Free Market Extinction

In response to a rant about the big three bailout proposal.

I agree with your rant against the potential bailout for the big three American auto makers. I too believe that a failed business strategy in a competitive market is not justification for a bailout. The big three previously focused on larger, passenger heavy vehicles for production. The realization that consumers would move towards more fuel efficient cars should not be shocking since it occurred before in 1973.

Consumers flocked away from large cars to smaller ones in part to an oil embargo which limited supply creating extremely higher costs for fuel. Coupled with the stock market crash of 1973, Americans chose smaller vehicles to save money in gas and pinch pennies. The 1973 crisis foreshadowed problems we would face today. With our economy experiencing a recession and with recent sky rocketing oil prices, our situation is not far removed from the incident 35 years earlier.

Union controlled employment in Detroit and other northern cities does not help American automakers either. The pay for union workers in northern cities is $78.00 per hour compared to southern foreign automakers non-union employee costing just $48.00 per hour. If a union member is on strike, guess how much he makes per hour? He still makes $78.00. Union control has decimated the American automakers making cars costlier and harder to compete in a market saturated with low cost, fuel economic automobiles.

In the end let’s allow free market ideology to reign where previous bailouts proved it to be a hoax. If we infuse these beleaguered businesses, the only payoff is that we will stave off the inevitable collapse for a few more years at the expense of the taxpayers.