In a resent poll 54% of Irish voters said they would now vote in favour of the Lisbon Treaty, against 24% who said they would vote against. Might we actually get a new and sort-of proper Treaty in the EU soon? I dear not be confident but there's hope.
Tuesday 2 June 2009
Monday 1 June 2009
Goodbye General Motors, welcome Government Motors
General Motors is bankrupt and will be restructured with new ownership within the next three months international media reports. The new company will be owned by the old's creditors, unions and, wait for it, 60% by the US Government.
I'm glad GM finally went bankrupt. The company was unable to reinvent itself and its production line in accord with consumer trends, higher gas prices and the financial crisis and had as such no longer a right to survive in a capitalist society. With the American Government allowing the old GM to go bankrupt they send a clear signal to other car makers that unless they restructure and find their place in today's economy they as well might go bankrupt. Also, the new GM, trimmed down without many of its daughter companies, such as the European SAAB, Opel and Vauxhall and American Hummer, might emerge as an example of the lessons learned from the last years; focus on your core activity and understand that the old way is not necessarily the best way today. The downfall of GM might prove an excellent example of what Schumpeter described as creative destruction, that the innovation of some entrepreneurs, although driving the economy forward, in this case by producing more fuel efficient cars and having leaner business organisations, can destroy old and otherwise seemingly profitable companies. I believe GM's fall may prove to be a major step towards a cleaner, leaner and more efficient automobile industry.
I opened the last paragraph by stating that I am glad GM went bankrupt. This I stand by. Nevertheless, tens of thousand workers may, and probably will, loose their jobs because of the bankruptcy. Additional tens and tens of thousands of family members, people employed by GM's sub-contractors and so on will also be affected by this. Let us not forget that for these people GM's fall is not a good thing. Most of these people were highly qualified workers in a field in rapid change and they will need help and incentives to get back into the work market. Some of them will hopefully start their own businesses, and we need business- and employment laws that helps them along. Others need training and re-education and it is in society's interest that they get this. Not because we should be nice to these people, but because in the long run it is better to pay for their training and get them back as workers than to have them on unemployment schemes for a prolonged period.
A second point worth looking at is the Government's position. They will own 60% of the company. The Government used taxpayer's money to help GM and this is money the Government should ensure that they get back. After having helped GM back on its feet the Government should sell its shares an use the money for public goods, such as schooling and health care. However, the Government should not wait until GM is the world's biggest car producer again. They should sell as soon as possible.
But once again, GM went bankrupt because they were unable to adjust. This is Capitalism 101. Therefore I am glad they went bankrupt.
I'm glad GM finally went bankrupt. The company was unable to reinvent itself and its production line in accord with consumer trends, higher gas prices and the financial crisis and had as such no longer a right to survive in a capitalist society. With the American Government allowing the old GM to go bankrupt they send a clear signal to other car makers that unless they restructure and find their place in today's economy they as well might go bankrupt. Also, the new GM, trimmed down without many of its daughter companies, such as the European SAAB, Opel and Vauxhall and American Hummer, might emerge as an example of the lessons learned from the last years; focus on your core activity and understand that the old way is not necessarily the best way today. The downfall of GM might prove an excellent example of what Schumpeter described as creative destruction, that the innovation of some entrepreneurs, although driving the economy forward, in this case by producing more fuel efficient cars and having leaner business organisations, can destroy old and otherwise seemingly profitable companies. I believe GM's fall may prove to be a major step towards a cleaner, leaner and more efficient automobile industry.
I opened the last paragraph by stating that I am glad GM went bankrupt. This I stand by. Nevertheless, tens of thousand workers may, and probably will, loose their jobs because of the bankruptcy. Additional tens and tens of thousands of family members, people employed by GM's sub-contractors and so on will also be affected by this. Let us not forget that for these people GM's fall is not a good thing. Most of these people were highly qualified workers in a field in rapid change and they will need help and incentives to get back into the work market. Some of them will hopefully start their own businesses, and we need business- and employment laws that helps them along. Others need training and re-education and it is in society's interest that they get this. Not because we should be nice to these people, but because in the long run it is better to pay for their training and get them back as workers than to have them on unemployment schemes for a prolonged period.
A second point worth looking at is the Government's position. They will own 60% of the company. The Government used taxpayer's money to help GM and this is money the Government should ensure that they get back. After having helped GM back on its feet the Government should sell its shares an use the money for public goods, such as schooling and health care. However, the Government should not wait until GM is the world's biggest car producer again. They should sell as soon as possible.
But once again, GM went bankrupt because they were unable to adjust. This is Capitalism 101. Therefore I am glad they went bankrupt.
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