So this is how we now define compassion....no longer any failure!So the auto companies may not have made really wise decisions in the past in their spending or product selection or in dealing with the UAW? No problem, let's give them tens of billions of dollars and we'll make sure that none of them fail.
Had this been the philosophy of government the past 100 years, we would still be propping up companies that made typewriters, buggy whips and rotary telephones. Capitalism, by design, is going to create winners and losers. Without business and product graveyards, we don't get the opportunity to see new businesses open, new industries created and healthy financial cycles started.
When companies are left alone and they either have to adapt or fail, their adaptation and success brings innovation....products and services done better, or cheaper, or more efficient. However, when the government props up the companies (and individuals) that have manged poorly, there is no opportunity for consolidation or the "fire sales" that allow the winners to pick up the assets of the loser at "10 cents on the dollar".
Look at the auto industry just for a moment. It would be good (not bad) if one or two of the world's automakers would fail, go out of business, liquidate and shut down. The remaining auto makers already have the capacity to produce all the vehicles that the market demands. We need a fire sale in the auto industry so that the winners can pick up the assets and market share of the losers and get back to competing with each other rather than coming together and agreeing to government conditions (as if the government ever has been able to run anything profitably)
I'll go one step further. If you allow GM or Chrysler to go out of business, not ONE long-term job is lost any more than these jobs can be saved by throwing money at the problem. Jobs are only created when the market demands that a product or service is desired. Today, many are forecasting that U.S. vehicles sales will drop this year to the 10 million range, down from a very anemic 13.2 million vehicles last year and 16.1 million in 2007. All of the automobile manufacturers will have serious problems if only 10 million vehicles are sold with capacity to build 17 to 18 million vehicles. The only way to get the industry healthy is to cut capacity dramatically and allow those that know best how to manage these cycles be the ones that succeed.
Take a GM or a Chrysler out of the picture and it's like pulling your hand out of a bucket of water. The water fills in where your hand was faster than you can say "oh mama!"
If no one fails, we all lose.
