#8 Jim
My point of view is that the US auto industry is in permanent decline at this point. Long term, there’s no reason to pay American workers high wages to build cars when Mexican/Chinese/Brazilian workers will do it for 1/5 as much. So basically, it sucks to be me and everyone else in Michigan. The choice at the moment is whether to let the auto industry crash and burn or deflate slowly. I would argue that more economic damage would be done by the former than the latter. As long as we’re boosting aggregate demand with deficit spending (and most economists agree that it’s a good idea during a severe recession) I don’t mind seeing it benefit the automotive industry.
As far as the grocery business we’ve been propping it up with agricultural subsidies since the 1930s. These subsidies are basically just transfer payments from taxpayers to farmers which has the effect of lowering the prices you pay at the grocery store. Republicans won’t get rid of them because farm states are generally red states. Democrats won’t get rid of them because the overall effect is progressive, in that poor people don’t really eat less than rich people but do pay fewer taxes. Whether or not it’s a good idea is up to you.
