Ezra Klein - The U.S. Government: An insurance conglomerate protected by a large, standing army
And GM was an insurance company with an interest in automobiles. A business model that ultimately turned out to be less than sustainable.
If you want to know what the federal government is really doing, just look where it’s spending our money.
Two of every five dollars goes to Social Security, Medicare or Medicaid, all of which provide some form of insurance. A bit more than a buck goes to the military. Then there’s a $1.50 or so for assorted other programs -- education, infrastructure, environmental protection, farm subsidies, etc. Some of that, like unemployment checks and food stamps, is also best understood insurance spending. And then there’s another 40 cents of debt repayment. Calvin Coolidge once said that the business of America is business. Well, the business of the American government is insurance. Literally. If you look at how the federal government spends our money, it’s an insurance conglomerate protected by a large, standing army.
And GM was an insurance company with an interest in automobiles. A business model that ultimately turned out to be less than sustainable.
3 comments:
Gm doesn't have a large standing army, the world's largest economy and the ability to print it's own money which happens to be used as the world's reserve currency.
Other than that I see your point.
Not having a standing army was a benefit to GM, one less sector unrelated to their core insurance function to support. Unlike us, I'll note. After all, it's not an army of low paid doctors who can meet the demand for Medicare services, is it?
As far as printing money goes, do you really think Bernanke can thread the needle simultaneously padding entitlement checks while not driving up the cost of the things those checks are spent on such as food, housing, and energy?
Wait... I thought the money supply had nothing to do with prices?
Isn't money the sole magical commodity that is not accountable to the law of supply and demand? Is it also free from the shackles of marginal utility?
"As far as printing money goes, do you really think Bernanke can thread the needle simultaneously padding entitlement checks while not driving up the cost of the things those checks are spent on such as food, housing, and energy?"
Of course not. No single person or entity can ever have enough information for this to be possible. See Hayek "The Use of Knowledge in Society"
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