More Bailouts? Message to the Big 3 and a Modest Proposal
Hey Big 3...Maybe you should have managed yourselves better over the past 25 years or so! The writing has been on the wall for years, again that's years, that gas prices were going to go up and people would be looking for more fuel efficient options, you have known for some time that if you couldn't control your costs and take on the UAW that foreign car makers were going to out produce you. Nope you were all too happy to continue to keep pumping out big SUV's and Trucks and taking in all that cash. So, what happened to all that cash? Why didn't you use some of it to retool your plants to build more efficient operations and fuel efficient cars? Nope, instead you just lived in the now and were content getting fat and happy off of the SUV and truck sales and now that you have gotten yourself in trouble you want big daddy government to bail you out too.I tell you what, since the bail out is the tax money of the American people, why don't we let them decided on whether you should be bailed out? Here is my "crazy" idea. Simply put, if the American people think you need to be bailed out then we will just go out and buy your product. Let's face, no one is buying your out-of-date products, and now you are hurting because if someone is going to buy a car in this environment then they are going to go with the most cost effective option, which usually isn't one from the Big 3. This kind of thing just bugs the crap out of me because companies like GM are basically putting the government on the hook for their short-sightedness. So now the government finds themselves in a situation where they either let companies like these burn and take the consequences of their poor management or they hand them money so the ripple effect doesn't impact companies that are suppliers to this industry who didn't do anything wrong but now will be impacted by this debacle. Some will say, let the free market sort it out, but unfortunately its not that simple anymore, too many companies that rely on these bigger dinosaurs for business will be impacted. Part of me wonders how bad it would be if we just let companies like this go under? Yes, it would definitely cause some pain on the economy and a lot of good people would lose their jobs, but American companies have been staring at this problem for years. We have a lot of inflexible, bureaucratically bloated companies out there that just aren't flexible enough to retool for change. Is that the model that we want for companies that are helping drive our economy? Maybe we need some of these big dinosaurs to go extinct so more nimble and better managed companies can step up and take a leadership role and rebuild our economy to be more efficient and lean and mean again? Honestly, I think this would be a better strategic option than just sticking a band aide on a gunshot wound which is what we are doing with these bailouts now. It may help in the short run, but at the end of the day we will still have the same problems in play and I seriously doubt we will learn our lesson unless we see the consequences of letting companies like these survive. If we let our economy regrow with newer more flexible companies then new jobs would be produced and our economy would be resistant to the problems we see today.
posted by Heath @ 10:12 AM
2 Comments:
yeah i'd say let 'em go down if there was something out there for all those workers (and supplier comanies' workers) to fall back on, but there really isn't. i agree with your sentiment though. they should have done something about this long before it got to this point, and now it's a huge mess and they're hemorrhaging money - and the our ecomony is just overly dependent upon their survival... lose-lose.
Yep this is where being a moderate comes in handy. There needs to be a solution where there is some oversight by the government but not so much interference that weaker, poorly run companies are allowed to survive. With the extreme sides of the argument controling things you have the extreme conservatives saying no government regulation and let the market run free and sort itself out. Nice in theory, but rarely do theories work out perfectly. This argument doesn't take into account the greedy minority that have too much sway in our economy. On the other side of the spectrum you have the extreme liberal view of bailouts and over regulation, which leads to dependence on a central entity and puts our economy in a position where it relies too much on companies with shakey foundations. We need more moderates running this country to help strike a happy medium.
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