Battlepanda: I thought Libertarians are supposed to be pro-market?


Always trying to figure things out with the minimum of bullshit and the maximum of belligerence.

Friday, May 13, 2005

I thought Libertarians are supposed to be pro-market?

Jane Galt has taken up the gauntlet on the libertarian side. Unfortunately, she is more interested in defending the recent decision to let United offload its liabilities to PBGC, on the grounds that economic disruption is bad. What the!
I'm not sure that Angelica quite understands bankruptcy law and the Pension Benefit Guarantee Corporation. [ed -- meorrr!] The PBGC, while it is grossly underfunded, isn't exactly "corporate welfare"; it's a government-chartered pension insurer, which forces pension plans to pay it premiums (the worse shape their pension/company is in, the higher the premium), and in return regulates the hell out of the pension plans.

If taxpayers end up having to pick up the tab (which it ultimately will because the PBGC is not self-sustainable) for United's obligations, it's corporate welfare.
I'm not really sure what Battlepanda's objection is. UAL is insolvent--can't meet its debt payments or its pension obligations. Does she think that bankruptcy law should force liquidation? Hard luck for the workers, suppliers, and so forth, no? It's pretty generally recognized that Chapter 11 bankruptcy is one of the great strengths of the American economy, allowing companies in hard times to restructure rather than expire, salvaging something for workers, creditors, and the company.

Yes indeed, there will be short-term pain. But surely a libertarian like Jane must understand that we cannot have a free market without letting unprofitable companies go out of business. Sure, there are arguments for bailing them out in a bona fide unexpected crisis, but United's problems are long-standing and irreversable. Keeping it on life support when the airlines industry is overcrowded already is not just anti-market, it's anti-common sense.
I'm also interested in Jane's favorable take of chapter 11 bankruptcy for firms on the grounds that it makes the American economy more resilient. Is she willing to extend the same curtesy to American families?
Or is she arguing against the PBGC? But should we really just abandon people who made the mistake of depending on their pensions? Tell a 58-year-old stewardess to suck it up and go to phlebotomy school?

Where did I say anything about throwing the retirees to the wolves? No, I say liquidate United to pay down the tab before we start using the taxpayer dollars.

I don't understand this discussion. Why is she the libertarian and I have to be the one arguing for letting the market do its thing?