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 ...
Where were these guys when Wall Street was being bailed out?
Screw the unions!
So what?
I am loyal, patriotic, that doesn't mean that if I am running an incompetently run outfit, and the business is about to crash, the government should be pumping tax payer dollars into it.
This is America, not the Soviet Union. Even the Russians and Chinese started following market based economic policies, and look how China has thrived since they allowed the markets and efficiency to dictate a lot of the investment and use of capital.
GM is like a huge cargo ship. Once it’s going in one direction it takes a long time to change direction. A large part of this is due to the unions. By the time they get done arguing with the crew about the direction of the ship it will be too late...they’ll have crashed.
Are you really that clueless?
Its not just “conservatives” who buy the best products at the lowest prices at WalMart. You will find out that, most of those low income folks that voted for the RATS, actually shop at WalMart. You see, they may vote stupidly Democrat, but they are not gonna go and buy an item from one shop, when exactly the same item can be bought more cheaply at WalMart. Its called good old American common sense. One reason why inflation has been so low over the past 10 years is because of the very low prices we get at WalMart, which in turn sources a lot of their products from China.
You can't stop progress. The unions can blame themselves for driving costs up with their insane demands, and driving a lot of our manufacturers out of this country.
You call it clueless, to think that it was a mistake for America — once the world’s leading manufacturing nation, the so called “arsenal of Democracy”, has voluntarily shipped that great manufacturing base, that force for good.
To a communist nation?
The DNC will get their cut too for arranging the deal, maybe 10% would be fair.
Okay, but if you had money to invest in manufacturing, would you invest somewhere like china that does not have the UAW or would you invest in the USA where you might have to hire the UAW, Teamsters, United Steel workers, etc.
You do the math.
That math seems like one thing:
“Sell out”.
“You can’t stop progress”
Well please explain to us clueless folk where the progress is? Ricardo never meant “free trade” to destroy a nations jobs. The marginal cost of labor between trading partners was of paramount importance in determing the price of goods between nations. That is unless one nation voluntarilly gave up their higher stand of living. Noone can argue that we have made “progress” in doing that!
Bailing G.M. out is not even the best thing for G.M. The American taxpayer will just be subsidizing more inefficiency. G.M. needs to declare Chapter 11 Bankruptcy, put in a tough management team and eradicate itself from the UAW and it unbelievable legacy costs. It needs to drop its Saturn, Pontiac and Buick lines ASAP. It needs to start acting like a company with 20% market share and not a like a company that has a 50% market share.
Hatred has nothing to do with it. It's a simple question of economics.
Unions guarantee that labor costs will be higher than they should be. It's just a basic fact. With operations the size of GM, the cost of that over-priced labor is staggering.
Union labor is like barnacles on a ship. Each individual won't cause a noticeable difference, but the cumulative effect is devastating.
Unions are anti-liberty.
Bailing out GM or any business is bad government. That said, I recall a friend who was out of work a few years ago and could not find employment because his industry was failing. I asked him how he liked his two Jap cars. He was silent.
So, it's not the massively inflated production costs that unions demand? The biggest reason to go overseas is labor costs, costs not driven by the unions, but you say there is an irrational fear of unions? Talk about speaking from boths sides of your mouth. What an insanely silly post! Geez.
Unions are anti-American.
Only if you are referring to anti-American union workers and the union management.
This is how it works.
It's not entirely within the control of US companies decide to shift manufacturing to China or not. Firms from other countries, like Japan and even Europe were already shifting production to low cost China and undercutting our guys. Nokia for example, produces most of its phones in China at super efficient factories. So lets say Motorola refuses to make their phones in China too, and instead sticks to producing phones in unionized, high cost factories in America. What will be the eventual result? Why Motorola would go out of business.
America is not an island, separated from world trade. If competitors of US firms are producing in the lowest cost, most efficient locations, US firms have little alternative but to do the same thing if they want to stay in business.
The moribund unions just don't get it.
Nope.
The math is one thing: Surviving as a business, and not being forced out of business by insane demands by unions.
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