Mike Munger of Duke University talks with EconTalk host Russ Roberts about the often-vilified middleman–someone who buys cheap, sells dear and does nothing to improve the product. Munger explains the economic function of arbitrage using a classic article about how prices emerged in a POW camp during World War II.

The audio clip is located here

The videos are located on youtube starting with part 1 at http://www.youtube.com/watch?v=Phs6CwnutoY

Stossel suggests that government isn’t the answer to all of our problems.  Perhaps these two candidates do not wield the power to do all the things they have promised.

Kurt Bouwhuis, Mackinac Center Intern

It depends.  John Stossel is launching his Politically Incorrect Guide to Politics where he offers, perhaps, a different perspective.  It is showing tonight at 10p.m. on ABC.

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Higgs on the Bailout

Don Boudreaux

Here’s Bob Higgs on the bailout ‘plan.’  I especially like this paragraph:

Sure enough, in the days after the bill’s initial defeat, its managers took the monstrosity that had failed on Monday and made it even uglier. Their purpose, of course, was to buy off the bill’s opponents in Congress by sweetening it with all sorts of more or less unrelated provisions intended to channel benefits to the opponents’ constituents and supporters. In short, in Washington last week, business went on as usual: Congress is the name; corruption is the game.

Yes.  Thank goodness we Americans have mature, responsible, wise, and courageous ‘leaders’in government to regulate markets.

Children can be excused for believing in Santa Claus; they are, after all, children.  Adults cannot be excused for believing in the beneficence and wisdom of the state.  This institution’s foolishness and predations are visible for all who care to see.  I can respect at least the intelligence of those who defend the state as their means of extracting wealth from others — that is, for example, I can respect the intelligence of U.S. auto executives who defend the state as their means of extracting the $25 billion recently ponied up by Uncle Sam to help G.M., Ford, and Chrysler.  I can respect their intelligence even as I loathe their ethics.

But I cannot respect the intelligence of adults who continue to insist that empowering strangers sitting beneath a marble dome to take and spend other people’s money is wise and sensible.  And my respect for such alleged ‘intelligence’dissolves even further when I reflect upon the fact that those persons who insist on trusting the state (because its top officials are elected democratically) see — or should see — the disgraceful behavior that these officials each engage in to win their gaudy glory.

Kurt Bouwhuis, Mackinac Center Intern

I found a link to the article located below off of the CNN website.  Jim Clark’s quote disturbs me.  If the economy were run solely by him, it sounds to me as though he would keep the plant open.  Why would he keep it open?  Just for the sake of jobs?  The economic “problem” here has to do with what this plant is producing.  The plant is producing trucks, which has been demanded less due to the recent increases in gas prices.  Does this mean that Jim believes that GM should continue to produce trucks that nobody wants?  Does Jim believe we should steal money from taxpayers to subsidize the industry?  Jobs are created because a business produces a good/service that consumers desire.  If a business/plant fails to do so, you cannot continue to employ people just for the sake of employment.  If you employ a model like this, there would stockpiles of goods everywhere with no willing buyers to put the goods to use.

A perfect example of this could be illustrated by examining that market for horse buggies.  Before the automobile, the horse buggy market was flourishing becasue that was exactly what consumers demanded.  When Henry Ford introduced the automobile, I bet horse buggy employees lost their jobs at the horse buggy factory.  Is this a bad thing?  Absolutley not!  The resources of production simply shifted from what was demanded to what is demanded.  I would bet that the communities that developed around these horse buggy factories began to diminsh.  It is sad to see a town deteriorating, but in order for it to prosper again, it must produce a good/service that the consumers demand.  We should not save the town and jobs by continuing to employ people at the horse buggy factories and stockpile the products.

MORAINE, Ohio — Workers at the General Motors plant in Moraine were given a letter Friday saying the plant is closing in December.

According to the letter, the last day of production will be Dec. 23, 2008. In June, the automaker said that the Moraine plant would close by 2010 or earlier. The plant currently employs 1100 workers.

GM spokesman Chris Lee said plant managers shut the line down at 2:30 p.m. Friday to gather the workers together and give them the letter.Originally, General Motors had planned several shutdown weeks in December. However, Lee said now there will be no temporary shutdowns and the plant will operate until December 23.

IUE-CWA President Jim Clark said, “IUE-CWA is deeply disappointed in General Motor’s refusal to keep the Moraine Assembly plant open. The announcement that the plant will be closed much earlier than initially stated will further hurt our members, their families and a Dayton community already rocked by plant closings and layoffs.”