Milton Friedman - GM Auto Bailout

Milton Friedman explains the necessity in a free market system of allowing unsuccessful businesses to go bankrupt w/out the government bailing them out. Profit/Loss system where the consumer decides who wins, NOT the federal government.

The same misguided arguments for a government bailout of GM made 30 years ago are being made today by President Barack Obama and the other statists in congress.

I hope there are more people out there as concerned as I am about this Administration's assault on the free market. We need more Milton Friedmans in public policy today making the case for free enterprise and forcfully advocating on behalf of the market. We need more voices sounding the alarm about the ever-increasing attacks on our nation's creators of wealth--small business.

The barons of big government in Washington are replacing our nation's history of free-market capitalism with Crony Capitalism, where success depends not on your ability to produce a product the consumer wants to buy, but on how many lobbyists you have in Washington to force taxpayers to subsidize your company.

I agree with Milton Friedman 100 percent that government bailouts are an abomination and a disgrace.

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[spader49]

I'd like to see more videos like this where obama is contrasted with Friedman.

[PenguinProseMedia]

@spader49

With Obama's economic illiteracy, this is just scratching the surface. Any particular issue you'd like to see Obama/Friedman contrast?

[alc99]

Milton was right then and Obama is wrong now. Obama has not only sustained a poorly run business but also taught many other large American companies that they can still be run poorly but will get bailed out if well connected politically.

[zippywebgenie]

@JP2times2007 If GM had been allowed to declare bankruptcy, that would make the existing contracts null and void. They could start over either as non-union or renegotiating the contract for union workers. The company would not have disappeared.

[Deltrix4762]

0:52 well what if the only way to manage companies effectively is bad business? what do you do then?

[alc99]

@dtorfleming It's great that GM has survived but they should be getting their own financing or people like yourself can rescue them. Taxpayer bailouts only serve to teach companies they need more lobbyists than good business people. And BTW, GM stock is now worth a fraction ($24) of what you paid for it ($33).

[PenguinProseMedia]

@dtorfleming Detroit auto workers are not entitled to a job. If GM can't employ land labor and capital productively and produce goods consumers want to buy, what good are those jobs and the "value" they produce for stockholders? And you forgot about the one group that drives an economy - the consumers. Profits signal that companies are producing what consumers want and value. GM faced bankruptcy because consumers didn't value what they were producing. End of story.

[dtorfleming]

@alc99

Except that GM is now doing quite well and employs over 200,000 people. The government made a profit on the deal, the shareholders are doing great and the employees are happy. What a terrible result.

[BillyThorton68]

One word  "UNIONS"

[stddgv11]

The main problem with libertarian / pure capitalism is that it just does not work in the real world. It's just some nutty fantasy world they want to live in. The same goes for those fruiloops that want extreme socialism.

The best system is a combination of both. Where corporations/capitalism is the driving economic force with government used to regulate and protect the citizenry from the abuses of unfettered capitalism.

I'm mystified why that is such a hard concept to comprehend.

[stddgv11]

There are a ton of arguable reasons to dislike Obama's financial decisions made thus far. The auto bailouts, however are not one of them. No matter how you look at it, the "auto bailouts" were an astoumding success.

Countless numbers of jobs were saved at a time when Americans needed them the most. These companies were not taken over by the government, they were given loans which have almost completely been paid back to the American people.

The auto ind. have started to make record profits.

[halflifeproductionz]

a system where some win and a lot lose is a stupid system. friedman is an idiot! what's wrong with everyone gaining capital either through private enterpise or government.

[82airbornesoldier]

its irrelevant if government bailouts "work" or "dont work". When the government FORCIBLY deprives citizens of their property via taxation, and gives that money to others to whom it does not belong, it is theft. Plain and simple ...

[gamevirus01]

Milton for President lol