Kiwi Polemicist

December 22, 2008

Jaguar asks UK government for a bailout

The BBC is reporting that Jaguar – owned by the huge Tata Group from India – has asked the United Kingdom government for a £667m (NZ$1.645b) loan and the government is only saying that they will be a lender of last resort, i.e. they’re not ruling out the possibility of a loan. If a loan was given it’d basically be done to preserve jobs.

Think about it: we’ve got a recession and people are sensibly buying fewer luxury cars. Rather than accepting the facts of life and laying off staff, Jaguar/Tata is expecting the taxpayers keep those workers in a job. This is no better than the make-work schemes of the 1930’s, i.e. it’s welfare by another name. It’s also good for politicians because it keeps the unemployment figures down, just as the massive surplus of staff in the railways, post office, etc. used to do in New Zealand. The loans will go towards producing goods that no one wants, so this is a massive waste of economic resources.

Consider two things that show how nonsensical government loans to failing businesses are:

1) when car manufacturers get loans those loans are funded by taxpayers, including the people who work for the car manufacturers. So, the staff are paying to keep their jobs. “Mildred, I’m off to work now so I can pay taxes and keep my job”. It’s a whole new angle on “I owe, I owe, off to work I go”.

2) all taxpayers are effectively subsiding – paying for – cars for rich people. So the local cleaning lady is paying for a part of the Jaguar that her boss drives. Is this what the Socialists/Marxists call “fairness”?*

It’s your decision: if you were the government person making the decision, how would you respond to Jaguar’s request for a loan?

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* government bailouts of businesses are a Social/Marxist practice. The example of the cleaning lady shows that Socialism/Marxism isn’t about fairness for the workers, rather it is about wealth and power for the rulers. That’s why left wing movements start with the intellectual elite rather than with Joe Bloggs on the street.

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2 Comments »

  1. It’s Bastiat’s “what is seen and what is not seen”.

    What is seen is the people who will lose their jobs if Jaguar goes under. What is not seen is the people who will get jobs if the bailout money is not given to Jaguar and is instead used for something else instead.

    The first group will support the bailout, but the second group won’t oppose it because they don’t know they’re losing anything.

    Comment by Nigel Kearney — December 23, 2008 @ 7:22 am

    • Nigel: you have described very well the problem with Socialism/Marxism, i.e. they try to right one “wrong” and in doing so create another.

      Comment by kiwipolemicist — December 23, 2008 @ 8:29 am


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