- For just $3700 a day, you can preserve the livelihood of a troubled CEO.
- Tyler Cowen criticizes Paul Krugman’s weak attack on bailout opponents. Read the comments to that as well.
- Ohio’s governor is looking for a handout. I would say the same thing to state governments that I would say to companies: hard cheese. Ohio’s in fairly dire economic straits for two reasons. First, it is one of the worst states in the union to invest in due to backwards tax rates and regulations. Second, as the article points out, Medicaid is a huge (and still growing) part of the Ohio budget. Ohio was one of the states that used its tobacco money to extend Medicaid services and now that we’re in a downturn, Medicaid payments will actually go _up_ because more individuals will become eligible for Medicaid services. This is unsustainable and a bailout won’t fix the underlying structural problems. Medicaid as it currently exists is not viable, as the incentives are structured for more and more use. For the states, they get 60% back from the federal government, so they have an incentive to over-allocate Medicaid dollars and push their Medicaid clients to use more services. But once the states have trouble covering their 40%, to scale back Medicaid expenditures means a greater than 1:1 drop in allocation for Medicaid-eligible services because that 60% from the feds gets re-allocated and used again for Medicaid services.
- John Hood also has a post up about state bailouts (among other things), linking to a Cato @ Liberty by Michael Cannon. Cannon says part of what I just said up above.
- Speaking of bad policy decisions involving Ohio, the John Locke Foundation gives the Buckeye State an F grade when it comes to taxpayers’ return on investment. 10 states grade out with an A and three more get a B+. Ohio is one of 10 F grades. The one place where Ohio grades out as an average state (as opposed to in the bottom quintile) is road conditions, which made me laugh. Or pity other states’ roads.
- The UAW has already thrown out their small concession that they agreed to in order to get a bailout. Let them fail. We don’t need to subsidize the UAW or incompetent managements.
