By Troy Dunn
Dear fellow Americans,
Many of you realize that bailing out bad businesses is a very bad idea. Some of you are conflicted about this when it comes to "the big 3 automakers". Let me explain it to you in a way that may make more sense.
First of all, lets all stop using the phrase, "the auto industry" when talking about the proposed bailout. The big 3 are not the entire industry. They would like people to believe so, but they simply are not. There are other players in the industry both big and small who will fill any hole left by the demise of any of the "big 3".
And while we are changing our vocabulary on this topic, lets stop calling them "the big 3". What does that really mean anymore? The 3 biggest piles of debt? The 3 most out of date car builders in the U.S.? If they need a title, perhaps we can call them "the Worst 3" or maybe "the bankrupt 3" or possibly "the bottom 3". Let's not let self-ordained titles linger any longer. They only cause emotional confusion for Americans who don't want to bail them out but don't want to be accused of being un-American. They are not "the big 3" on any level that is good any longer.
How about a few fun facts:
Fact: When a snake sheds it's skin, some people mistake the peeling reptile to be a sick or dying snake. In fact quite the opposite is true. That snake is tossing off the old, useless skin for a sleek new surface which allows for better mobility and safety. The shedding skin isn't pretty to watch, but it is a good thing.
Fact: When a beautiful and majestic oak tree sheds its leaves in the fall, the untrained eye may mistake the tree to be dying. Of course most realize it is a very natural and wonderful part of the cycle of life. We know that those suddenly bare branches will eventually be covered with thick, green, healthy leaves bringing beauty, shade and even oxygen to the environment around the tree.
So it is with a free market. Every day, week, month and year, a free trade market is busy shedding bad businesses and making room for new young growth. It is extraordinary to witness. To the untrained eye, it may seem that death is in the air when in fact the exact opposite is true. It is one of the amazing and consistent elements of our economy and a part of what makes America the land of opportunity.
Only a fool would try to tape the shedding skin of a snake back on to the snake. Only a fool would attempt to artificially attach the fallen leaves of a winter tree back to the bare branches. AND ONLY A FOOL would think that pouring billions of dollars into a bad business will somehow over-power the free-market process. Bad businesses (regardless of what makes them a bad business) will always be flushed out of a free-market to make room for good businesses. it really is that simple. That's the good news of the day. If a company sells a superior product at a competitive price, is properly managed and operates within it's means, it will thrive in a free market. Anything less will cause it's eventual demise.
Thank God for the free market system.
For those who are still struggling with whether or not these old-timers in the auto industry should be bailed out, try this little exercise; every time you hear anything said about "the big 3 automakers" in the news, replace those 4 words with these 4 words, "8 track tape industry". Soon, you will understand that companies who continue to offer out-dated products and inferior technology must eventually fade away. It's not mean-spirited or un-American, it's simply good business. When the 8-track tape industry was losing market share to cassette tapes (who lost market share to CDs, who are now losing market share to mp3s) there were jobs lost, plants closed, etc. But the world kept turning. People who were employed as 8-track tape manufacturers eventually learned to build cassette tapes and new jobs, companies and industries emerged. So it will be when (not 'if') one of the major auto makers goes belly up.
This purging of old technology and out-dated business models has been needed in the auto industry for decades. Finally, the time for change and progress has come to the automobile business. Don't fear it; embrace it and celebrate it. Better cars, better fuel economy, better fuel options, better value, better designs, they are all forth-coming. Nothing can stop it now for the free market has spoken. But one bad thing could occur; tax payers could lose billions of dollars trying to save the automotive equivalent of the 8-track industry.
My fellow friends and tax payers, say NO to taping the shed skin back onto the snake. Say NO to trying to put the fallen leaves back on the winter branches And by all means, say NO to investing in the failed and out-dated businesses of Ford, GM and Chrysler. Yesterday is gone. Tomorrow is on the horizon. Lets move forward.
We will be better for it, I promise.
And that's a DunnDeal!
Troy Dunn
Author: Young Bucks: How To Raise A Future Millionaire
AKA "The Locator" on WE TV
