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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 ...
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!
Get rid of all the Teacher Unions, too.
Aint never gonna happen. Unions own the democrapic party.
General Motors cannot be saved. Pumping taxpayer money into it will only prolong the inevitable.
“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.
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?
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.
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.
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
If only more articles on economics started out citing Ludwig von Mises, we would be a lot better off. mises.org
“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.
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.
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.
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
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.
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