Monday, July 27, 2009

Compare: Free Market Vs. Nanny State

Well, well, well (emphasis mine):
Ford Motor Co. posted a profit for its second quarter, while General Motors reported a drop in sales for the same period.

Ford Motor Co. ... narrowed its pretax operating loss to $424 million while reporting earnings of $2.3 billion.

The company attributed the net profit to a gain related to its recent debt-cutting actions.

The $2.3 billion in net profit compares with a net loss of $8.7 billion a year earlier.
On the other hand:
Meanwhile, GM reported that worldwide sales in the second quarter dropped 15 percent compared to the same quarter in 2008.
It would have been even worse if it weren't for a 7% year-to-year surge in Chinese sales.

Well, what about Chrysler (Fiat)? They're doing no better:

Fiat posted a net loss for the quarter ended June 30 of EUR179 million compared with a net profit of EUR646 million in the same period a year ago.

The loss was bigger than the median of forecasts of EUR110 million compiled from a survey of analysts by Fiat. Revenue fell 23% to EUR13.2 billion.

So, what can we learn from this? It's exactly as predicted: the free market always works better than a Nanny State-controlled entity. There is no plainer example than this.

Hot Air explains:
That doesn’t mean that Ford is out of the woods, but they’re doing a far sight better than Government Motors and Chrysler. Instead of delaying inevitable tough decisions by taking a handout from either the Bush or Obama administrations, Ford went to work on the structural problems that had them on the brink of oblivion. Their turnaround showed that hardnosed cost-cutting and product improvements could rescue a company, rather than a Deus ex machina bailout that would have maintained a sclerotic status quo.
And this is exactly what conservatives were saying last fall while we were opposing the bailouts:
The bottom line is that a bankruptcy and relaxing of the CAFE standards is the absolute best way to fix the real problems in Detroit. In other words, kick the government as far out of the picture as possible!

The Big 3 made promises to workers years ago, and those promises were unsustainable. It sucks for those people who are relying on those benefits, but the fact of reality is that those promises cannot be honored any longer. The answer is not to bail them out, but to force those companies to revise their commitments and come up with a workable, sustainable business model that does the least amount of damage to the least number of people. Letting them continue uninterrupted will not correct anything, but bankruptcy will force those critical changes.

The auto industry is in trouble, yes. But the fix is not to nationalize it - that will only cause vastly greater problems in the long run because the government is fundamentally unable to correctly run or dictate ANYTHING as competently as the free market.
I rest my case.

I'm sure this is in no small part due to the millions of Americans who have decided not to purchase an Obamamotors vehicle in the future. It's not that we don't want to support GM or Chrysler...we just don't want to support Obama's Nanny State, and they are now one and the same! Thus, Ford looks pretty damned good.

Of course, the longer this direct comparison goes on, and the better Ford looks -- GM and Chrysler will continue to tank because they're now owned by the government and the unions, the two entities least likely to care about quality or cost in their products -- the more likely it is that Obama will do something that will level the playing field with Ford. It'll be something that only the government can enforce, like speeding up the CAFE standards, implementing new environmental restrictions, adding new taxes, etc. He'll have to do something to prevent Ford from outstripping Government Motors and underscoring just how badly the government works when they've taken over private industry.

I hope Ford can have a sizable savings account built up by then because they're going to need it to survive.

There's my two cents.

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