Blackberry Storms on Capitol Hill & Big Government Mentality
Wow! Feels good to be posting again! I hope you can excuse my recent absence and even if you can’t now I think once you finish reading another dose of my common sense awesomeness you” be singing a different tune!!!
A friend shared an blog post with me via GoogleReader from Gizmodo (“The Gadget Blog”) titled “Washington Whining Politicians Smash BlackBerry Storm” (@ http://i.gizmodo.com/5165511/washington-whining-politicians-smash-blackberry-storm) which referenced a story on the Politico website (@ http://www.politico.com/news/stories/0309/19693.html). Gizmodo and Politico talked about the problems that people working on Capitol Hill were having with the new Blackberry Storm. However, what I found most amusing and inspiring (for me to write this blog post) was the amazed attitude the people at Gizmodo expressed finishing their post off with these words:
“Things are so “bad” there that the House administrative office is setting up a workshop on the Storm for people working there. Which brings up the question: Why in hell did they ditch their old phones to get a fancy piece of crap that has been smashed by reviews before? And these are the guys who have our future in their hands.”
Funny stuff but my simple answer to the above question at the end of that piece is – this is a classic example of the way big government operates. The government figures that with government backing and government putting money into something that should by all accounts fail due to its rejection by the market the government will be ensuring what they perceive to be important sectors of the economy do not go under. I guess that would be the people who manufacture parts for the BB Storm and the people who have been hired to teach classes on how to use the BB Storm and maybe those third party companies and retailers who manufacture and sell aftermarket BB Storm cases, covers, belt clips and the like. (To be clear I do not believe that the government is keeping their BB Storms because they are actually trying to prop it up in the marketplace I am just using the example because it is what spurned my thoughts towards what I am going to discuss below)
This is what the government does on a regular basis and what it is doing with its propping up of the auto industry for instance. Ya, I totally agree that it will SUCK for all the people in all the areas of the economy that will be affected by the Big 3 automakers going under but there are reasons the companies are failing and by propping them up you don’t do anyone a service you just encourage the thought process of – well we can do whatever we want even if it makes no business sense because the government will save us! There is a reason that Toyota, Honda, and Mazda and other non-North American companies aren’t going to fail if they don’t get government bailouts. (Full disclosure: Recently there has been news that these foreign automakers have asked for loans from their governments or are going to ask for loans to help them finance cars to their customers because due to the credit crunch it is very difficult to get credit on car buying. The companies don’t NEED the loan to stay solvent, however, which is the huge key to the difference between them and the Detroit Big 3. As well, the money they are asking for from their government – Toyota asked for $2 BILLION – PALES in comparison to what GM and Chrysler have already been loaned to stay afloat – $17.4 BILLION – and are now requesting again also to stay afloat – $21.6 BILLION (which makes a grand total of $39 BILLION!!!).
I stand by the belief that in the long run it will be better to let these companies die off or merge rather than prop them up as individuals. Part of the reason they are in such financial strife is because of their insane deals with the U.A.W. (United Auto Workers) who still refuse to accept any of the blame for the current financial crisis hitting the Detroit Auto Manufacturers. They also are completely lacking a willingness to renegotiate some of the more expensive parts of their contracts which will go a long way to helping the ailing auto makers (and went a long way to putting Chrysler and GM in their current unenviable positions). The U.A.W. is, rather, appealing for support from other unions around the USA in their cause to not give up any of their gold-plated benefits!!! http://www.nytimes.com/2009/03/06/business/06labor.html
Propping up a failing or failed business/industry is bad in the long term for the economy. Think of it like this, if in the first decade of the 20th Century livery stable owners, horse trainers/breeders, stable hands, buggy manufacturers and the myriad of people and businesses associated with the use of the horse as a method of transport and freight had come to Congress and asked for a bailout because their business/industry was in a rapid decline since the automobile had become much more affordable for the middle class (through, but not solely because of, the invention of the assembly line by Henry Ford and the drop in the price of gasoline at the end of the 19th Century). Should Congress have propped them up? Of course not! If they had we would probably still be propping up that industry today because we still do not need horses for those purposes as we did before the car became affordable. It stinks but those people working in those sectors pretty much all had to adapt and/or find new lines of work – and they did because there was a growing call for mechanics, auto factory workers, and other things associated with the then growing auto industry.
Now before you ask the question I will answer that yes, I am well aware that there is no known burgeoning sector of the economy right now for people laid off en masse from a bankrupt auto manufacturing plant or auto parts manufacturing plant to go out and get jobs. However, we should not be artificially controlling the market in ways that do not allow companies that deserve to join the ash heap of history join the ash heap of history. Maybe on of those people who is laid off will find the time to think of some awesome new manufacturing/factory operation method in their free time and become the next Henry Ford (but hopefully not as anti-Semitic!). Or maybe there are some people who have ideas for new inventions or improvements on current inventions that will end up revolutionizing a market sector. Maybe they already have these idea but they don’t have the time to go ahead and build that new device or they don’t want to take the risk starting their own company because it would require their leaving of their secure union job at the auto plant.
A wise person once said, “Necessity is the mother of all invention”. Now, to be clear, I do not by any means say with certainty that there are auto workers or people employed in orbit around one of the failing auto manufacturers who has or will have an idea that will bring a new exciting concept or invention to our world to revolutionize it. HOWEVER, the American economy has reinvented itself time and time again and has shifted its focus on one sector to another to another over the decades. In the 1970s and 1980s everyone predicted Japan would quickly become the world economic superpower. The idea in the previous statement today is laughable when we look back at those silly people who made those predictions in the in the final decades of the 20th Century. The American economy adapted and transformed and became stronger as Japan’s asset bubble at the base of their economy burst in 1990. Today, the predictions are all about the impending rise of China as the global economic superpower by 2025 and India early on in the latter half of the 21st Century. If the government does not attempt to prop up these corporate failures and instead allows them to go their natural course, whatever it may be, they will also be allowing the economy to once again dynamically transform itself to meet the growing needs of the future.
But that’s just my $0.02, as always your comments are appreciated!