Microbailouts - the economy as a freeway

November 21st, 2008 · Comments

An analogy I like to use for the economy and bailout(s) is a busy freeway. We’re all out there driving, going our own speeds, choosing our lanes. Sometimes you’re in the fast lane, sometimes the slow.

Traffic is always there. You can hop lanes and try to beat the overall flow, but the speed of others affects your progress.

Accidents happen. A lane or two gets blocked as a result. Cars following in the same lane as the crash are stopped and require a merge. Cars in the other lanes are still moving, but their flow is impacted as the blocked lanes attempt to merge (and rubbernecking at the carnage).

If you’re a driver in the lane of the accident, you’re stuck until you can merge to a lane of moving traffic. Your forward progress requires a merge to an adjacent lane.

The drivers in other lanes are performing microbailouts. They’re letting you in so a portion of the freeway doesn’t stagnate.

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Tags: Economics

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Phi.Sanders 1 month ago 1 point
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When I let someone merge, and I do often, it's a humane thing - I'm thinking about the good that I did for that one person, often overriding how it impacts the people behind me who have to wait.

I am definitely not thinking about the freeway, or the overall traffic flow.

So, while I find your analogy poetic, I don't think it's apt, unless you are advocating for bailing out the economy one person at a time.

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Sol Young 1 month ago 1 point
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That's exactly it though, and perhaps poetic (thanks!)... You're
offering bailouts on a micro scale maybe without realizing the macro
effect. The microbailouts are performed for the greater good as well
as local humanity.

The accident is a large problem affecting the freeway flow (economy).
One's merge is perhaps the same as donating to charity (mild example)
or boosting one's tax bill (maybe a more pertinent example) to allow
the system to function until a resolution is made.

I'm not necessarily advocating a bailout, just as I believe cars
speeding up the shoulder shouldn't be microbailed out (but good
drivers should). I see a similarity between the ways we operate in
traffic and the way we're reacting to the economic crisis... And I
think microbailout is good way to break this big hairy mess in to
manageable chunks.

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