That’s the net worth of the once great General Motors if you count their contractual pension obligations going forward (and why wouldn’t you?). Recently, out of a real business necessity, they’re pursuing cash flow at the expense of profits to the tune of about $1,200 cost (borrowed) each time they sell a vehicle.
Know what? I really don’t care if GM–or any other once-great American company, for that matter–goes under. Sell it off for scrap, for all I care. Do you know what else? The prospect of tens of thousands of GM employees and retirees losing their pensions and medical benefits fills me with a strange sense of satisfaction. Oh, not because I don’t want them to prosper. I do. I want everyone to prosper beyond their wildest dreams–but only in a manner that reflects reality and the natural order of things. It’s kind of like Lottery stories: they hold no interest with me whatsoever; and when I hear that some former winner is broke, again, I’m neither surprised nor saddened.
GM stockholders, directors, officers, and employees have been ignoring reality for decades. Employees got pitched a deal that for monthly dues to a union organization, they could make GM pay them more than the worth of their production. Everyone bit, of course. What do they know?
I guess my problem is that I really don’t want to point my finger, laugh, and mock the employees for what I said would happen from the moment I began to understand business dynamics and economics. Downing a whiskey a bit earlier, I reflected that my feeling in this regard was akin to watching a child burn his fingers on a hot stove he’d been admonished not to touch over and over. Be honest. Do you not feel some satisfaction when that child, screaming in pain and horror, is afforded such an important lesson at so low a cost? And how efficient. You could admonish "hot: don’t touch" for a decade and it won’t begin to contain the influence of that micro-second touch.
But children also have a good and reasonable excuse: they’re children; ignorant in most things.
While GM employees don’t have that excuse, I find it hard to lay too much blame at their doorstep. I lay it squarely at the doorstep of a generations-worth of worthless, spineless, unprincipled, quarter-end-bottom-line directors and executives who refused to stand up to the theft that was being perpetuated by the union, backed by the federal government. If anyone had the wherewithal to pull an Atlas Shrugged, they did. Now it’s too late.
The UAW, the whole labor-union
movement, and the left-“liberal” intellectual establishment, which is
their father and mother, are responsible for foisting on the public and
on the average working man and woman a fantasy land of imaginary Demons
(big business and the rich) and of saintly Good Fairies (politicians,
government officials, and union leaders). In this fantasy-land, the
Good Fairies supposedly have the power to wring unlimited free benefits
from the Demons.
Without the UAW and its
fantasy-land mentality, autoworkers would have been motivated to save
out of wages actually paid to them, and to provide for their future by
means of by and large reasonable investments of those savings—
investments with some measure of diversification. Instead, like small
children, lured by the prospect of free candy from a stranger, they
have been led to a very bad end. They thought they would receive
endless free golden eggs from a goose they were doing everything
possible to maim and finally kill, and now they’re about to learn that
the eggs just aren’t there.
very sad to watch an innocent human being suffer. It’s dreadful to
contemplate anyone’s life being ruined. It’s dreadful to contemplate
even an imbecile’s falling off a cliff or down a well. But the union
members, their union leaders, the politicians who catered to them, the
journalists, the writers, and the professors who provided the
intellectual and cultural environment in which this calamity could take
place—none of them were imbeciles. They all could have and should have
What is happening is cruel justice,
imposed by a reality that willfully ignorant people thought they could
choose to ignore as long as it suited them: the reality that prosperity
comes from the making of goods, not the making of work; that it comes
from the doing of work, not from the shirking of it; that it comes from
machines and methods of production that save labor, not the combating
of those machines and methods; that it comes from the earning and
reinvestment of profits not from seizure of those profits for the
benefit of idlers, who do all they can to prevent the profits from
being earned in the first place.
That’s just a small taste. Go read George Reisman’s complete article.