We live in a capitalist society. This means that businesses are born, businesses die based on the market. Successful businesses are able to foresee hurdles and barriers in the marketplace and navigate around them in order to survive in ever-changing times. Those businesses that are unable to do that die or are bought up. It's a kind of Darwinian model.
So I have a little angst around the Big 3 car companies asking the government for help. These car companies did not successfully foresee the hurdles and barriers in the marketplace - or they did, but failed to change their course to navigate them. Now they are hurting in a big way and expect that the government will bail them out. I'm sorry, but that's not how our economy is supposed to work.
Three years ago, I was lamenting to my father (a big supporter of American cars, who will never, EVER buy a foreign car) how the American car companies didn't have any hybrid cars. That honor belonged to Toyota and Honda at the time. Even as the Prius sold out and was back-ordered, the Big 3 continued on their same track - building the big trucks and SUVs because they were still hot sellers at the time. If the car companies did a better job of making smaller, more gas efficient cars a priority, perhaps they could have by-passed some of this mess.
Now, I know that there could be huge repercussions if these car manufacturers go under. Loss of jobs, loss of health care, implications for the supply chain. But our demand for cars, overall, is unlikely to change. Which means the foreign car companies will get bigger and absorb those workers and give business to the supply chain. In the long-run, we would be a a stronger economy.
But no one wants to hurt in the short-run. Maybe that's our problem, though. Maybe the generations, starting with the Baby Boomers, never sacrificed, never suffered. That could be one reason the Iraq war was such a disaster - in WWII, everyone hurt together. Americans had to ration supplies and volunteered for the war effort. But today, we don't even know a war is going on unless we turn on the TV. We don't have to curb our consumption or volunteer for anything. In short, we're spoiled. Maybe if we stick to our guns now, stick to what our economy is supposed to be it will be very painful for a few years. But we'll suffer through as Americans and in the long-run we'll have better run businesses and maybe more efficient cars.
Of course, that means higher taxes in the short run, as we support the millions of people who will be unemployed and without health care. But if we give the Big 3 the bailout, then we'll just have more of the same. We'll be rewarding businesses that did not successfully navigate the market. That's no way to foster new ideas, business savvy and capitalism.
2 comments:
The democratic caucus awarded the committee chairmanship to someone who thinks fuel efficiency is a good thing, finally. Small progress but at least it's in the right direction.
How did the Big 3 miss this boat? I understand that SUVs and trucks are (were) cash cows for these companies, but surely they could have seen the tide slowly turning. Of course, I'm not inside the company, so I don't have a perspective that they may have, but it just seemed so obvious to us consumers. Four years ago, the Prius was on backorder. Were the Big 3 hoping that it was just a fluke?
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