Efficient Destruction

Megan McArdle argues against bailing out the auto industry:

At its heart, economics is not about money; it is about resources. Every dollar sent to Detroit buys a yard of steel, a reel of copper wire, an hour of labor that now cannot be consumed by a business that actually produces a profitable, desireable product. It's not right to strangle those businesses in order to steal some air for the dying giants of an earlier day.

The US auto industry is simply not satisfying the American consumer. People are freely choosing to buy better quality cars from German and Japanese companies.

The solution? The US auto industry wants to forcefully take money away from consumers to prop up factories and to pay for products that Americans do not want. This is economic madness.

America would be better off if it let bad businesses die.