Okay, so this isn't the first time I've said it, but I'm concerned that Atlas Shrugged is being reenacted on our national stage, and it sometimes bums me out when Rand turns out to be right. (I feel the same way about Orwell, btw). Anyways, let's talk about rent-seeking.
For those of you who don't remember your Atlas Shrugged that well (and it's not like I've read it too recently), much hay is made in the book about having a "man in Washington." Rearden, one of the characters sympathetic to Rand's viewpoints, regards this necessity with alternating apathy and antipathy. The fear, Rand offers us, is that it's all too easy for the success of a company to depend not on the quality of its product, but on the influence of its lobby.
How, now, do we suppose that Bear, AIG sould live, and Lehman Bros should die, and upon what mechanism do we predict that the fate of GM and Chrysler will depend?
Imagine perhaps a car company whose business model actually relies upon the manufacture of cars that people want to buy. How might such a company compete with a GM that is backed by the full faith and credit of the US of A?
Now, look. The market sucks sometimes at allocating resources (tulip bubble?). We know this. That doesn't mean however that the government is any better. Heck, democracy sucks at picking leaders (Dubya?). Churchill reminds us though that suck though it might, democracy's the best we've got.
Just something for us to consider as Congress deliberates on the stimulus package, AKA rent-seeker's dream. With our noses in our newspapers and our eyes on our RSS readers, we'll have a front-row seat as state governments, corporations and federal agencies fight over their share of the trough. Upon whom will the lucre be dropped? Those who would martial resources to the best benefit of society collectively, or those whose "men in Washington" are better connected? I know what I'm betting on.