Editor, The New York Times
To the Editor:
Presidential spokeswoman Dana Perino said Dec. 12 that "Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms. However, given the current weakened state of the U.S. economy, we will consider other options if necessary – including use of the TARP program – to prevent a collapse of troubled automakers" ("White House Open to Using Bailout Money to Aid Detroit," Dec. 12, 2008).
In other words, the administration thinks that the market is the best way to allocate resources – to discover their most productive uses and to give producers and consumers unparalleled incentives to pursue those uses – but in times, such as today, when it is especially important to use resources carefully, the administration concludes that resources will be more wisely allocated by politicians and bureaucrats.
What lunatic logic.
Donald J. Boudreaux
Don Boudreaux is the Chairman of the Department of Economics at George Mason University and a Business & Media Institute adviser.