote recovery.

Why GM Is in Trouble

Alex Taylor III is a senior editor at Fortune Magazine, who has spent the better part of his career covering the automotive industry. Over the years he has seen a lot of changes at GM — but not the kind that were needed to save the company.

The story of General Motors since the 1960s is a tale of accelerating irrelevance. Customer preferences changed, competition tightened, technology made big leaps, and GM was always driving a lap behind.

Should the government bail GM out of its financial tailspin?

If Washington wants to bail out GM, it’s fine with me. A lot of short-term angst will be avoided, and taxpayer money has been spent for worse purposes. But you have to wonder whether the insular, self-absorbed culture that still dominates GM is up to the job of restructuring the company quickly enough to make it profitable and competitive again. GM has been on a downward path ever since I began covering it. What is going to make it different this time?

Going-Out-of-Business Sales Aren’t

This confirms what I always knew from personal experience: Those “slashed prices” at going-out-of-business sales are discounts from inflated prices, not the normal pre-sale prices. The “sale” price may not be any lower than what you can find elsewhere.

Going-out-of-business sales are more of a play upon human psychology. “Retail is all about excitement, to get people into a store and get them into a mood to spend money.” . . .

But it’s not necessarily a rip-off racket.

It’s not that you can’t get good deals at going-out-of-business sales. You can. Just don’t assume the prices are lower there. You need to shop around as you would with any other purchase.

A Bailout for Detroit?

Cal Thomas, on why a federal bailout for the big three automakers is a bad idea:

The argument made by those favoring a bailout of Detroit is that it will save more than 100,000 jobs in the auto and related industries. But what good does that do if people are not buying cars in sufficient numbers to allow the Big Three to make a profit? This becomes the kind of corporate welfare Democrats decry when it comes to Wall Street. But, then, Wall Street isn’t unionized and Democrats want and need the union vote.

A free market is a powerful shaper of ingenuity — if the government will get out of the way and let it operate.