I’m curious what your take is on our current issue with bailing out large corporations. Many Wall Street firms that were bailed out are being scrutinized now for handing out bonuses this year. The idea is that they need to reward those who have continued to work hard and, perhaps more importantly to those getting the bailout money, giving away bonuses is what keeps the financial firms competitive. In the articled linked above, one Wall Street exec is quoted as saying, “nobody wants to be the one not paying bonuses when others do.” So while Americans are losing their jobs and their homes, Wall Street firms are using government money to boost six-figure salaries. Something doesn’t sit well with me about that.
General Motors is also on the brink of collapse, looking for a handout from the government. I feel a bit differently about this one, though. In the article above it is estimated that 1 in 10 American jobs is linked to one of the Big Three auto makers. A collapse of those businesses could be devastating to the factory workers building our cars. While I understand that our investments are tied up in companies like AIG and Morgan Stanley, my feeling is that people connected with the auto industry have more to lose than those connected with investment banks. Maybe I’m completely wrong, but, for what it’s worth, those are my thoughts.
How do you feel about this issue? Are you for the buyouts? Against? Indifferent?
5 responses so far ↓
Chris Bedard // November 12, 2008 at 11:19 pm |
Buy Outs. That is not exactly what is happening. Most of these companies are on the brink of bankruptcies are going to cripple several thousand people. I think a better question should be how can we NOT repeat these economic policies.
Brandon Beall // November 13, 2008 at 2:41 am |
Government bailouts of publicly owned corporations is not a good idea at all. In fact it is another step towards the political shift in the country from a democracy to socialism, I’ll get back to that in a minute. Bailing out corporations in my view and understanding violates the free trade and free market economic structure that this country has been based on since its inception. If a corporation is on the verge of bankruptcy, then that corporation is not strong enough to survive the economic natural selection. If it is going to collapse, let it collapse. It opens the market up for more competition. Use the airline industry as an example. Numerous major airliners have been forced into bankruptcy and the response has been the creation and flourishing of the smaller airliners along the same lines as JetBlue. Did the government step in to bailout those corporations? No. Is the airline industry still afloat? Yes. Why all of the sudden do we need to bailout these corporations.
Back to the progression towards socialism, a command economic structure, which is employed in a socialist society, has yet to be proven effective on a large scale. The only recorded success of socialism has been in the kibbutz, a small local farming community in Israel. The problem is that people in a socialistic society have no incentive to better themselves and have nothing to work for. Human nature does not always act in the way a Christian thinks it should. Human nature teaches us to look out for ourselves. God teaches us to look out for one another, but not everyone knows God. These buyouts cause similar problems in that companies will no longer do the best they can to succeed because they know the government is now there to bail them out of trouble. This is a violation of everything that the United States Economy is based on.
Cory Jones // November 13, 2008 at 4:20 am |
Interesting comments B-Beall. Good comparison to the airline industry. Perhaps if the “giants” fall, there will be more competition. I would just hope that, unlike the airline industry, the competition would be a result of lower prices, lower costs, lower rates, etc.
Ben Steele // November 15, 2008 at 4:22 pm |
The Wikipedia article on Creative Destruction may be helpful resource on this topic.
Angell Swedlund // November 19, 2008 at 9:40 pm |
I feel bailouts of companies are just like bailouts of individuals…..wrong.
People should learn to live with the consequences of their actions. I assure you that if all these companies were MAKING money, they would look for ways to keep most of it and not pay any in taxes or in discounts to consumers. Just like, I feel certain all the people who made thousands flipping their houses were more than happy to keep that money. But now all of a sudden they are stuck in a house they can’t afford, or they have mutiple homes they can not afford or don’t want to afford and it is supposed to be my problem!
…..what I really hope for the future of America is for parents to start teaching their children the age old lesson of PERSON RESPONSIBLITY…alas, I don’t know how kids will learn this since most parents don’t either!