Lazear says No to Rent Seekers

Economists define rent seeking as follows:

Rent seeking is the process by which an individual or firm seeks to gain through manipulation of the economic environment rather than through trade and the production of added wealth. Rent seeking generally implies the extraction of uncompensated value from others without taking actions which improve productivity, such as by imposing regulations or other government decisions harming consumers. [from Wikipedia]

Here is an example of rent seeking in action, from a report today by Reuters:

Detroit's Big Three automakers sought incentives from Congress on Thursday to broaden access to alternative fuels -- a step they hope will boost their sagging finances and cut reliance on imported oil.

Republican and Democratic leaders from the House of Representatives and Senate expressed support for helping executives from General Motors Corp., Ford Motor Co. and Chrysler Group with their agenda.

It was repelled by CEA chair Eddie Lazear:

The auto executives will make their pitch to President George W. Bush on June 2. Bush favors some incentives for developing alternative fuels but the White House basically wants the auto industry to fix its own problems....

White House economist Edward Lazear, who is chairman of the White House Council of Economic Advisers, said it was not Bush's job to tell the automakers how to run their companies.

"We're obviously hoping that things will work out so that those companies can get back on their feet and be productive. But I don't see any direct intervention by the president," Lazear told Reuters in an interview.