Last updated on October 23, 2018
Over the last few months, the concept of “bailing out” failing businesses and industries has become pervasive. First it’s the banks failing due to their own greed and an excess of government intervention in the lending process. Next is the auto industry staggering under its own weight and failure to innovate. Most recently it’s the newspapers, finally falling prey to the inevitable death of the old media from the unstoppable pressure of the internet. The concept of the bailout is not a new one. For decades we’ve been sustaining, in what essentially is a long term bailout, the entire farming industry.
The problem with bailouts, however is that they are simply not American.
The entire concept of the American economy is based on our particular sort of economic Darwinism/Spencerism; the free-market economy. The economic powerhouse we became was because those businesses that dominated the landscape were the strongest; the most fit. They had to learn hard way. They had to create innovative… and sometimes unpleasant… methods of succeeding and taking and keeping the customer from going to the competition.
This approach to business has its roots in the very mindset of the people that made this country. They were the sort of people that struck out and tried to do things their way. They stuck their necks out and they knew they would either succeed or, sometimes quite literally, perish. Big gains meant great risk and bold action.
It’s not enough that people take these big risks. If every time someone tried something new they were successful it would sort of take the boldness and bravery out of the act. No one would ever really learn anything and bad ideas would flourish as well as good ones. It was just as important to the success of this country that some of the things people tried failed as it is that some succeeded and, of course, a heck of a lot more people failed than succeeded.
Failure teaches us the valuable lesson that it’s time to change what we’re doing. It is the impetus for gene mutation in this country’s economic DNA. Every time one business fails it teaches another business how *not* to run their business. Each failure is a lesson we can all benefit from.
There is a reason farmers are failing. We’re no longer an agrarian society and the primary business and product of our country is no longer food. We cannot expect to make a living fashioning stone spear-tips, either. Old businesses die out as the product they produce becomes less important or unnecessary. What is the point in supporting an archaic way of doing the food production of this country aside from nostalgia? Is our money truly best spent on nostalgia?
There is a reason the newspapers are failing. This is the digital age where news is updated by the minute, not by the day or the week. Periodicals and newspapers produce a product that is, by today’s standards, old news. If I grab a newspaper directly from the “presses,” it’s already a few hours old. Why people are worried about this backwards industry failing is just beside me. I don’t get my information from cave paintings, nor does the family gather around the radio to listen to serials. Technology moves ever forward and those that don’t change are left behind. This is a long time coming and I’ll personally be glad when everyone gets the news online.
There are a multitude of reasons the Banks are failing. Simplistically speaking it boils down to just a few. First, the government forced the banks to give out loans to people that would normally fail a credit worthiness test. It should come as no small shock these people are defaulting. Second, while banks were forced to give out a certain percentage of these loans, some institutions embraced the sub-standard mortgages with gusto and gave them out left and right; plain old-fashioned institutional greed. Lastly, if you work for $12/hour and your wife works part time and you have two kids, you cannot afford a $300,000 home; good old fashioned personal greed and a lack of common sense. Yeah, it’s worth several trillion dollars to save people and companies from being greedy. Or, how about this, we just let them fail and let smarter banks and credit unions benefit from the absence of these idiotic financial giants.
The Motor Industry is also failing from a myriad of issues, the largest of which is a failure to realize that giant, gas-guzzling, expensive to manufacture vehicles are not the wave of the future. In addition, giants like GM are finally beginning to understand that having 58 different brands isn’t always a benefit. This industry is notoriously slow to “get the hint,” and this sluggishness to react to the market is no small part of problems they have recently been faced with. If they go under someone will fill the gap. This is the absolute purest form of free-market survival of the fittest. If they’re failing, they’re not fit.
The dead horse I’m swinging at here is that when we take time and (vast sums of) money to prop these sorts of businesses back up, we are celebrating and enabling failure. By selecting these types of businesses or industries we are breeding the very failed portions of their economic DNA into all the businesses that descend from them. Not only is letting these businesses and industries fail an option, but it is the more preferable option in the long term. By suffering the small… and sometimes seemingly large… failures now, we save ourselves weaknesses in the economy down the road and build a better and more fit economic base.
So, after years of research and snide comments from school counselors and advisors, I can assert with certainty: not only is failure an option, it’s the best option!