Over the past couple of months, my economic opinions have changed. For some time, I believed that the bailout of the banks was necessary because if we didn’t, the economy would crumble. When the automotive industry came to Washington and said that they needed money to survive, I believed that it was a necessity to give it to them because the number of jobs lost would be catastrophic to the economy.
The issue with this mentality was that we were deceived. I was deceived into believing that the only way for our Capitalistic economy to survive was for the government to come in and save a failed business. It was “for the greater good of the economy and country.”
I began to look into the amount of money that we were giving these companies. America provided the first injection in December at the amount of $15 billion. G.M. and Chrysler both said that this money was going to really help them to get their act straight and work on trying to become a successful company once again.
Like every drug user, though, once they’ve had their first injection, they need it time and time again.
Why is it that the United States feels the need to bail out a company that has failed? For a long time, General Motors and Chrysler were profiting ridiculous amounts on these gas guzzling trucks and SUVs. When the economy crashed, suddenly they were looking for a way to stay alive long enough so that one day, they could profit again. Enter the bail outs.
We are a free market nation where it is the desires of the people that determine which products survive and which fail. When the DVD player came out, we stopped buying VHS and we started buying DVD because it was better. Did the VHS companies cry out in horror and beg the government for a bail out?
Since when does the government bailout any company that has failed? Why, in this day and age, do bankers and automotive CEOs alike believe that it is the tax payer’s job to save their hinds because of their greed?
I propose a very simple solution to this problem.
Let G.M. and Chrysler collapse. Let them crumble and burn. I am a patriot and I love the American brand, but there is a third company in Detroit that has survived without the tax payer help. If you want to be a patriot and you want to “help the economy,” rather than do it by giving a ton of tax payer dollars to these failing companies, I say buy a car from Ford.
The economy is not going to absolutely crumble tomorrow if G.M. and Chrysler collapse. What will happen is the free market will correct all the issues. Someone will come along and buy up the certain models of car these companies make that they like best and feel will sell. However, if we do give more money to G.M. and Chrysler, all we will do is one thing:
Show the world that America promotes failure. Is that really us?
About Jacob Cohen Donnelly
We do and will promote failure. We are a country of failure. From failed humans who get shuffled along in school to failed corporations.
Awfully pessimistic. Just because that has been the mindset in the past, does that honestly mean that we need to continue along that route? I would rather see us make the necessary changes so that we promote good, new ideas rather than see us give money to failing companies.
http://www.wethepeoplepolitics.com/guilty-by-reason-of-insanity-or-stupidity/
I’m with Jakuul on this one. As with our failing education system, tax structure, power structure, etc., the failing economy is yet another sign of the times. While sure, we can do our best to change the modus operandi of the governing class, the ultimate issue is the time commitment – time that we, as citizens, simply do not have.
A few things about this article – when the auto companies accepted their first handout, they were fully aware that it wouldn’t be enough for long term stabilization; they just simply would not have had enough cash to survive until now. Basically, GM was like ‘Thanks Gov, we should be good till like….March.’ As short sighted as it might sound, everyone knew going into this that these companies were in for a very long battle.
The problem with articles such as these is that they personify entire corporations, industries, and even economic systems by the few bad people that spoiled them for the bunch. Huge corporations like Chrysler, GM, and Ford are full of honest, innovative people that deserve to be left standing when the dust settles and ought not be punished for the greed and mistakes of those who caused these messes. Collapse would bury both.
I agree that we should not promote failure. Considering we invented the damn thing, the US auto industry can’t be called anything BUT a failure right now. The solution lies in keeping these companies afloat long enough to shed the short-sighted, SUV-promoting thinking that has prevailed at these companies in favor of the forward-thinking talent which will help the US lead the way to more fuel efficient vehicles.
By the way guys – the site looks awesome
Thanks for your comment, Mike. I appreciate the compliment about how the site looks. We’re trying!
Here’s why I don’t agree with you. We gave them billions of dollars then so that they could get us a plan together showing us what they were going to do to stay strong. The mentality that we just need to get rid of the SUV-promoting thinking is a good idea, but application of it is tough. These companies are STILL advertising on TV about their huge trucks and their huge SUVs. I still see three times the number of SUV commercials as I do car commercials. Their mindset is still the same.
I agree, there are a lot of hard working people who work in G.M. and Chrysler who are not to blame for this at all. There are also a lot of people in a lot of other occupations that lose their jobs and the government doesn’t come along and fix them.
I’m not saying that these companies should just disappear. What I am saying is that instead of asking for a bailout, quite frankly, I think we should let them go bankrupt and try to restructure, or instead, sell themselves off to other investors and wait another five years before the next big car behemoth pops up.
Providing capital to US Banks was inparitive to National Security, this is a documented fact.
Providing capital to the auto industy is for trying to moderate an economic impact b/w recession and depression.
After all this bailing is said and done, we will no longer be a capitalist economy, this is a fact.
The purpose of Government was to protect the greater good of the citizens it serves. The hard but greater good would have been to let the auto industry collapes, raising unemployment until new capitalists were given government grants to develop better transportation ideas, initiating advancements in technology and education.
The fundimentals of business have been tried, tested, broken and now bandaged. I cannot support failure in my personal life but I have little choices with my tax donations.
I can see where providing money to US banks was necessary. However, to say that it was for national security is a little presumptuous. While it is nice to know that these car companies may survive, I think that if they had been allowed to collapse, someone else would have come along and restructured themselves without us.