It was only yesterday when Walter Williams explained how economic stimulus works. Or doesn't. I encourage you to read it.
This morning on the news, in an ironic 60 second bit on the stimulus package we were given a startling example. Irony is always funny. But when the folks saying the irony don't realize what they've said, it is all the more fun.
The bit starts with how all the infighting is going on with the stimulus package. It tells of the woes of the previous packages. It tells of how we've given an unspecified amount of money to Citibank and how they wanted to buy a $50M dollar business jet. Lots more talk. Treasury Department convinces Citi not to buy the jet. mumble...mumble... Bipartisan...blah blah... bastard Republicans... blah blah... unyielding Democrats... yadda yadda. And then someone (I already forget who) from the Democratic party whines about how we have to pass this package now because the lack of sales have caused layoffs at Starbucks, Microsoft, Boeing, IBM, ... wait... go back. What?
Don't let me suggest that Citibank's purchase of a Falcon (made by Dassault) directly impacts the employees on a 747 line at Boeing. But it absolutely illustrates the point. Normally the tradeoff is more vague... I.e., if the government spends an extra $100 million on a bailout, there is $100 million less spent on dry cleaning or booze. Wait, scratch that. There's probably a constant spent on booze.
But in this case the government has whined about spending on airplanes and the direct visible result is people buying less airplanes. Nice.
Oh, there are so many things wrong with this picture: The Gubment should not have a say here -- but they do -- because they've dumped an unspecified amount of cash into them. Nothing the gubment does should ever be unspecified (except maybe a few national security bits and bobbles.) And what damn business do they have putting cash (specified or otherwise) into a business? A failing business I might add. Why Citibank and not Mom & Pop's Dry cleaners? (And when I say "Mom & Pop's Dry Cleaners," I mean 500,000 different Mom & Pop's Dry Cleaners.) I'll tell you why: because if Mom and Pop run their dry cleaning business badly enough to need a bailout -- they probably should be doing something else. And if they were to sell their business right damn now instead of in 18 months when it really fails, they might actually get half of their money back.
It's a stimulus you paid out, dumbasses. So when the stupid bankers use that money to stimulate the aircraft industry (which is failing and you are going to have to stimulate) you stop them. See -- irony.