Will Wilkinson summarizes the reasons why “saving” an auto industry that still thinks that it’s living in 1968 will hurt us all:
There is nothing that helps people more than high rates of economic growth, compounding, compounding. But everyone is not helped equally. Economic growth requires dynamism, requires “creative destruction,” and some people get trapped in the wreckage, become wreckage. Not everyone is hurt equally. That irks. We should do what we can to limit downside risk consistent with the goal of producing broad prosperity. And we should feel a pang for those whose expectations are disappointed, whose lives turn out harder than they’d hoped. But the impulse to freeze the system, to try to tape all the cracks and staple all the cleavages, to ensure that nobody has to explain to their kid why Christmas this year is going to be a lousy Christmas, that is one of our greatest dangers. Our sympathy, untutored by a grasp of the larger scheme, can perversely make itself ever more necessary. When we feel compelled to act on our uncoached fellow-feeling, next year’s Christmas is likely to turn a bit worse for everybody. And then somebody has to explain to the kids that they can’t find a job at all. Businesses that would get started don’t get started, wealth that would be created isn’t. And in just a few decades, the prevailing standard of living is much, much lower than it could have been had our sympathy been more far-seeing. There is no justice, and great harm, in diminishing the whole array of future opportunity to save a few people now from a regrettable fate.
We are, I am more convinced than ever, at a turning point in American history.
In one direction lies the comfortable quiescent corporate-socialism of Europe and it’s high taxes, slow growth, and high unemployment.
The other direction is more difficult, because it includes the hard task of allowing the consequences of bad business decisions to take their own course and forcing an industry that hasn’t figured out that people don’t want to buy their cars to change to face up to the consequences of decades of bad decisions, and greed on both sides of the bargaining table. At the end of it, though, lies the promise of a more vibrant economy where taxpayers aren’t force to subsidize the bad decisions made by others.
Which road will we take ?
