GM and Chrysler should be allowed to die

Businesses come and go. Which ones survive in a free-market model (such is the direction the U.S. is currently skewed) is determined by whether they are able to deliver profits to their shareholders. For some time now, GM and Chrysler have not been able to do this. Ford, the third of the so-called Big Three automakers, has been able to pull itself up by the bootstraps and limp along while it's adjusted business model and product offerings heal its balance sheet.

The fact that GM and Chrysler are continuing to have a tough go at it is reflected in their announcement that they need still more money from the government to maintain operations (they are asking for tens of billions more, in addition to the 15-odd billion they got a couple months ago). Ford says it is fine for the rest of 2009. Economic Darwinism, or survival of the fittest in a business sense, mandates that GM and Chrysler either be dissolved, sold, or allowed to die.

Yes, there will be some pain if Chrysler and GM go away; ebbs and flows, pain and ecstasy, are inherent parts of an economy that is left free to grow naturally, without government intervention. The survival and health of Ford and foreign automakers should soften the blow, though.

The only other alternative is likely government control of the auto industry. Though they are asking for a loan, look at what is happening to banking. Surely, there are people in legislative power licking their chops at an opportunity for the government beauracracy to get its hooks in this new industry.

Government is notoriously bad at running businesses; there is ample evidence of this throughout history. Business and industry grows when allowed to select experts to direct their growth. Government has no such experts. Nationalization of the auto industry would mean greater pain in the long term than allowing two-thirds of the Big Three to come to their natural end.