I'm so tired of hearing more and more companies lumped into the "too big to fail" category. Someone, anyone, please acknowledge that we still operate under some semblance of capitalism -- let a company fail for a change!
Capitalism may seem cruel, but in the long run, letting poorly run companies fail is both logical and orderly. If a company can't compete on its own vision and merits, propping it up ultimately does no one any favors.
Unfortunately, our nation seems only too happy to rush to the aid of every giant, lumbering, non-innovating, politically connected company we can find. If this keeps up, all we'll have left are non-competitive companies awash with lobbyists, all deemed too big or important to fail, and no one will learn anything from failure. Meanwhile, innovative companies with genuinely strong operations will suffer.
A future where the losers can still win sounds corrupt and dystopian to me.
And the nominee is…
I can see why people are afraid of letting Fannie Mae
But the latest rumblings suggest that Detroit's Big Three automakers are now seeking "assistance" from our government, too. When our country is already so deep in debt, why can't we start saying no? (And why do I have to even ask that?)
So I have an ideal nominee for the first sacrificial lamb. Why can't we let General Motors
Then there's the $27-per-share loss GM delivered recently -- in one quarter. Talk about an utter disaster. How does one company even manage to do that? That mind-boggling number only further convinces me that a bailout of any kind is as huge a mistake as any investment in this stinker.
Have I got a risk for you!
I know the city of Detroit's situation is dire as its major employers falter, but isn't the damage pretty much done already? As these companies continue to underperform, blunder, and stagger, they've already cut thousands of jobs. I'm pretty sure most of the Detroit autoworkers have seen the writing on the wall. (Maybe some of them even wish they could just go work for Toyota
And what about the top brass at all these bailout-hungry companies? I'm sorry, but those dudes rake in mad money every year. People who defend runaway CEO compensation often argue that corporate bigwigs take on "risk" when they accept such high-ranking jobs. If so, why shouldn't those top executives be on the hook to contribute some portion of what they got paid while things went bad under their watch?
If a bailout proves necessary, why shouldn't a company's highly paid leadership help? Individual responsibility seems completely absent these days, as rank-and-file employees, shareholders, taxpayers, and society at large face far worse financial risk than top executives do.
You can't turn a loser into a winner
Continuously bailing out losing companies makes me wonder why we don't just change our name to the People's Republic of America. (And hey, don't most of these bailouts primarily benefit people who are already wealthy? At least in socialism, the government mainly redistributes wealth to poor people...)
It's not my fault -- or yours -- that companies like GM haven't been able to learn a darn thing for their troubles, except perhaps how to keep operating in an almost willfully subpar, noncompetitive, illogical manner. If they're not going to get a clue, I don't see why we should have to foot the bill.
Come on, people. We're better than this. Let those that deserve to fail, fail, for once. Maybe then, the ideas of "risk" and "reward" will start regaining merit. Otherwise, we're just on the highway to hell.