Ed Driscoll

They Bought Their Tickets, They Knew What They Were Getting Into. I Say--Let 'Em Crash!

The L.A. Times calls for–surprise!–a mammoth government bailout of America’s Big Three auto manufacturers. In contrast, Bill Quick says market forces should be left to do their thing:

No, you must let them collapse. They are the automotive equivalent of Terry Schaivo – dead husks that need to be buried, not embalmed in a living death. One of the reasons that the American auto industry is in such sad state is that decisions are influenced by the moral hazard generated by a governmental policy of “too big to fail.”

This sort of thing emboldened the automakers to accede to outrageously exorbitant union demands, particularly in the area of pensions, because they knew that these monumental unfunded liabilities would be picked up by a politically sensitized government unwilling to accept the sort of awful publicity that involves taking money out of the mouths – or retirement accounts – of seniors and other pensioners.

The business of capitalist business in productivity engendered by creative destruction. Nature’s law of tooth and fang has nothing at all on capitalism’s law that the market will destroy the weak and clear the way for newer, stronger businesses to take their place.

If Ford and GM are too weak to survive without government help, let them fail. Something newer, better, and stronger will replace them. Count on it.

I agree.

Calvin Coolidge will be eternally misquoted as saying that “The business of America is business”, but one thing he actually did say, when asked, near the end of his administration, about its greatest accomplishment, “I think it would have to be, minding our own business.”

Would that modern politicians thought the same way when it came to meddling with the marketplace.