Whatever happened to risk/reward? Assume some risk, take some chances, put up some capital, and reap the benefits, if they come. The higher the risk the greater the reward. That used to be the deal. Apparently not anymore. I think the equation is now something like, the more irresponsible the decision, the bigger the bailout.
If the government is going to backstop every failing business in the United States, then why do we need an equity market?
Is anyone else worried about the sustainability of the bailout frenzy? We are bailing out most large banks and strategic insurers. We are discussing a bailout for the US automakers, homeowners who borrowed too much money and credit card holders who cannot pay their bills. Just about everyone who is strapped for cash is apparently bailout-eligible. We can print all the money we want, it doesn't mean it will be worth anything. We can float all the bonds we want, but it does not mean that anyone will buy them. Anyone remember stag-flation?
Why can Toyota and Honda make money selling small cars and the Big 3 can't? Maybe the UAW has something to do with it. Maybe artificially high wages and rich benefits for life have something to do with it. The Big 3 will never be competitive until they get the UAW monkey off their backs, which means they will never be competitive.
Remember Eastern Airlines? Remember when the Union decided it would rather take the airline down rather than give in to management? When was the last time anyone was on an Eastern flight? The Union got their way and everyone lost. Organized labor has outlived its usefulness. It has been reduced to being a drag on the real economy and the icon of the new, new economy, where no one can fail, and and guarantees of guarantees result mediocrity at best and implosion at worst. Feel better? Me either.
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