Quote:
Originally Posted by aceventura3
Here is where I get honestly confused. I am not sure if some really don't see it or if they simply try to protect their ideology or the irrational actions of some government officials.
*GM is a failed auto company. One reason is in their failure to recognize the need and their lack of ability to produce fuel efficient green vehicles that people actually want to buy.
*Obama bails-out GM. GM is a failed company propped up by tax payers.
*Obama talks about the new green economy as the future. Obama and Congress, in their wisdom, think they know the winners in this new emerging green economy.
*Tulsa Motors, a start up green company making electric vehicles. Has to compete with GM an old smoke stack company in the auto industry. Tulsa makes and sells electric vehicles, the type I might actually buy.
*The founder of Tulsa Motors used his own personal funds to start the company, a company that will compete with a government subsidized company like GM.
*Our tax policy taxes the founder of Tulsa Motors on virtually every dollar of income he saved before he could invest. And Obama would have taxed him more, and more, and more - perhaps to the point where the founder of Tulsa Motors would not have started his company.
*Tulsa Motors is located in California but incorporated in Delaware, why? Because that action would be less punitive. The founder is actually South African - he could have made that country his home base. If tax rates get too high, he might just do that. Taking jobs, technology, his tax base, income and consumption with him.
*In 2009 Mercedes, a German company, invests in Tulsa Motors, and now owns 10%. Tulsa Motors was founded in 2003.
* Also in 2009 Tulsa Motors became profitable. A group of Abu Dhabi investor acquired a stake in the company, and the US decided to give the company a low interest loan.
What if there was no government interference? How many Tulsa Motors don't exist because they can not compete or get funding due to our government picking winners and losers? How many Tulsa Motors are based in different countries because of our current anti-business environment?
Rhetorical questions certainly. I fully expect a few flip responses. But, the problem is this stuff is real and for every flip response I can come back with solid real word examples. Supply side is real, it works.
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That assumes that Tulsa Motors would have been able to just wander in and fill the void left behind by the big auto companies and continue to thrive despite a massive collapse in our economy. They are still free to carve a place for themselves and if done right they will reap the rewards of the hard work they put into the company. The government bail outs where an extraordinary solution to an extraordinary problem, hardly punishment for success.
I agree that we can't keep subsidising failed companies but if there is nobody poised to fill in the hole and keep a massive sector of our economy functioning then we have to deal with that reality.