I don't see how bailing out the Auto Industry (or any industry for that matter) is going to solve anything. This is telling those companies that they are too important to the country to be allowed to fail. What do you think that is going to do to their business model? Make them more innovative, increase productivity, lower costs, etc.? I seriously doubt it. Why would they put forth the effort, they've been told they are too important to be allowed to fail and see that the government will step in to prevent them from failing when needed. Do we really expect companies with decades of bad management to suddenly change course after receiving this message from the government, media and American citizens?
I believe that just the opposite should happen. Companies that grow so large that they are considered this important to the US economy should have more responsibility placed on them (not less). I strongly believe that smaller more specialized companies are better for the economy, for various reasons. If a company decides to keep growing and diversifying then it should be willing to take on added responsibility, face tougher scrutiny, etc as it plays a greater role in the economy.
I would also like to add that fear is not a valid reason to support bad management and irresponsible corporate citizens. If we keep giving into the fear of what might happen to the economy now if these business fails, and insist on bailing them out then I believe the long-term impact to the economy will be greatly increased. The more the government tries to correct the economy, the worse shape it is going to be in overall. If a company can't succeed, they need to be allowed to fail so a better managed, more innovative company can fill that role. What I am seeing unfold is a situation where American Industry could be on the path to falling well below that of other nations. What I mean is that if this process of bailing out big corporations who are in trouble is allowed to continue the poorly managed companies will not only continue to exist, but will be receiving messages from the government and the US citizens re-enforcing their importance and ability to take huge risks. That is going to mean those companies stay at the top of their respective industries in the US, preventing other companies from rising to fill those positions. Gradually, other countries are going to pass us until one day American made goods are going to be viewed the way we view those made in Taiwan. This may seem far-fetched, but if you were to tell people 50 years ago that a Japanese auto maker would be the top selling auto in the US they would have thought you were crazy.
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Random thoughts from Some Random Guy
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