Auto Company Bailouts II: Should Congress Agree to Auto Company Bailouts?

Part II: Zombie Economics

Credit goes to Butler Shaffer for inventing this new term. Zombie Economics is the government’s current practice of trying to restore life to dying corporate forms.

Look at this list below. The first item shown is an old technology, the second item is the new technology that replaced it, then its impact on humans.

Human labor to machinization, driving down the cost of all machine-made goods

Swords to firearms, making killing easier at a greater distance

Buttons to zippers, making garments easier to wear

Buggies to automobiles, forever changing transportation

Scythes to threshing machines, increasing crop yields and lowering food costs

Horse-drawn wagons to railroads, lowering shipping times and cargo costs

Honest banking to fractional reserve banking, destroying the national currency

Whale oil to petroleum, ruining the whale harvesting and oil lamp industries

Candles to electric lights, ruining the candle and whale oil industries

Written letters to telegraph, revolutionizing communications across distance

Telegraph to telephones, another communications revolution

Stage performances to radio, revolutionizing entertainment

Radio to television, revolutionizing visual media

Carbon paper to copiers, revolution in making copies

Regular mail to email, revolution in personal communication

Victrolas to vinyl records to cassettes to CDs to MP3s, multiple obsolescence issues

Newspapers to Internet, publishers all over the world closing their doors

Neighborhood stores to Internet commerce, changing buying habits forever

75 automobile manufacturers to 3. In 1912 there were 75 automakers in the USA. Today there are only three dying companies remaining. Yet, there are dozens of automakers around the world that are still viable, profitable enterprises.

In each instance, there was a leading technology made obsolete by an emerging technology. Yet, the companies that produced the old technologies went out of business by the thousands. Some of those “sunset” companies embraced the new technologies and continued doing business.

This is the way of the free market throughout human history. But today in America, politicians want to control the free market by providing government assistance to businesses that refuse to compete in the marketplace. Politicians cannot stand the idea that some voters might lose and others might gain. When you’re a politician, free markets and natural law are only obstacles to overcome.

Dying corporations in the United States should be allowed to close their doors. Or, they should reorganize under the federal bankruptcy laws.

Economist Murray Rothbard is quoted: “It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”

Mark Twain, gleaning material from the Book of Proverbs, said: “It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt.”

There can be no doubt of the ignorance of American Congress, the present Administration or the President-Elect. All are in favor of Zombie Economics.

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