Academic

BILL STUNTZ ON G.M. AND THE RAILROADS: Allegedly friendly governments offer their business patron?

By Glenn Reynolds

BILL STUNTZ ON G.M. AND THE RAILROADS:

Allegedly friendly governments offer their business patrons a killing embrace ? do this or that, and we?ll give you more money or land or trade protection than you could possibly ask. The subsidies are so generous, responsible corporate managers will do pretty much anything to get them. Over time, the corporations acquire more and more skill at pleasing the relevant government officials ? and lose the ability to please their customers. The railroads laid track and built stations in places where the demand for transport could not match the supply; today?s GM is striving to build ?green? cars that consumers may not buy. Insolvency is the inevitable consequence of such business decisions. So it was a century ago with railroads; so it is today with America?s auto companies. Perhaps the banks are next . . .

Uh oh. (Via Bainbridge).

Full post as published by Instapundit.com on June 09, 2009 (boomark / email).