I’ve been pondering this question over the last few weeks… Financial companies and insurance behemoths who got the first round of bailout monies were all politically connected (through Hank Paulsen, Barnie Frank, etc.) and significant Congressional donors.
The Big 3, likely to get some ginormous amounts of money from the Feds, are shackled to Organized Labor interests who would suffer almost immeasurably if any one of them were to fail. Since organized labor can easily rent the majority in Congress from time to time, the money will no doubt come through.
The phrase “too big to fail” has been tossed about from time to time over the last sixth months in describing decisions to save this firm or that, but I can’t help but wonder, what would happen if Wal-Mart came to town looking for a bailout, bridge loan, or other manner of Federal Favor? It’s the world’s biggest retailer and also the biggest employer with over 2 million full- and part-time workers worldwide including over 1.4 million in the U.S. The company operates roughly 4,200 stores in the United States.
My gut tells me they would be out in the cold without so much as a pair of mittens. And yet, think of how many jobs Wal-Mart either directly creates or influences through their network of stores, distribution centers, manufacturers, and vendors… Pretty significant, and yet you’ll agree that since Wal-Mart has resisted the efforts of organized labor, Congressional Democrats would likely laugh Arkansas-based firm out the front door.
Thankfully, the Walton’s aren’t likely to need any federal intervention any time soon, but ask yourself why that’s the case? As a fiercely independent organization, Wal-Mart has refused to cow to the unreasonable demands of Big Labor, Big Environment, or Big Government; the company simply does what’s best for the bottom line, what’s best for the customers, and what’s best for their employees within reasonable budget realities. Whereas Detroit allowed outside influencers to force them into making business decisions that were never in their best interest, and consequently, here we are with the firms needing massive cash contributions to continue operating.
Now, before anyone gets the bright idea that I want General Motors filing for Chapter 11 or worse, consider my longtime support for the domestic auto industry and the critical importance of its long-term success…