http://www.kyle-brady.com coherent thoughts on diverse topics Sun, 21 Mar 2010 15:47:40 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 http://www.kyle-brady.com/2008/12/19/the-end-of-democracy/ http://www.kyle-brady.com/2008/12/19/the-end-of-democracy/#comments Fri, 19 Dec 2008 16:20:59 +0000 Kyle Brady http://www.kyle-brady.com/?p=934
Because you're no longer a populist democracy when you do the opposite of what most of the intelligent people in your country want, and it's not capitalism/"a free market" when you're doling out obscene amounts of money to companies that are too inept to manage themselves properly.

First was the immensely ridiculous financial bailout, which we've all seen has been used essentially for large bonuses, giant parties (or "sales meetings" as they say), and huge takeovers.  And now we have the auto industry bailout.

Why did the "big three" auto makers have financial problems?  Yes, the industry went down with the economy.  But there's a bigger problem here:  they make shoddy products, eschew innovation for excuses and size, and continue to produce products that people are not interested in purchasing.

America's supposed to be a "free market".  And that means that if your company is no longer producing attractive products for purchase, or if your management is only interested in how rich they can get, your company fades quietly (or not so) into the night.  There's no handouts.  Maybe you get bought by another company, but you don't continue to exist on someone else's dime.

People have used the "Millions will be unemployed if they fail!  They're too big to fail!" excuse in the auto industry arguments, but that's not even remotely valid.  How many people have lost their jobs in the last 6 months, and they haven't even been part of a failing company?  They're not getting financial handouts to be able to keep all their employees on the basis of unemployment.

The "big three" should have gone under, or at least filed for bankruptcy - which would have given them a way to operate for some time to get on their feet.  Just look at the airlines.  And all the unemployed could file a class action lawsuit against the Board of Directors and Executives (CEO, CFO, etc.) for inept management (or whatever the legal equivalent would be), and potentially get a cut of all those large bonuses and salaries they've been getting for years while the company failed but celebrated their corporate fatcats.

Finally, using the markets as an indicator of success is comparable to the Chinese Government saying they successfully ended pollution in Beijing- everyone knows it's a lie, because they're only acting on rose-tinted self interest.  As shareholders, these people are investors in the companies, and the companies' continued existence is profitable to them, especially if the stock goes up.  But since everyone has their panties in a bunch right now, the temporary relief for these companies gives a glimmer of hope to all those Wall Street suits who've been crying into their glasses of Chardonnay for the last few months.

Yes, not providing this bailout to the auto industry would have likely meant the end of the current American auto production companies.  But that's not necessarily a bad thing.  There are a number of small companies trying to grow into the mainstream (Tesla Motors, for example), and the foreign companies (Volkswagon, BMW, Toyota, etc.) have been selling more cars to Americans than American companies have...

We could have been on the pinhead of revolution in the auto industry, thanks to necessity, but those hopes have now been dashed.

Get ready for another 20 years of crappy American cars attempting to dominate the industry, and spending thousands of dollars on gasoline a year.]]> http://www.kyle-brady.com/2008/12/19/the-end-of-democracy/feed/ 9