Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Pulling Plug On GM Would Help Both Auto Industry And Michigan
IBD Editorials ^ | November 11, 2008 | John Tamny

Posted on 11/12/2008 5:17:43 AM PST by Kaslin

Ludwig Von Mises once wrote that the entrepreneur who fails to use his capital to the "best possible satisfaction of consumers" is "relegated to a place in which his ineptitude no longer hurts people's well-being."

The latest losses at General Motors reveal yet again that it is the living embodiment of managerial ineptitude, and to ensure that it no longer fails its customers while harming the well-being of Americans more broadly, it's essential to let the firm die.

Many will of course blanch at the presumed loss of jobs that would result from GM's death, but judging by the high level of unemployment in Michigan, it would be more realistic to say that GM's continued existence under weak management has served as a capital repellant such that capital and jobs will continue to flee the state if GM is saved with the money of others.

Worse, business history, from ships to farming to mining, shows that sectors reliant on government help are invariably weakened as opposed to strengthened.

The above is the case because businesses rarely fail due to a lack of money. Instead, poorly run businesses find it hard to raise money in the capital markets. Government money allows the architects of bad decisions to continue making mistakes that cause a company to be capital-deficient to begin with.

(Excerpt) Read more at ibdeditorials.com ...


TOPICS: Business/Economy; Editorial; Government
KEYWORDS:
Navigation: use the links below to view more comments.
first 1-2021-4041-6061-8081-90 next last

1 posted on 11/12/2008 5:17:43 AM PST by Kaslin
[ Post Reply | Private Reply | View Replies]

To: Kaslin

Excellent article.

If there is any good to come out of the British Leyland fiasco, it is that America need not walk the same path. Don’t try to prop up failing industries!


2 posted on 11/12/2008 5:20:26 AM PST by agere_contra (So ... where's the birth certificate?)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin
Cut wages and hours...and ultimately cost of cars. Get rid of the Union...Yeh, like that will happen.

Get rid of all the Teacher Unions, too.

3 posted on 11/12/2008 5:24:44 AM PST by Sacajaweau (I'm planting corn...Have to feed my car...)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

Aint never gonna happen. Unions own the democrapic party.


4 posted on 11/12/2008 5:25:28 AM PST by Sig Sauer P220 (Thanks to the robber barons in D.C. and on Wall St. I've been forced to become a minimalist.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin
On Cavuto someone was explaining Obama promised lots to AAW but they cant use it if Auto Companies restructure under bankruptcy and can throw out all union contracts and maybe even move south. So the lame duck bill is to keep them afloat till Obama takes office. Why republicans would help with this after financial 700B betrayal is beyond me. Bush should tell Obama not its his job to make a deal with house Republicans.
5 posted on 11/12/2008 5:26:16 AM PST by sickoflibs ( Those who don't learn from (real big) mistakes are losers forever)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin

General Motors cannot be saved. Pumping taxpayer money into it will only prolong the inevitable.


6 posted on 11/12/2008 5:28:38 AM PST by NoControllingLegalAuthority
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kaslin
The reason capitalism works can be described in one word. Competition. If the company that can't compete goes down, the competitors pick up the slack. The competitive companies create the new jobs. The consumer buys from the best competitor.
If the socialist government is going to throw taxpayer money at corporations, they should reward the most profitable companies not prop up the losers who can't compete.
7 posted on 11/12/2008 5:32:10 AM PST by shuckmaster (An oak tree is an acorns way of making more acorns.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Sig Sauer P220
"Aint never gonna happen. Unions own the democrapic party. "

Then, get rid of the democrat party.
8 posted on 11/12/2008 5:32:16 AM PST by FrankR (Operation Tightbelt...let's see how the economy runs when Conservatives spend less...)
[ Post Reply | Private Reply | To 4 | View Replies]

To: Sacajaweau

“Get rid of all the teachers unions too.”

Unions will get rid of themselves by the total failure of the companies they work for. Teachers unions suck up taxpayer money so they will continually want taxes raised. At some point there will have to be a tax revolt, but don’t hold your breath on that. Stupid voters in California just passed another 7 billion dollar school bond. There are way too many ignorant voters.


9 posted on 11/12/2008 5:33:41 AM PST by mefistofelerevised
[ Post Reply | Private Reply | To 3 | View Replies]

To: FrankR
Then, get rid of the democrat party.

EXCELLENT! We have a goal. Now, how do we acheive it, when half the people are enslaved to the party through not paying in any taxes in return for their votes?

10 posted on 11/12/2008 5:35:50 AM PST by Travis T. OJustice (Change is not a destination, just as hope is not a strategy.)
[ Post Reply | Private Reply | To 8 | View Replies]

To: Kaslin
The latest losses at General Motors reveal yet again that it is the living embodiment of managerial ineptitude,

Government and the Unions have been doing a lot of that management for GM etc
11 posted on 11/12/2008 5:36:44 AM PST by uncbob
[ Post Reply | Private Reply | To 1 | View Replies]

To: mefistofelerevised
Unions will get rid of themselves by the total failure of the companies they work for.

