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Letter: Auto bailout is faith in fallacy

December 30, 2008

Dear Editor,

American business once thrived on free market principles. Key among those is that market forces drive out inefficient, unprofitable businesses in order to make way for the capable, profitable firms. If a business wants a second chance, it is possible under the protection of Chapter 11 bankruptcy.

This procedure forces companies to vet a restructuring plan through the courts and compels them, by law, to adhere to it.

Currently, America ignores free market principles, and unprofitable companies remain in business with taxpayer "bailouts." Our government encourages this practice by obfuscating reality, claiming that the American auto industry is "too big to fail."

This is simply not true.

Were the airlines "too big to fail?" They successfully navigated through Chapter 11 proceedings. So did Donald Trump, and he is a universal symbol of American business acumen.

Are the average Americans who seek protection under bankruptcy too insignificant to be afforded the same leeway as big corporations? Why should our citizens adhere to the laws of our courts if the biggest corporations are immune?

It is time we faced the truth about our auto industry: It is inefficient and it lacks the level of innovation demonstrated by foreign firms.

If it is to become profitable once more, then the auto industry needs a complete overhaul, one that is under the oversight of a bankruptcy judge.

Unfortunately, our decrepit auto industry will continue to operate with more than $13 billion of our tax money - until their CEOs squander it and come begging to Washington, once more.

Joe BaylessDanville

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