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A personal blog. I am an: Award-winning writer. Non-profit entrepreneur. Activist. Religious professional. Foodie. Musician. All around curious soul and Renaissance man.


Friday, November 14, 2008

Big 3 Bailout: Anti-Trust Perspective

I don't care if the Big 3 auto makers go down. They lack vision, they are inefficient businesses, and their sales are proving it. I have worked with GM and Ford in my professional life, and the former especially is one of the least progressive businesses I have seen.

They were trying to push SUV's when the Japanese years ago saw that the future was in fuel-efficient cars and hybrids. It didn't take a genius to realize that. Just the other day I read that Ford is still holding out hope for a resurgence in SUV sales in the wake of current low gas prices. They just don't get it.

SUV's were a temporary fad that would not last when gas prices inevitably go up. The consensus of experts out there clearly says that gas prices will rise sharply as oil reserves become more scarce and most costly to extract from. We can call the Japanese "visionary" but it was more common sense. I don't say that to slight their achievement, only that it should not have been that difficult for US automakers to get on the fuel efficient bandwagon when the evidence was pointing that way.

The SUV/hybrid divide is only one example of why the US Big 3 are collapsing in competition with Japense automakers. It is easy to say we should let them fail on their own and let more successful busineses take their place.

However, the question of the bailout still lingers. Does the country want to go through a painful transition period if they go under? There are plenty of other car manufacturers out there who are more successful businesses. However, it won't be a smooth transition if millions of Americans are suddenly unemployed. They aren't going to simply start buying more Japanese cars--what will happen is that millions of Americans aren't going to buy any cars. It is too much of a shock to an economy that is already reeling. As a result, I'm on the fence when it comes to a bailout. But if we're going to do one, I do support Obama's idea that a bailout should come with strings attached to re-tool the US automakers to transition toward more fuel efficient cars.

It makes me wonder why our entire economy is so dependent on a handful of large corporations and banks so much that if they go under our entire economy goes under. These recent bailouts are all based on this idea--these entities are simply too big to fail without forcing the rest of us into economic hardship. It makes me wonder if our anti-trust laws are as strong as they should be. We should never be in a situation where the fate of a few large corporations determines the fate of our entire economy! We aren't diversified enough.

It our entire economy is so entirely dependent on such a small number of businesses, then I think they fit the definition of a "monopoly" and should have been broken up years ago.

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