State-owned enterprises

[by JSC5]

A good illustration of the incoherence of our discourse about government-owned enterprises, from today’s NYT:

Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program of the Treasury Department, said both carmakers [GM and Chrysler] needed to shut down some underperforming dealerships. But it questioned whether the cuts should have been made so quickly, particularly during a recession. The report, released on Sunday, estimated that tens of thousands of jobs were lost as a result.

After having read and watched most of Mr. Barofsky’s congressional testimony for a one of my jobs, I can honestly say that I think he’s done a great job as Special Inspector General for TARP. This latest SIGTARP report, however, seems to suffer from a problem shared by just about all analysts, commentators, politicians, and academics who work on bailout issues and the problems of state ownership. What exactly are our goals with these bailed-out institutions? Should we run them for the public benefit, or run them as businesses to return them to profitability as soon as possible? Or do we have hybrid, competing goals?

I think conservatives (and the rest of us!) were worried that state-owned enterprises would get treated like adjunts of the state and be forced to operate suboptimally in order to support public goals like employment. It now turns out that the Administration, perhaps afraid this perception, has been very aggressive in pursuing profit-maximizing personnel cuts and dealership reorganizations. Does anyone think this will win the Administration any love from conservatives (or from the rest of us)? If anything, the Adminstration is now catching flack for not doing enough to support employment.

All I’m saying is, we need to decide what the proper goals for SOEs are. And then we need to tell SIGTARP, congressional representatives, and everyone else in the system, so that we don’t get whiplash going from shouts of “socialism!” to “free market ideolog!” in 2.6 seconds.

Advertisements

0 Responses to “State-owned enterprises”



  1. Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




Subscribe by email, feedburner

Subscribe by e-mail

or subscribe with feedburner

This is a group blog. JSC5 currently writes from the US. JSC7 writes from behind the Great Firewall of China.

wordpress statistics

Categories and tags

Archives


%d bloggers like this: