Do Not Resuscitate

 

If you think this country is the only one who is bailing out failing companies, think again. Today China announced billions of dollars in bail out corporate handouts as they too jump on the bail out band wagon.

What ever happened to the simple days of Capitalism where supply and demand dictated whether a company succeeded or failed?

Anyone remember Woolworths, Korvettes, Crazy Eddies, Rickles, Pergaments? Etc,etc,etc.

These were all companies who could no longer meet the demands of consumers, so they went belly up. Nothing wrong with that. We as consumers look for two things when purchasing a good or service, price and value. This is the way it has been since the first automobile rolled off the assembly lines, and it is still the same today as the latest cell phones hit the market. NOTHING HAS CHANGED.

But companies don’t get this. Often driven by greed, over marketing, or market monopoly tends to backfire and drive them to the ground.

For a company or enterprise to thrive and succeed they must follow a simple formula. Identify the consumers need, supply that need with a good quality product or service at an affordable price and be a visionary, anticipate future problems and prepare for those problems so that when they arise, you can continue to offer your goods or services and overcome those problems.Be flexible. Its called “Providing Services 101”. Nothing complicated.

Lets take a look at our automobile market for example. GMC, Ford, and Chrysler are all struggling, discussing mergers, laying off workers, shutting down plants, and there are  whispers of bankruptcy.

Do we really need an SUV with multiple configurations, sizes, and extras during a gas crisis? Ask Hummer, who took their first Hummer off the market because of dropping sales, and is on the verge of closing down completely. Sure there is a market out there made up of jocks and pimps who need to feel macho by driving a vehicle which was intended for off-road driving (i.e. dirt roads, rocky terrain, and filming while chasing a pack of heinas  in Africa) on the highways and local streets of America.  But you don’t need to over saturate this market with multiple SUV’s. Make one good one, and stick with it. GMC has the Tahoe, Escalde and Denali which are in principle the same vehicle with different tags, bells and whistles. And that goes also for Ford and Chrysler. The Japs and Germans do it too but this topic is about America.

When a company over-expands to meet or over take a competitor or ignite a part of our consciousness which they think says “hmmm an Escalade with built in GPS and a restaurant finder, I really need that” they begin to tap into a market which exists at most in the lower 1%. When this lower percent’s needs are met, they continue to expand within this market, re-invent the wheel, and they forget all about the rest of the market which wants to keep it simple during a struggling economy. By the time they realize this, its too late, and they have to cut back. Unfortunately, those cut backs translate to lost jobs, for employers they didn’t need to hire in the first place if they had just stuck to the KISS (Keep It Simple Stupid) principle.

I realize also that there are other mitigating circumstances such as health care costs and retirement which companies have to flip the bill for, but much of this can be alleviated through a re-structuring of our tax code and other Social Security investment options which Democrats oppose.

But a word to corporate America, PROVIDE WHAT WE NEED AND NOT WHAT YOU THINK WE NEED.

If you don’t? Then we will force you to conform to our needs and not yours, by not using our hard earned dollars to keep you alive in the game of monopoly. Ask Bill Gates. But, that’s another story ill get into another day.

It might seem doom and gloom when we watch the news and hear about closings, layoffs, acquisitions, and market drops, but in the end its all for the better. A forest from time to time deeds to burn down completely to re-growth with fresh brush. A smaller market, fewer companies and corporations means that we, the public will have a better quality of products and services to choose from instead of the watered down multi options available. This also stabilizes the market.

Yes, I know in some cases we need competition to drive prizes down and prevent monopolizing, but when this occurs, WE the people decide who we want, and those we don’t will just perish and not be kept alive through government intervention through bail outs.  Bail outs only make “big brother” bigger, and our tax bank smaller.

Companies like Freddie Mac and Fannie Mae, who were created as a  secondary market during the great depression, to encourage greater use of the innovative long-term, fixed-rate, level-payment mortgages, grew beyond their original intent when they were privatized, their shares were sold to the public, and as a need to keep the share holders happy through growth and revenue, they drastically lowered their loan qualifying standards. So now, because of those irresponsible for getting into mortgages beyond their reasonable expectations of meeting, many will suffer.

But fear not, BIG BROTHER to the rescue.

If companies are on the verge of folding, closing, liquidating, merging, etc. Let them. Lets get back to basic supply and demand economics.

When the weak die, only the strong remain, better for everyone. Our Government needs a “Do Not Resuscitate With Our Takes” bill introduced in Congress. And We need it now. JP