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FacebookIt’s official: The Wife is legally mine (I initially penned that line “The Girlfriend”–old habit do die hard). She received her new social security card this week with her new last name–mine. And since she has my name on her that makes her my property. That’s not chauvinistic–it’s life. Kinda like when you’re a kid and you write your name on your football. You do it so everyone knows it’s yours. I’m not going to take a Sharpie and write on The Wife’s forehead, but that doesn’t change the fact she has my name and is now my property.
I’m hardly an expert and there’s a good chance I don’t even know what I’m talking about–but that’s never stopped me from giving my opinion. With that in mind, I think I’m opposed to a potential government bailout of US automakers. It’s my taxes and I don’t wanna see it wasted. I know we’re talking about putting a lot of people out of work–but I don’t see why the US government has to save a company that pushes products no one wants. That’s all it really comes down to. Isn’t the whole point of capitalism and free markets about letting the consumer drive product?
American cars are inferior to the Japanese product–that’s a bona fide, indisputable fact. This isn’t anything shocking or new–for the past 30 years everyone has known the Japanese make better cars. And instead of improving standards or rising to the competition, GM, Ford, and Chrysler have continued to push out the same products. The Japanese cars enter America in the 70s–that’s 30 years the Big Three has had to adapt. They could have copied the Japanese business plan. They could have improved their product. I’m not saying Detroit didn’t try–they might have (who knows what goes on behind closed doors). But I know this: they failed. We have 30 years of evidence: Japanese car makers are far superior at their craft than the Americans.
What’s the point of investing a bad product? If Congress gives automakers $25 billion, it might help them fight off bankruptcy–but for how long? Consumers clearly don’t want their product. If we give them $25 billion now, where will the next $25 billion come from? It won’t be from the consumers–the market has already spoken.
Economics are a lot like Darwinism–survival of the fittest. Detroit had its chance: they blew it. American cars are clearly a product of the past. No one cried to bailout beta when it died. There weren’t congressional hearings to determine if HD-DVD was worth saving. Granted, neither one had as much money at stake–but the point is the consumer spoke and decided which product it wanted. I don’t want my money be given away to executives who don’t know how to run a successful business.
US automakers are producing an inferior product the market doesn’t want. If we give them $25B now, it won’t solve their problem. The taxpayers will have to cough up the dough and will see little reward. The money won’t go to better products or cheaper cars. Did we not learn anything from the bank bailout? The money didn’t help stabilize the stock market. It didn’t bring financial levels to where they were a eight weeks ago. The money went to executive’s salaries and plush retreats.
If the government insists on giving money to Detroit, it should do it in a way that directly benefits the consumers. Instead of $25 billion going to General Motors, why not impose an immediate 25 percent discount every car GM sells? This is better than free cash–it encourages consumer spending. Congress seems to think the bailout isn’t a gift and it holds the car manufactures responsible for the debt–why not do something creative with it? If consumers knew they could buy a $20,000 car for only $15K that should increase car sales. Congress could do it one of two ways:
1) Have the consumer pay $15,000 and the government will pay Ford the difference. Ford would increase sales, consumers would receive a direct benefit, and US government can still get its money back from Ford in whatever agreement they had planned.
2) Or consumers can pay GM $20,000 for the car and receive a $5000 rebate from the government. GM would still be held responsible for the $5000. Sales should increase because an indirect lower cost to the consumer. In all likelihood, consumers will then apply that rebate to some other form of spending to stimulate the economy.
In either case, the inept automakers don’t get cash directly. They would still be forced to improve their product and push for sales (the idea of them getting $25 billion without having to do a thing makes my blood boil). The burden still falls on Detroit to sell cars–all Detroit would have to is make a product people really want.
But I’m not an economist–I majored in creative writing. The only thing I know is how to write and criticize all those who made bad decision. I also know this: I didn’t create this mess and it shouldn’t fall upon me to fix it.