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The problem with free market economics? Well–other than it rewards the kind of unbridled greed that has led to the mortgage crisis and a global financial melt down–it can sometimes create the sort of inertia and status quo that we have seen in the American auto industry. Why have the American carmakers failed to produce a shiny fleet of hybrids and a successor to the internal combustion engine? Because there was no percentage in it. It is easier and more lucrative to load truck-based behemoths with leather, dvd players and more cup holders. But now that they are in the crapper, a guy like Obama can put their feet to the fire with the stroke of a pen. It took the excesses of the free market to make a government-subsidized auto industry agree to move into the 21st century. Of course, the government could have influenced the free market to freely make these changes. All they had to do is tax gasoline at the rate the Europeans have done for years. Then demand for economical hybrids, etc. would have deftly forced industry’s hand. Which, of course, is the problem with government.  All these elected officials that want to get re-elected.

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One Comment

  1. Of course the true reward for unbridled greed is unbridled failure which the free market has been trying to give us. What you are describing is called “moral hazard” which is what we get when “your precious” interferes. The market still wins, there is just a greater penalty accessed down the road.

    As far as the cars go, I think they should definitely be called Obamamobile’s. I am sure the one pictured above will give the Lada some stiff competition.


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