Is Anything Really “Too Big” to Fail?

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The Kiplinger Letter Forecasts for Management decisionmaking made the following observation in the November 7, 2008 edition: “Does Uncle Sam have a choice on bailing out the Detroit Three? Not really. The three U.S.-brand automakers don’t have enough cash. Miserable sales mean little money coming in from dealers. Borrowing is out of the question… [C]redit ratings of all three companies are in the tank. No one wants to buy them.”

It is obvious to the market place that these entities cannot sustain how they conduct themselves in a competitive market place. Apparently, this does not matter to elected officials and bureaucrats. While the market place will not roll the dice and lend to or buy these companies, our government representatives seem willing to take our hard-earned money and roll the dice. After all, it is just taxpayers’ money. Politicians have a great deal to gain. Both the Big 3 and the United Auto Workers (UAW) give millions to politicians and provide thousands of workers for their campaigns.

U. S. House Speaker Nancy Pelosi proclaimed that bankruptcy for the Big 3 “is not an option.” Instead of allowing the marketplace to work, Pelosi and company are working to providing billions of our dollars to support a union and industry that have ignored the market place. These entities have paid homage to these politicians in the form of cash and election support. Now, they are seeking their payoff. They hope, with the help of Congress and the President, to make taxpayers fund what no rational investors will.

Read the full article at the Fitzgerald Griffin Foundation

Date published: Dec 12, 2008

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