A moment to think about our economy. America is sitting on the front row of the second greatest show on earth: capitalism. If you’ve gotten bored with the main attraction in our economic “crisis” (the apparent collapse and resurrection of our financial institutions), we have the apparent collapse of our auto-making industry.
The Big Three automakers of America apparently need $25 billion from Congress to remain in business, which is $25 billion they did not get. Unlike the billions going to our financial sector, money in the auto industry actually exists so where would this $25 billion have gone?
I am guessing payroll, equipment, shipping costs, research and development and other costs relating to running huge multinational corporations. Why are these costs so large? Because these companies are so large. Why are these companies so large? Why don’t we let a century of lawmakers and CEOs take a crack at that one.
The point is that a company is too big if it cannot finance itself. Instead of asking for billions of dollars, why don’t these companies scale back and sell off their subsidiaries until they have found a sustainable size? You may also ask yourself: how has our auto industry fallen down a $25 billion hole? You should tell yourself: notoriously bad decision-making, including a continued focus on large vehicle production in the obvious face of increasing fuel shortages.
If the Big Three shut down or scale back I expect to see foreign manufacturers moving in on the American market. I’ve got as big a flag pin as the next guy but I don’t think anything better could happen because more foreign-made vehicles mean more compacts and hybrids and less SUVs and pick-ups.
Yes, you liberals out there, that does indeed mean that the free market may be working for us too.
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