Holiday Reading

I’m heading home for Thanksgiving, but in the meantime, here are some essential reads:

In the 1994 elections, Republicans ended 40 years of Democratic control of the House of Representatives. So in 1995, a vice president of Fannie Mae wrote a letter to Ed Crane, president of the Cato Institute, saying that Fannie Mae intended to give that libertarian, free-market think tank a $100,000 grant

“Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10-to 15-year economic slump,” said Ohanian, vice chair of UCLA’s Department of Economics.  “We found that a relapse isn’t likely unless lawmakers gum up a recovery with ill-conceived stimulus policies.”

In an article in the August 2004 issue of the Journal of Political Economy, Ohanian and Cole blame specific anti-competition and pro-labor measures that Roosevelt promoted and signed into law June 16, 1933.

Recession is like nature’s wildfire: It cleans out the deadwood from the economy. The Big Three will survive only as auto companies, not employee benefit organizations propped up with taxpayer money.

After a successful reorganization—not a bailout—the Big Three (or two, by that point) will be able to escape the past and emerge as competitive companies. Chapter 11 might be the last shot for the Big Three to credibly claim it is a new day in Detroit and to win back the faith of the consumer.