Wednesday, November 19, 2008

Save The Livery Companies!

Horse-drawn carriages are absolutely indispensible to our economy and a significant percentage of American jobs are related to carriage manufacturing, including whip-makers, horse breeders, wheelwrights, tailors (for footman peopleguy uniforms), farmers (wheat and oats) and stable builders. And what would we do without street sweepers? Ankle deep in manure, I tell ya!

What would livery companies have done with a government bailout? How much longer would that technology have lasted with artificial subsidies by taxpayers, simply because they were too important or big or politically connected to fail?

Businesses must be allowed to fail or change or succeed. Layoffs are awful--having been through several, including a company closing, I know. Whole industries come and go and some only survive as niche markets where once they were dominant--livery and candles? You can still find them, but you don't run out to Walmart in your buggy to pick up more candles now do you?

When big companies go under, the economy will be affected in a big way. No doubt. But if the boneheads who run those companies can't figure out how to be competitive, then why should we rescue them? No company or even industry deserves an anti-fail guarantee. It's not in ANYONE'S best interests. Sure, some jobs and CEO perks may be retained in the short run, but over the long term, prices will increase, quality will decrease, and we'll keep paying more and more to prop up failing companies and/or industries.

What has happened that most Americans do not understand this? Makes me want to beat people over the head with big, thick economics books. (Not that doing that would get people to understand economics--it would just make me feel better.)

And yes, I know the answer to my question. Of course it would be lovely if lots of people understand basic economics. What's a bigger problem than this knowledge black hole is the loss of the qualities of industriousness, ingenuity, risk-taking, and confidence that used to be an integral part of the American culture. Maybe we're too frightened to fail. Certainly, we're deluding ourselves that our government, the proppers-up of industries and companies that should rise or fall on their own merits, is too big to fail.


Kris said...

Oh, so...rational. Hubby was reading to me last night that GM (I believe) has had 20 straight years of losses. How is it that a company can't get it right after that much time, but is still in operation? I feel for the workers - really I do - but I don't think a bailout is the answer.

As an aside, I highly recommend "Who Killed the Electric Car" for a look at when GM *almost* got it right.

Mrs. C said...

You know, Jenn, I don't know MUCH about economics, but I know silliness when I see it. I wish they'd let the companies fail and pay special unemployment for a short span with the money if it would totally cripple the economy. I'm sure there's something, but I am a "heartless" sort of person and think people shouldn't be on welfare forever if they can find a job and are sound in body and mind. :]

I just keep thinking with bailout after bailout that EVENTUALLY we won't be able to borrow any more and the whole house of cards will come crashing down and NO ONE will be able to help each other so very much.

Elisheva Hannah Levin said...

Excellent analogy!

And there were such worries when the Model T came out, though no rescue was contemplated.

Part of the problem with the Big Three is that they have entered into agreements with the unions that make the costs of making those cars higher than the costs of making other cars, right here in the US.
But that is only part of the problem.

Chapter 11 is scary, and with my first husband I went through it and job loss due to changes in defense contracting. And it was NOT FUN, but we did survive, and he went on to do other things.

Change can we wrenching, but the alternative is much worse.

Kelly said...

Re: "Maybe we're too frightened to fail.", I think most Americans are actually too frightened to succeed. Too afraid to realize that the work that goes into being successful can only be done by the individuals, not be some government bailout. That's why so many are clamoring for government health care and other handouts.

Kevin said...

As a side note, American car manufacturing is booming, it's just that those Michigan companies who can't seem to do it right.

Also it's easy to vilify only the terrible management, who have earned their failure, but there are plenty of government regulation guns pointed at their heads too. Unsustainable contracts with unions they are forced to employ, plenty of regulations on how many kanooter pins must go in each fliget.

So I support a bailout of the auto industry. Bail them out of some of the regulation muck. Let each of the big three pick three irrational regulations each and throw in one bureaucratic oversight entity with my blessing to bail out of existence.

Then let bankruptcy court settle everyone's hash and may the best management win.