Monday, June 01, 2009
The free market is a wondrous thing. A market has no morals. It's blind and brutal, but it's not debatable. If a restaurant doesn't make money, it goes out of business. If a person has no skills, they lose their job. There are winners, there are losers, but when the market is allowed to divide the two, there's not much that can be said.
A free market is like a sporting event. And the new brand of quasi-socialism the government is now practicing is like the Oscars. The Steelers won the Super Bowl because they scored more points than the Cardinals. On the other hand, Slumdog Millionaire won Best Picture because some nontransparent committee decided it was the best. Who decided that? What criteria was used?
See the difference? There's no debating the Steelers are the champs. But Slumdog Millionaire being the best? That debate is quite literally endless.
I own General Motors now. I don't want to. But We The People are now owners of General Motors. And we'll have to "invest" AT LEAST $50 billion of our tax dollars in order to resuscitate it.
If the free market were allowed to do its dirty work, General Motors would be wiped off the face of the planet. All those auto workers in Michigan and Ohio would lose their jobs. As would those auto workers in Mexico and Canada who do a hefty portion of GM's manufacturing. And then GM's parts suppliers would go bust. So industry in the Midwest takes a big hit, unemployment dramatically increases, and shit hits the fan.
But hang on a minute. The government seems to think that GM can be resurrected and in 4 or 5 years, it can become profitable. And that's why we're putting tons of money into it, so it can be reborn and eventually pay us back.
If this is true, that GM can make a comeback, then why do anything at all? Instead of forcing the comeback, why not let it die and be reborn naturally via private sector investment? Or let another car company, like Ford or Toyota, take over GM's territory in the market?
If GM, or another entity, can regenerate Midwestern industry in 4 or 5 years, it will be able to do it ON ITS OWN. If no entity or entities can do this, then a GM supported by the government will also be destined to fail.
To simplify: you own a bar. The bar goes out of business. If a bar or some other business can be profitable in that location, it will be. Someone with money to invest will open a bar, or a restaurant, and will either succeed or fail.
The other alternative is that the government invests in the bar. If the bar succeeds, then it would have succeeded with private investment anyway, so government intervention was meaningless. If the bar fails, the government loses money.
How come the government didn't save Boston Billiard Club? They had some fiiiiiiiiiiiiiiine bartenders.
It's a no-win scenario when government invests in private businesses or industry in an effort to save them. Because if the government does win, the private business (or some form of it) would have won anyway.
And before you counterargue by citing the bank bailouts, banks are banks because they have cashflow. The credit crunch occurred and they couldn't get cash. Without cash, banks freeze and can't do business. The bailouts weren't a loan to failing companies, they were fiscal lubricants applied to a grinding part in order to allow the larger machine to move with ease.
Then you get to the United Auto Workers. It's funny. The tone of the conversation might change if instead of calling them workers, we called them voters. Instead of saying "3 million workers' jobs were saved" let's say "3 million voters' jobs were saved." Barack won Ohio by less than 300,000 votes. How many auto worker/voters are in Ohio? Curious.
The UAW took some concessions in the GM bankruptcy. Like they can;t get Viagra or Cialis from the corporate health plan. They maintain their base pay, and there's been a minimal reduction in benefits. They won't get tuition assistance for their kids' schooling for 1 year. Cue a violin.
WHAT THE FUCK? No reduction in base pay???
I wouldn't care, except I OWN GENERAL MOTORS NOW!!! Why do these people get paid the same when a replacement could be hired (especially in this dry jobs market) for half the fucking pay???
Again, I wouldn't care if it weren't my money. If some company wants to pay a worker $60,000 when they could pay them $30,000, go right ahead. But when that worker is getting paychecks that come out of my pocket, I'm going to stand up for myself.
And how come successful car dealerships, like Westminster Dodge in Westminster, MA are getting forced to close their doors, yet these UAW fuckos are getting to keep the same base pay?
This is anti-market-morality. Successes are losing their jobs, failures are keeping theirs. Thanks, Barack. Could you imagine being in a school where the A students were held back and the F students skipped a grade?
And where does this $50 billion come from? Obviously from us. Well, kind of. Most of it will probably come from the upper class and business tax hikes the Democrats are pushing. Sounds great, right? Steal from the rich, give to the poor.
Nothing wrong with that, right? Except, the money taxed from those rich fat cats would have been invested in some other business. You know, a business that had a track record of success. Or the money would go to pay a maid, or buy a yacht, or import caviar. But importing caviar gives a job to the caviar importer. Buying a yacht gives a job to the yacht crew, as well as the dock workers where the yacht is anchored, as well as the people who made the yacht. And hiring a maid is pretty explanatory as a job creation.
Even if a rich guy just puts their money in the bank, that money gets loaned out to others.
So instead of letting people WHO KNOW THE RIGHT THINGS TO DO WITH MONEY spend and invest their money, the government (WHICH DOESN'T KNOW WHAT TO DO WITH MONEY) takes it, throws it into a company that's already gone bankrupt, and is paying workers more than what they're worth.
That's great, that's super. So instead of moving on with our economic lives, acknowledging the mistakes of companies like General Motors, we're trying to raise the dead. Instead of letting people spend and invest their own money, we're taking it from them and throwing it into a welfare company just so voters in swing states keep their jobs and vote Democratic in 2010 and 2012.
I think I'm going to move to China in order to live in a capitalist country.
Posted by rob at 1:24 PM