Saturday, November 08, 2008

Bankers, consumers... now automakers

Everyone wants a bailout! Whatever happened to our advice to the Japanese when their economy went south in the 1990s? We (U.S. policymakers) told them to let banks fail, in order to cleanse the system of those who should never be allowed to survive. All others would become stronger as a result, and the economy would ultimately recover in a more robust manner. I huess we don't listen to our own words.

Now - because the automakers never did (really) understand [1] what consumers wanted, nor [2] what was going to happen in a peak-oil-world, they want a bail-out, too. And D.C. is considering it!(?). This will only give them the money they need to keep spending the way they have. What happens if one of them fails? The others will become stronger! What happens if we bail them out? They continue their spendthrift ways, without the wake-up call they need.

Opinion alert: I do not think we should reward bad behavior! With all the largess, hyper-inflation will be headed our way, soon enough. Keep an eye open for it.

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