02-17-2012, 10:53 PM
Trouble wrote:
Begging your pardon, but anyone who thinks a company that size that would be liquidated and sold at auction is an idiot.
This kind of talk really puts me off. I pointed out The Economist as a source for the opinion that it would happen. The link I provided was from an article where they apologize for having taken a position that the bailout was a mistake because they became convinced that the evidence implied otherwise.
I had expected that you would find economists that agreed with your assessment. Instead you provided a law professor's opinion. Now being a law professor doesn't mean his opinion on economics is wrong, but since it isn't his area of expertise, there isn't any reason to find his opinion credible unless he makes a convincing economic argument that liquidation would not have happened along with expressing his opinion that no such liquidation would have happened. There was no such argument (economic argument for the proposition that liquidation would not have happened) in the essay you linked to.
Here's what I thought might transpire if you had provided an informed opinion from trained economists: I would provide you with opinions from other trained economists that think that liquidation was indeed likely - e.g., Mark Zandi, the lead economist at Moody's, Brad De Long and Paul Krugman. I wouldn't expect you to accept anything from Krugman even though he is a Nobel Prize winning economist, but people like Zandi and the economists from The Economist, would, I think, deserve more of your consideration than a simple derisive brushing away as being idiots.
So, if you had provided views from economists to back up your claim that there was no way GM would have been liquidated and I had provided economists to back up the claim that it was likely, what I would have thought was justifiable was to say that the issue was, at a minimum, an open question.
And then I would have suggested that if it were at least an open question amongst economists, then there was justification for going ahead to bail out GM because the consequences of not doing so would be too great if the economists that didn't think liquidation would happen were wrong and those who did think would happen were right.