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I don’t think it will shock anyone to find out that I was totally against the auto bailouts from the beginning, but when I made my list of reasons for having an anti-bailout position, “consumer resentment” was never on there. I guess after watching these Rasmussen polling results I should go back and add it.

If you spend too much time thinking about the auto bailouts, it can be quite infuriating. First off, it really raises my ire to see the government interfering in private businesses, which the Constitution does not give them the power to do even if they feel it is for the greater good. Then you have to think about how they interfered,…by giving these companies our money! The main reason these companies were in trouble is because most Americans didn’t want to give them their money by buying their cars. However, we ended up giving them our money anyway, against our will, and didn’t even get a lousy car in return, all in an effort to keep them in business because we didn’t buy their cars. Does that seem like a really cruel irony to anyone?

But what about the jobs? That is the main justification used by the federal government for these auto bailouts. They say that during the current economic crisis, if GM and Chrysler had gone under, the subsequent job loss would have been just too much for the economy to take, and things would’ve gotten a lot worse than they did. I don’t dispute that, losing all those jobs at once would’ve made things worse at that time, but the economy can’t begin to permanently heal until the final blows are dealt. The Government is making the death of GM and Chrysler a more drawn out and painful one, and they’re doing it on your dime. It’s not unlike a hospital patient being kept alive on a respirator despite having no brain function. The patient is the auto manufacturers (specifically GM and Chrysler) and they are brain dead (as evidenced by the fact that the would’ve gone out of business), but they’re being kept alive with the use of hospital machines (in this case your tax dollars). The most unfortunate similarity in this analogy is the final outcome. Eventually these types of patients are taken off the machines and pass away (in many cases because health insurance or family funds run out), and in the case of GM and Chrysler, they too look like they will die anyway, despite the artificial means that the government used to revive them (I just hope it happens before our tax dollars run out).

Maybe the Federal Government should just classify GM and Chrysler as non-profit charity organizations, because that’s how they’re currently operating. They’re making no-profit, but remaining open so that people can have jobs. These are jobs that don’t really exist, because by any Government-Unaltered economic conditions, these companies would no longer exist, and that’s where the charity part comes in. In the end you may ask, “what’s the harm? If it keeps people working and keeps the economy from getting worse, that seems like it’s worth a few of my tax dollars, right?” The harm is the same harm that always occurs when you apply a short-term solution to a long-term problem. The problem festers. It seems to be at bay because you’ve managed to mask it a bit, like dragging a rug over a giant, rotting whole in the floor. The floor is still rotting, and the whole is getting bigger, but everything seems alright.

Not allowing GM and Chrysler to fold is a short-term solution. If they had simply shut down, things would have been bleak, and I’m the first to admit it. Then the free market begins to heal itself. Think about why they were going to go out-of-business in the first place. The government would have you believe that these companies are just helpless victims of the bad economy, but that’s simply not the case. Many other auto manufacturers have managed to survive without government funding. Ford is still alive, last I checked, and many foreign car companies that have U.S. manufacturing plants, such as Toyota, Hyundai, Nissan, and Honda all seem to be doing alright. The sad truth is that GM and Chrysler engaged in business practices that caused them to make an inferior product (or at least a product that was not as desirable to the American public) at a price that didn’t compete. That’s how the free market works. Survival of the fittest. If you make a better product at a lower price you will get more customers, and if your competition can’t do the same, they will no longer be in business. So what would’ve happened if GM and Chrysler had shut their doors?

Any cars that GM and Chrysler have sold since they were bailed out would have been sold by another company, since those car buyers still would’ve needed cars. When you split the “pie” of car buyers into fewer pieces, each remaining car company would’ve done more business, and more business means potential growth. Over time, having two fewer giants competing for auto sales should allow continuous growth among the remain companies, and as the economy gets better, possibly even room for a new upstart company or two in the mix. Business growth and new companies means jobs, and that works out well considering all the unemployed people who would be looking for jobs, that used to be employed by GM or Chrysler. That’s how the economy heals itself, but it has not been allowed to do so. The car companies that were viable on their own have not reaped the benefits of running a better business, by gaining the market share or customers that they should have from the closings of GM and Chrysler, and therefore they haven’t grown their businesses. Any business that GM and Chrysler is still getting is a waste, since it won’t help to heal the economy once these companies eventually go under anyway.

I think that the bitter frosting on this cake of poor economic policy is the fact that Americans should want to buy cars from GM and Chrysler, so that they can succeed and we can see a return on our investment of tax dollars (don’t ever forget that those are your dollars that were invested, not the Government’s), but instead the resentment towards the bailouts are so high they would prefer to just write-off the billions and buy a car elsewhere. Maybe the White House can quantify that sentiment, and factor it into their next set of economic projections.

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