Was Ayn Rand right? - by Adam

On my way into work in the morning, I'll typically listen to Mike & Mike, maybe Bob & Tom, and some times, Free Beer & Hot Wings... that's a lot of ampersands!

Anyway, I was driving in the other morning, and I turned on AM 1230. I think the show was the Bill Press show. He was talking mainly to union workers from Detroit about the possibility of the 'Big 3' failing. Honestly, I was just amazed by what I heard. (and this isn't specific to him. I've been hearing this on TV news as well)

The talk is all about how we can make it work, and how we can make it so people don't lose their jobs. I keep hearing this 'too big to fail' talk, and it doesn't make any sense to me. Let's apply some logic to this situation, shall we?

Q: Why do people clamor for the government to bail out these big three car companies?
A: Because if the government did not, these companies would file bankruptcy, break up the powerful unions, and move down south where they can get labor for half the cost. Basically, people don't want to concede that they do not deserve a premium anymore. The fact is, GM sold more cars last year than Toyota. The difference is, Toyota made a great profit, and GM went in the red. If one has employees that cost 10-15 bucks and hour and the other has employees that cost 30-50 bucks an hour, who do you think will come out on top? It's unrealistic to think we can compete that way.

Q: Will the bailout solve the problem?
A: No way, not a chance, not in a million years! It's ridiculous to think that these companies, who will continue to do the same thing will get a different result. Again, companies that can get cheaper American labor will win out. That's the free market. It used to be that the 'Big Three' made an awesome product and had a stranglehold on the American market. Now, they make a sub-par product and are losing their monopoly. Should we as Americans take a lesser product and spend more money for it? I won't, I'll tell you that. (though Saturns are pretty good, and they're made in Tennessee, not D-town)

Q: So what about these workers?
A: People have this idea that all of a sudden there will be a lot of work gone in the US. Understand that 'Japanese' cars are not made in Japan and shipped here. There are plants here, and generally, 'Japanese' cars are made more by Americans than so-called American cars! People aren't going to stop buying cars, so there will be a great demand in the market, and either a new or reformed American car company will rise from the ashes to claim some of the market, or foreign companies will come in and add more factories here.

The point is, it doesn't make sense to delay the death of these companies, because it's going to happen. That's just the way it is. It has been coming for a while.

Ayn Rand wrote about the government stepping in and 'bailing out' companies who failed. The excuse they'd use for it was 'well, we can't let them go hungry' or 'they tried hard and made a good effort'. The fact is, if you are not providing a good enough product and/or service to stay in business, then you do not deserve to stay in business, and you certainly should not be bankrolled by the all-too-fleeced dream-chasing American people. Boo-yah.