The bailout II

Why we can't be efficient?

Japan went through 10 stimulus packages in the 1990s spending even more than we have. The 1990s were the dark decade for Japan. Why are we doing the same thing?

Can a government entity spend money efficiently? At the local level... potentially. But as you travel up through the level of government the lawmakers are further and further removed from the specifics of how the money should be applied to get the best benefit. In reality they are just throwing money at the situation.

The following are two truths that may not yet be apparent:

1. Some of the companies that we distribute tax payer dollars to will STILL fail.
2. Some of the companies that we distribute tax payer dollars to will claim to be failing to extort more money.

So why spend the money? Our legal/business system has Chapter 11 to allow the company to reorganize. Why won't we let process do what it is designed to do?

How do we know what we are doing actually helps? What if it really costs us more to prolong the life span of inefficient and corrupt organizations?

If you were to let GM fail then they could renegotiate their contracts and pensions.

The reason American car companies are inefficient is the union and poor management. There was a time when unions were good. They fought for the work place to be safe. They fought for fair compensation. They fought for a sane work week. But what happens when they achieve all these things? Now you are left with an organization without purpose. The workers continued to pay dues and started to wonder 'what am I getting for my dues'. So the union battles for even more compensation and benefits. The get these using the same tactics, slow downs and strikes, that inject inefficiency into the work place to reduce profit. They come up with job site rules about who can do what and when. All this injects inefficiency into the business. At this point they become a parasite living off the host, controlling it. How can a business move quickly to cut losses when they have a union rep in their ear saying 'remember the contract is renegotiated next year'. The thing is is most of what the union was founded to do is now legislated. 40 hour work weeks, overtime pay, safety, and other issues are all controlled by the government.

I'm scratching my head trying to figure out how a company can survive when the workers are part of an organization whose goal is to make the company inefficient.