12-03-2008, 03:03 AM
Regarding Nationalizing GM:
Imagine you are the founder, or employee of an upstart American automobile company. You're part of a company that is making sound business decisions. Your company is profitable and your future is bright. Your automobiles are top notch and they being bought up left and right; you're starting to make a real dent in market share, both because of your wise choices and the poor choices made by your competition.
Your competition is slow to react to market needs. They have a bloated product line with repetition and self induced competition. They sell vehicles that are well made, but greatly overpriced compared to yours, partially due to their legacy agreements with labor. Your competition is hurting, and it's good for you. But wait... The government steps in and bails out your competition. Now the government is the majority owner of your biggest rival!
Will the government give sweetheart deals their new nationalized business? Do they get special breaks on taxes or fees? Do they get special consideration regarding zoning and pollution? What about tariffs? How does this affect your business? How can you possibly compete with a company with complete backing of the government? You're now up against a company with control over every aspect of business; someone who has the power to change the rules as they see fit; a company who if need be, can simply print more money to squeeze you out of business.
This is no longer an even playing field. This discourages small business and innovation. This is no longer capitalism.
Imagine you are the founder, or employee of an upstart American automobile company. You're part of a company that is making sound business decisions. Your company is profitable and your future is bright. Your automobiles are top notch and they being bought up left and right; you're starting to make a real dent in market share, both because of your wise choices and the poor choices made by your competition.
Your competition is slow to react to market needs. They have a bloated product line with repetition and self induced competition. They sell vehicles that are well made, but greatly overpriced compared to yours, partially due to their legacy agreements with labor. Your competition is hurting, and it's good for you. But wait... The government steps in and bails out your competition. Now the government is the majority owner of your biggest rival!
Will the government give sweetheart deals their new nationalized business? Do they get special breaks on taxes or fees? Do they get special consideration regarding zoning and pollution? What about tariffs? How does this affect your business? How can you possibly compete with a company with complete backing of the government? You're now up against a company with control over every aspect of business; someone who has the power to change the rules as they see fit; a company who if need be, can simply print more money to squeeze you out of business.
This is no longer an even playing field. This discourages small business and innovation. This is no longer capitalism.