Too Big To Fail

J.A. Schumpeter, used to refer to progress under capitalism as "creative destruction".

If General Motors fails, there will be plenty of capitalist vultures ready to feed on its carcass. Nothing of value will be wasted.

Yes, capitalism and the free market is harsh and brutal. It is not kind and sympathetic. In its pure form, which has never existed, it is efficient, and benefits all consumers.

We are constantly hearing the politicians crying that a company is "too big to fail", and the government must confiscate some money from all the taxpayers in order to save the big companies, companies that have been huge campaign contributors, and companies like General Motors who have unions that vote in favor of the democrat party.

By the description of the pretend Cassandras in Washington and Wall Street, one could say all of the Fortune 100 companies are "Too Big To Fail".

If these corporate statists want to hide behind the excuse that they are too big to fail then I think it's time to break up these companies that fall in that category. The government should break them up for the same reason the government broke up Standard Oil in 1911.

If General Motors is too big to fail that means they have so much of the market that no one can replace them, thus they are in effect a monopoly, and they have too much political power.

The same can be said about American International Group, AIG, who the government gave over 100 billion dollars because the government and lobbyists thought AIG was "too big to fail".

I believe if these politicians were around when the steam engine replaced the sailing schooners they would have said the sail manufacturing industry was "too big to fail".

If a company thinks it is too big to fail it will become careless. It will become inefficient because it knows it will not have to compete in the free market. It knows it will have the political clout to blackmail the government. This inefficient giant will remain and be an albatross around the neck of the society that is forced to keep it in existence.

If a company goes to the government and tells the government we need a bailout because our demise would have a serious effect on the economy, then the government should force them to sell off parts of their business. General Motors should be required to spin off some of its plants and start a new corporation with the cars from those plants.

Some say the Big 3 factories are needed in an emergency to produce war material. This is not necessary. Foreign companies produce cars here and their factories could be nationalized in a war emergency.