Detroit, 12:14 PM
Wed Nov 11
30 posts in the last 24 hours
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Jalopnik 
11/17/08
"NARP!"
11/17/08
I kid, I kid.
Kind of.
11/17/08
No one saw that coming.
/sarcasm
11/17/08
11/17/08
Yep, that is exactly what capitalism is theoretically about.
Except for the one little detail that we live in reality, not in theory. And the reality it, if two of the recently-termed "not-so-big 3" go down, then every single one of these suppliers go under as well. And let us not forget that these suppliers don't just supply the "not-so-big 3", they supply the Asian and European automakers as well. So if they go under, many of the Asian and European automakers will find themselves in a very difficult position. Granted, they will likely survive, but the near-term consequences would be disasterous to the US.
Once again, when it comes to the automaker bailout, everyone spouts the old "capitalist theory" line, and completely fail to see the vastly larger picture that is reality. And yet, when it came time to bail the banks out in a capitalistic market, oh lord, think of the consequences that would happen if the banks fail! Let's give them a butt load of money for making management decisions that were so poor they made GM look like an efficiently-run business.
Theory is fine and good in the classroom. But when you are in a position in which you are hurting for money in an economy where you can barely keep a roof over your head and feed your family, just suck it up and take heart in that old capitilast theory line: let them crumble.
11/17/08
Since, last I heard, Magna was doing just fine thankyouverymuch (although that could have changed), if they don't need a bailout, why wouldn't the Formerly Big Three just send more business thataway, thereby driving the smaller companies out of business? Would the government, then, stepping in to help the rest of the smaller companies not be seen as favouritism, and artificially inflating the prices of Magna, for instance?
Canada tried this years ago. They subsidized the production of a company producing jeans: Great Western Garment Co., or GWG. Canadians probably remember GWG jeans; they were poorly-made, used thinner fabric, and had lagged years behind the fashion trends of the day, but they were priced at often less than half the price of Levi's. Eventually, Canadians just ponied up the extra cash for the better jeans, and complained loudly about it until the government stopped subsidizing. At that point, the company failed.
What's to say the same wouldn't happen again? If the government keeps propping up these companies, what's the motivation to dramatically and drastically improve their product?
Again, the Canadian liberal-social-democrat is advocating free market economics. Something's just not right in the world.
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