Lord Mandelson is drawing up plans to choose which businesses and industries are important enough to be saved in the event of their going bankrupt as the recession bites, the Guardian can reveal.
In his first newspaper interview since returning to the cabinet, the business secretary said he planned a more interventionist policy for industry.
Company data such as the number of employees, the importance of the firm’s research and development and its performance were likely to be factors in deciding which businesses should be given government aid.
It’s the sort of thing that Herbert Morrison, his grandfather, loved doing. Didn’t that work well too?
8 responses so far ↓
1 AntiCitizenOne // Nov 29, 2008 at 12:11 pm
Well it looks like they are trying to create a depression.
2 Kit // Nov 29, 2008 at 12:23 pm
Next week they will announce price controls and higher tariffs on imports, and then we will have a depression. It’s like they are following a script – “Great Depression II”.
3 john b // Nov 29, 2008 at 12:48 pm
Perplexed as to how selective government bail-outs for bankrupt firms would create a depression?
(yes, obviously price controls and import tariffs would be a good way to do so, but nobody’s suggesting them surely?)
4 Kit // Nov 29, 2008 at 1:58 pm
The selective bailouts is exactly how Hoover and FDR kicked started the depression. It does not take too much imagination what happens to companies not selected or what will motivate those selected.
5 Matthew // Nov 29, 2008 at 2:13 pm
I think you could file that along with ‘windmills cause wind’.
6 Dr Nick Ashley // Nov 29, 2008 at 5:09 pm
I wonder how many corporations will now start donating to the Labour party? Just a silly thought, really.
7 Ed // Nov 29, 2008 at 9:22 pm
Company data such as the number of employees, the importance of the firm’s research and development and its performance were likely to be factors in deciding which businesses should be given government aid.
Companies that perform well, by definition, will not need help. Thus the government will be bailing out losers with large workforces[1]. If Labour has to mess up the economy even further, can they not find some new way to do it?
[1] It will be interesting to see the correlation between those who receive “help” and union membership among their workforces.
8 gene berman // Dec 1, 2008 at 7:02 pm
john b:
Yes—nobody’s suggesting them now. They’relaying low and keeping mum until the bailouts have had a chance to be a done deal.
But let me pose a question to you.
Suppose that a bailed-out entity or industry, after operating for a time, begins to falter once more? Adding some juice at a later time could be viewed as protection of an investment or “throwing good money after bad.”
On the other hand, the needy might explain that they really don’t need a direct infusion–just some assistance in fending off the competition, especially from the domestic installations of foreign competitors. Union organizers don’t even have to win their campaigns to cause the competitors a lot of headaches and expense; and, in these endeavors, it’s par for the course for there to be (impartial, of course) gov’t. people poking around (folks from the Dept. of Labor, OSHA, EPA, Dept. of Justice, etc.). After all, aren’t the subsidy-recipients “our guys?” Don’t the taxpayers have an important “stake” in such matters?
Toyota manufactures the “Tundra,”–a full-sized pickup that’s been a good seller for a few years and also happens to be the most “American” truck on our market (over 80% U.S.-made vs.
less than 70% for the American brands). And, to complicate matters a bit, last I heard both Toyota and GM owned significant pieces of each other. How does that sort of thing figure into the thinking about such matters? Or about the results of later actions?
Is it not likely that other industries will want a bit of help. Ethanol’s already a mandated additive to automobile fuels in varying proportions (state-to-state), resulting in high corn prices to growers and tariff protection against imported ethanol to protect those high prices. They’ve already proven their need for “assistance,”—mightn’t they need a wee bit more?
The real question is: “where does it end?”
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