In Which I Find I Have Positioned Myself To the Right of Bruce Bartlett

...which is not exactly where I want to be. I've been saying "bah, no auto bailout." But Mr. Free Market proves to have a more subtle mind (link):

I think it would be a terrible mistake to simply write a check to the auto industry without demanding major, major restructuring of its labor contracts. Without that the money will simply go down a rat hole and the automakers will just be back again in a year or two asking for more money.

Obama has a strong hand to play here and I hope he uses his leverage. With bankruptcy as the only alternative to federal aid, he can drive a very hard bargain with the auto workers. If he caves and just writes a blank check, everyone will know he can be rolled and he will pay a heavy political price for it. If Obama shows toughness on this issue, I think it will pay enormous dividends for him down the road.

[Italics mine-Buce]

Mark Perry, who is somewhere to the right of Ivanhoe Bruce Bartlett on this one, points out that the average per hour compensation at the big three is aobut $73; at the US operations of Japan-based companies, about $44 (link). Might be a good benchmark.

Update: And in case you need any reminders of why we should not mourn for Detroit, go here, and H/T Perry again.

Why Not Accept Euros?

Mark Perry raises his eyebrows at the news that they are accepting Euros at liquor stores in the East Village (link).

Okay, granted, he caught my attention, too. But on second thought, why not?

I suspect the correct response depends on your view as to why the retailers are taking Euros. When I was in Turkey in the early 90s, the locals were desperate for dollars, Deutschmarks, Swiss franks, even Italian lira--anything to get themselves out the inflation spiral that governed Turkish currency for so long: better to have the foreign currency than to have to run to the bank.

On the other hand, anything is a worth dollar (or a Euro) at the right price. In this age of free convertability and ready access to the facilities of exchange--and of ready-configured conversion cash registers--it really shouldn't matter: or at any rate it is nothing more than a little teaser to the customer, like the bowl of mints at the hostess podium. In five-star hotels in India, my impression is they'll take any of a half dozen currencies at the market rate, and with little or nothing by way of exchange ripoff in the process.

My guess is that for present purposes, we are Indians and not Turks. But I have to admit, I stopped to read his blog post.

Afterthought: I wasn't there, but I am told that in Slovenia in the early 90s, they got shirty about foreign currency, especially Deutschmarks. "We have our own currency now," they would say. A matter of national pride, I suppose. I assume there are motel operators in West Texas who will insist on the dollar as a matter of national pride, but mine doesn't run that far.

Update: FP falls for the weak-dollar explanation (link). And fn to FP: coins don't crumple.