Wednesday, July 8, 2009

Not allowed to fail and not allowed to succeed

I loved this sentence from an editorial by Holman Jenkins that suggests that the Obama administration is crippling the airlines:

The new administration seemingly won't let companies fail, and won't let them succeed either.

That is a great line. The administration is refusing to let big companies fail, even companies like Chrysler that should fail, but then is handcuffing them so that they cannot succeed either. Proof of that statement? What do you suppose the likelihood of success is going to be for an auto company being run by the governments of the U.S. and Canada and the UAW? Pumping out cars that have already been proven to not be what consumers want, and making them at a loss? Pretty slim. It seems that even after the managed bankruptcy, there is little chance GM will be able to succeed as more than a lab for social experimentation.

The Administrations economic policies leave companies in a state of perpetual dependency. They cannot move forward because they are crippled and no one will put them out of their misery. They cannot be allowed to fail, we are told, because that would be so damaging to the economy with not thought to the damage done to the economy by deficit spending and taxation to prop up these companies. So they keep shuffling along, bleeding money and becoming an even greater burden on the tax payers.
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