The auto bailout bill could have cost the taxpayers as much as $14 billion.
Failing to pass it cost U.S. stockholders about $300 billion.
By preventing consideration of the auto bailout, Senate Republicans seem to have driven world equity markets down by about 3%, with the futures markets suggesting U.S. averages will follow. I don’t have current figures, but an estimate from 2001 puts the total value of equities worldwide at $37 trillion, of which about 40% was in the U.S.
So to save U.S. taxpayers a maximum of $14 billion, the GOP cost holders of U.S. equities something like $300 billion, and equity-holders worldwide something closer to $1 trillion.
Impressive!
Footnote Maybe the big share-price declines suffered by Toyota and Nissan (as a result of the dollar’s fall to under 90 yen) will lead the management of those firms to rethink their strategy of encouraging Congress to let their Detroit rivals go belly-up.
Author: Mark Kleiman
Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out.
Books:
Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken)
When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist
Against Excess: Drug Policy for Results (Basic, 1993)
Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989)
UCLA Homepage
Curriculum Vitae
Contact: Markarkleiman-at-gmail.com
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