Out of Control Policy Blog

Promoting Businesses vs Employers

One of the biggest arguments for nationalizing struggling businesses or bailing them out is that it "saves" jobs. When it comes to GM and Chrysler, the government has been trying to avoid bankruptcy because it would mean more job losses. But the question becomes, is GM a business or an employer?

If its just an employment firm, then eventually it will fail. That isn't sustainable--unless you fleece the taxpayers for enough money to make it work.

GM can only survive as a business, which means making business decisions, and working to make money. If you don't make money, you don't survive. Simple as that. GM doesn't have to be a massive firm that employs thousands to make money. Consider Fiat, who's enterprising CEO Sergio Marchionne said recently,

"I made 2.2 million cars last year and made [$1.3 billion], more than GM with 8 million car sales. Size is important if done well... If you're doing it for ego, that's worth nothing."

Often times it seems like governments are just big employment centers, creating jobs just for people to have them, not actually adding any value to society.

GM has to be a business. A profit seeking, wealth producing, money making business. And in the process they will be an employer.

Anthony Randazzo is Director of Economic Research


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