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Find out more about Ed: Ed Duffy has been a news junkie for as long as he can remember. In 1972 he stayed up late with his transistor radio to his ear listening to the final election returns. He was 8. During his three years in the Army he worked composing responses to Congressional Inquiries. Now he has a monthly business paper of his own, several blogs on a variety of subjects and a graphic design and print shop. His passions are his family, free markets, free people and the truth. |
Ford Motor Company was founded in 1903, General Motors in 1908 and Chrysler in 1925. Millions of people now depend on these companies for their livelihood, which is why Congress will eventually approve a bail out package, bridge loan, rescue plan, or whatever we're calling it this week. It's true that our economy will be much better off if more of the things that Americans buy and use are built in the United States. But creating that scenario artificially is not a solution. It's a cover up.
What Congress should be looking at is why, in almost 100 years, hasn't a fourth or fifth or sixth or twentieth successful major automobile company thrived in this country? With the degree of automation in manufacturing today, it can't simply be labor cost. The legacy costs of the Big 3 are a problem. That is, the pay and benefits they've already agreed to pay to retirees, but new companies don't face that problem.
The real issue is that government has micromanaged the automobile manufacturing industry into extinction. Every time a new safety feature is mandated, emission standard is raised, milage requirements hiked, it not only raises costs for existing and would be manufacturers, it takes resources away from innovations that, believe it or not, may never have crossed the minds of the sages on Capital Hill. The volumes of regulations and compliance manuals alone would be enough to scare any newcomers away from the market. Detroit doesn't feel threatened by any new innovations coming out of Silicon Valley because they know they'll never be able to navigate the regulatory swamp, unless they sell-out to one of them. After all, they helped create it.
If this economy is going to be saved, the government has to be proactive in doing less, not more. They have to find the bottlenecks and unblock them. Access to credit wouldn't be as big a problem if it didn't take 10's of millions of dollars to put your first car on the road.
If we don't free up the imagination and ambition of American entrepreneurs by getting out their way, we're going to continue to be the world's currency provider. We'll print it here, back it with our debt and ship it overseas in exchange for all the things it no longer pays for us to produce ourselves.
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