Economic Darwinism: no taxpayer money for the auto industry
I don’t often agree with Mitt Romney. In my opinion, he represents much of what is wrong with the modern “conservative” brand. Regardless of what I may not like about Romney’s politics, there is one issue which Romney does understand quite well: business.
In yesterday’s NYT Op/Ed entitled Let Detroit Go Bankrupt, Romney lays out his case for opposing the $25 billion bailout of America’s failing auto industry.
As my loyal readers should already know, I am a staunch Darwinist, and one of the tenets of Darwinism is “evolve or die”. In the case of a business model, businesses must adapt their practices to find the right balance in which to maintain an affordable quality product, manage costs, and remain profitable. This is an incredibly difficult feat in that the world is a dynamic place; hence the necessity of evolution.
As Romney states, fresh ideas are needed in the American auto industry. One idea that is desperately needed is the breaking of the UAW. I’m not saying that the UAW is solely responsible for the problems facing the auto industry; the management teams also bear a very large share of the blame.
Regardless of where the blame should be placed, the auto industry’s problem is self-inflicted. Giving the Big 3 a $25 billion handout is much like giving your gambling-addict cousin a $1,000 and expecting a return on your investment. Eventually that cousin will return again (and again) for more money. Eventually, you will have to stop giving money to your cousin, or you will face an economic crisis of your own.
The Big 3 needs to learn to adapt its business model to accommodate the modern world or they will die. By not giving them the money they seek, they will be forced to face this inevitable truth. giving them $25 billion will not prompt change, and the government (read: taxpayers) will have gained nothing from the investment.
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