Shocking Development, Capitalism Works!


Today, Ford Motor Company reported a 3rd quarter profit of $1 billion, stunning socialists everywhere, mainly Washington Democrats, and  in the process demonstrating for all those who may have forgotten that, surprise, surprise, capitalism still works. Having initially gone to Washington with its big three cohorts, GM and Chrysler, to seek a government bailout in light of the economic collapse; Ford quickly realized what all good capitalists know, that allowing Congress and the president to take ownership of their company would be the end of Ford as a productive entity. Withdrawing from the bailout process, Ford’s management team continued implementation of the turn-around strategy they had begun in 2005. It would appear they have gotten it right.

Meanwhile, down the road at GM and Chrysler Obama was firing CEOs (something he had absolutely no authority to do),  shareholders were being diluted on a massive scale, unions were being forced to take huge pay cuts and the companies are being forced to sell off assets such as Hummer, Fiat and Saturn. Yet, with all that, profitability is nowhere in sight – not this quarter, not next year, perhaps never. Instead, billions of American citizens’ hard-earned dollars are being poured down the drain to save what in reality may not be savable.

That’s how capitalism works; it isn’t pretty and not everyone gets a gold star on their quarterly earnings or a ribbon just for participating. Some companies succeed and some fail. Often the failed companies come back following bankruptcy, or they are acquired by their competitors. In some cases they simply cease to exist. The beauty of the free market is that this only happens if the market has determined that the company is worthless and beyond saving.

Too bad Congress and the President don’t seem to understand these simple laws of economics –  laws they should have learned in Econ 101.  Instead, like a parent who tries to protect their child from every potential harm only to end up creating weak adults unsuited to the competitive real world (see Generation Y), the government continues to bail out businesses and in some cases whole industries resulting in weaker American companies and a weaker American economy overall. Imagine what might happen if they would only get out of the way. Perhaps the car companies in America would be more like Nissan and Toyota – highly competitive, tremendous market-leading products year after year, well-paid workforces and most importantly of all, consistently profitable and never having asked for one penny of taxpayer money!

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