This automaker giveaway nonsense has to stop. Note that I don’t call it a “bailout” or a “rescue.” These words imply that it will work. It won’t. Oh, it may stop the companies from failing for the next few months. And a constant flow of our cash into their business can keep them limping along indefinitely. But it isn’t going to turn them into successful companies. When has rewarding failure ever resulted in success or self-reliance?
Why failure must be allowed
Failure is part of life. It’s part of capitalism. Without failure, there is no incentive to succeed. The whole idea of a free market — of ideas, cars, or anything else — is that things people embrace and support succeed, and things they reject and avoid fail. It’s about people freely choosing how they want to live their life. What they want to believe. What kind of car they want to drive.
If failure isn’t allowed — if we take money from people who have earned it and give it to failing companies, we are deprecating every company who has succeeded on their own merit, and we dishonor the choices freely made that resulted in their success.
If your company will survive regardless of how well it is run, why bother trying to excel? Excellence requires effort, and it is far easier to live on the taxpayer’s dime. Not that it matters a whole lot — even if your product truly is excellent, you’ll be a price disadvantage against all companies who get taxpayer-funded subsidies.
In a way, it doesn’t matter what you drive (I drive a Toyota, and my wife a Volkswagen), because if the makers of (to put it nicely) objectively shitty cars aren’t allowed to fail, we’ve created an environment where, eventually, everybody will make shitty cars. You might as well buy a piece-of-crap American car now, so at least you’ll be used to operating it while the rest of us fumble to adapt to cars made with the ergonomics and functionality of a cactus.
What the proposed giveaway says about Obama
During Barack Obama’s campaign, the senator called for a “windfall profits tax” against oil companies, which, due to the high price of oil, have seen record profits. He’s reversed himself on this, recently dropping the call for such a tax. And why would he do this? Well, because gasoline prices have dropped, which means oil company revenues have dropped.
Obama has been a leading advocate of the automaker giveaway, saying that he doesn’t think we can “simply let [American automakers] collapse.” Taking his changing position on oil companies and his position on automakers, it would be accurate to describe Obama’s policy towards large corporations as: punish success, reward failure. This isn’t anything new — this is how governments expand their power over the marketplace. Just don’t kid yourself thinking that Obama is anything other than more of the same.
What about all those jobs?
Toyota is opening more American auto plants. They’re probably not the only foreign auto company doing so. Skilled auto workers should apply there. The rest can go find a job that pays them what their labor is actually worth, not their union-inflated wage that is a big part of why these companies are failing.
Obama, of course, feels differently. Obama values employment as a goal in and of itself. Why then not just have the government hire everyone without a job to dig holes for no discernable reason? Don’t joke. Replace “dig holes” with “build cars” and you’ve just described GM’s current business model.
Can our economy handle it?
Yes. We’ve survived worse. But the real answer is that it doesn’t matter. It isn’t the government’s job to prevent market failures. Once you start subsidizing failure, it’s hard to stop. So let’s start stopping now. Someone I know once said “we are the change we have been waiting for.” He’s a charlatan, but he was right. We can do this. It’s time to stop this nonsense and have the courage to live in a free world where failure is tolerated and business success means something other than skill at wooing politicians.