Thursday, November 20, 2008

Should we bailout the auto industry?

During the Q&A time after a presentation I gave today, a number of people asked if we will/should bail out the auto industry. For brevity, I was unable to give the following sound answer.

I first cited Richard Nixon when hearing that a company was too big to fail responded, "Tell it to get smaller."

The estimates are slightly over 1 million US jobs are directly tied to the auto industry. Some say as much as 3 million when you count things like stores in auto manufacturing based areas. Yes, this is a serious issue. And yes, if the government does not bail them out, our economy will have some serious consequences. But this is not why I believe we should let them fail.

Instead I view the behavior of many large companies as emotionally unhealthy. Consequently, we need to view them in light of counseling principles.

Codependent people (those that live off of others) need an enabler to survive. And like any 4 year old, codependents constantly test any boundaries to see if the person is serious. When the enabler allows the codependent person to cross an established boundary, the codependent person instinctively pushes farther next time. This will continue until the codependent is forced to experience the full consequences for their own actions--sort of.

The sad truth is that when consistently negative behavior continually results in consistently tolerable results, behavior modification occurs. So if/when a first experience of negative consequences happens it is not viewed as a wake up call, but an anomaly. So they will try the negative behavior again. (i.e. Michael Milken, Savings and Loan, Long-Term Capital, etc.)

This is counseling/psychology 101. Sadly the lesson that good parents teach 4 year olds has escaped all of the most influential people in our capitalist and governmental structures. I know that bailing them out will only produce a bigger crisis later than whatever this one is now. I am not nearly as afraid of the pain today as I am of two times as much pain later.
Aaron