I beg to differ. The management will always be blamed (In the case of GM, it's partly true), and unions will go on forever. Don't forget, half of the people are below average.

12 posted on 11/12/2008 5:37:17 AM PST by Travis T. OJustice (Change is not a destination, just as hope is not a strategy.)
[ Post Reply | Private Reply | To 9 | View Replies]

To: sickoflibs
Why republicans would help with this after financial 700B betrayal is beyond me”

If Republicans are stupid enough to actually back this so-called bailout for the auto industry, they are gonna get the same thing that happened to McCain when he backed that $700 billion bailout, which is a a big loss in the 2010 elections.
It simply doesn't make any sense to waste even more tax payer money on fundamentally screwed up firms. Let them be allowed to fail. Those crippling union contracts can be dumped, and out of the ashes will rise better stronger US auto companies.
Japanese companies like Toyota and Honda have no problem making great cars in this country and making a nice profit to boot, mostly in the south, out of the clutches of the rancid unions.

13 posted on 11/12/2008 5:37:45 AM PST by SmokingJoe
[ Post Reply | Private Reply | To 5 | View Replies]

To: NoControllingLegalAuthority
Pumping taxpayer money into it will only prolong the inevitable

Would that that were true.

In fact the disasters arising from the unintended consequences of such action would only cause most folks to forget what the original "problem" was.

ML/NJ

14 posted on 11/12/2008 5:38:55 AM PST by ml/nj
[ Post Reply | Private Reply | To 6 | View Replies]

To: Kaslin

If only more articles on economics started out citing Ludwig von Mises, we would be a lot better off. mises.org


15 posted on 11/12/2008 5:39:33 AM PST by all the best
[ Post Reply | Private Reply | To 1 | View Replies]

To: Sacajaweau

“Cut wages and hours...and ultimately cost of cars. Get rid of the Union...Yeh, like that will happen.
Get rid of all the Teacher Unions, too.”

You’re right about the unions, but the article doesn’t mention the fact that GM is suffering for mistakes made decades ago with management now retired or dead or both, not any that present management made.


16 posted on 11/12/2008 5:39:33 AM PST by RoadTest ('this man, after he had offered one sacrifice for sins for ever, sat down on the right hand of God')
[ Post Reply | Private Reply | To 3 | View Replies]

To: Travis T. OJustice
I beg to differ. The management will always be blamed (In the case of GM, it's partly true), and unions will go on forever”

Not a chance.
What “management” do you blame, if GM is no more in business?
The auto unions are doomed. The combination of beter, more efficiently run Japanese car companies, and the collapse of American car companies, will sooner or later finish them off.

17 posted on 11/12/2008 5:40:39 AM PST by SmokingJoe
[ Post Reply | Private Reply | To 12 | View Replies]

To: mefistofelerevised; Sacajaweau

The Teachers Union in California contributed $1,000,000 to the No on Prop 8 campaign. In California, if a child is absent from school for whatever reason, the school doesn’t get ‘paid’ for teaching that child for that day. There was a protest the day before the election to try to hold as many children out of school to make up for this million dollar donation. There have been no stories in the papers about the action. I don’t know if it worked.


18 posted on 11/12/2008 5:40:41 AM PST by originalbuckeye
[ Post Reply | Private Reply | To 9 | View Replies]

To: Kaslin

I have to agree – hanging around in Michigan for these last 10 years, I have seen so much incompetence in the automobile industry – I firmly believe they all should go under. I said 10 years ago that when Detroit makes a sub 10K car that holds 4 people and gets greater than 30 miles to the gallon and will last 10 years, they will not be able to keep up with the demand. The problem is they way they are structured; they would lose money on each car sold. So I say – let them go – don’t sink my tax money into a losing proposition.
And don’t get me started on the governor – Granholm is the worst thing I have ever seen in an elected official. She is in it for herself and those constituents who will contribute to her. And “Zero” wants her to be his economic transition coordinator – sounds good – look what she has done to Michigan in the last 6 years………

“Politics is not a bad profession. If you succeed there are many rewards; if you disgrace yourself you can always write a book.”
- Ronald Reagan


19 posted on 11/12/2008 5:42:25 AM PST by Patrsup
[ Post Reply | Private Reply | To 1 | View Replies]

To: Springman; sergeantdave; cyclotic; netmilsmom; RatsDawg; PGalt; FreedomHammer; queenkathy; ...
Photo Sharing and Video Hosting at Photobucket

If you would like to be added or dropped from the Michigan ping list, please freepmail me.

Bailout ping for 11/12/08. I'm getting used to Mozilla after years of Internet Explorer, so don't be surprised if you notice some shenanigans.

20 posted on 11/12/2008 5:42:56 AM PST by grellis (I am Jill's overwhelming sense of disgust.)
[ Post Reply | Private Reply | To 1 | View Replies]


Navigation: use the links below to view more comments.
first 1-2021-4041-6061-8081-90 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson