Friday, November 14, 2008

A Dollop of Buyer's Remorse

I'm not feeling too happy about Obama's advocacy of a GM bailout, especially since it's one of his first economic moves. I don't like the trends it symbolizes.

From (which reports on Krauthammer and Brooks):

American prosperity relies on creative destruction—the failure of nonviable companies and their replacement by defter rivals. The government endeavors to protect the worker in periods of transition, writes David Brooks in the New York Times, but not the firms themselves. That’s why the auto-industry bailout is a bad idea: Extending the life of the Big Three means preserving their unworkable business models.

The financial bailout ensured that the system itself continued to function, Brooks writes, but “a federal cash infusion will not infuse wisdom into management” at GM, Chrysler and Ford. Charles Krauthammer, in the Washington Post, agrees, writing that the Detroit bailout underlines philosophical differences between Republicans and Democrats: “In this crisis, we agree to suspend the invisible hand of Adam Smith— but not in order to be crushed by the heavy hand of government.


Jer979 said...

I agree. bailing out the big 3 is like aspirin for a heart patient. They are going to die...except for the fact that this is expensive aspirin.