Free Markets, Free People
Dan Neil, an LA Times entertainment writer, takes this lesson from the GM bankruptcy:
The final chapter of that merger plays out this week as GM weathers a reorganization that will leave the federal government owning 70% of the company. In the midst of the deepest recession since the 1930s, it’s hard not to see GM’s bankruptcy as a signal moment in a larger history. If mighty GM can fail, cannot also the United States? And the answer is, absolutely.
This is the lesson of GM’s bankruptcy, and it has little to do with market share and miles per gallon. It’s a rebuff of the notion of exceptionalism. Any organization that fails to sufficiently safeguard its means of self-correction and reform, that forsakes long-term investment for short-term gain, that piles up debt year after year, will eventually fail, no matter how grand its history or noble its purpose. If you don’t feel the tingle of national mortality in all this, you’re not paying attention.
While I essentially agree with the thrust of his point, I don’t think the term “exceptionalism” as it is used when speaking of America, has anything to do with flouting the laws of economics. They are called “laws” for a reason, and no one has yet to find an “exception” to them. We have, however, discovered over and over again that attempts to make exceptions to them fail miserably.
The exceptionalism most speak of when they use the term in conjunction with America has to do with law, ethics and philosophy of life – the foundations of the country that make it exceptional. But economics? Of course we can “fail” if we do the stupid things we’re doing. And, unfortunately, we seem bound and determined right now to prove that point. But that has nothing to do with our “exceptionalism”.