Matthew Yglesias » Where’s Corporate America? Part II

Sep 30th, 2008 at 3:53 pm

Where’s Corporate America? Part II

Brian Beutler has, I think, the right answer to my question from this morning — business lobbyists from outside the financial services industry were probably complacent that the bailout was going to pass, and recalcitrant House conservatives were just engaged in a bit of the old cynical posturing. This is why I’m still assuming that the additional votes will be found soon enough — now that it’s clear that complacency was the wrong strategy, I highly doubt that important businesses are going to let a credit crunch devastate their operations while their local member of congress sticks to a “no” vote.

Comments
15

15 Responses to “Where’s Corporate America? Part II”

RWB Says:
September 30th, 2008 at 4:15 pm
Is it clear that complacency was the wrong strategy? The Dow closed at 10,854–not a spectacular bounce-back, but a decent one. (The company I work for, which is listed on the S&P 500, is not financial, and lost 17% (!) yesterday is back up to higher than where it started the day yesterday–whew!) If non-financial stocks seemed to bounce back today, might that signal a wait and see attitude is in the offing? Might various industry lobbies want a breather before committing one way or the other–especially as nothing collapsed today, there were no bank runs today, etc.

I’m not saying this is the right strategy, but since I don’t know what the right strategy is, “wait-and-see” has a lot of appeal!
Bagel Says:
September 30th, 2008 at 4:15 pm
Matt,
Isn’t business (non-financial) facing an enormous collective action problem? Sure, they all want the government to bail out the financial services sector, but why would any individual business (e.g. Walmart, Dow, etc) put resources into lobbying the government for a bailout, if other businesses will benefit from the bailout without expending any resources. Given the economic downturn and the likelihood that they will be facing lean times ahead they all have incentives to free-ride, so we see very little action on their part to help fix the system.

Bagel
Marshall Says:
September 30th, 2008 at 5:55 pm
Nah, the corporate heavy hitters aren’t going to start lobbying for an enormous subsidy to a completely different industry. There’s a code in Washington: you don’t lobby for other people’s favors; neither do you interfere with them. The corporates just see this as a giveaway to whatever industry’s in the spotlight this week. I’m surprised they’re not lobbying against it, frankly; I guess it’s just more evidence the pit is bottomless.

More reason why the bailout has nothing to do with the wider economic interest.
DTM Says:
September 30th, 2008 at 9:35 pm
The problem with Beutler’s theory is that it is based on a factually incorrect premise–big business did lobby for the bill. They just failed anyway. See this link provided by another poster in the prior thread:

http://thehill.com/leading-the-news/crushing-failure-for-lobbyists-2008-09-29.html

This really is the immigration scenario all over again, and it amazes me Matt just can’t seem to accept it.
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Matt Yglesias

Where’s Corporate America? Part II

15 Responses to “Where’s Corporate America? Part II”

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