And then again, who pays attention?  The fact people don’t pay attention is why the proverbial wool keeps being pulled over society’s eyes.  But I digress, different rant, different time…

My issue isn’t about money being paid out in the rescue plans…  no, it’s how we’d gotten to the point where “too big to fail” actually existed, and how that issue is still causing grief on the US economy even after all the trillions handed out to financial institutions and other companies in the USA.

The issue is size. Go back to earlier in the decade and you had airline industries pleading for help as they slashed back and retooled their businesses while they were bleeding red regarding their finances.  Stock prices were down, amount of debt was up, etc, etc.  Why was the load so heavy?  You want to blame the unions?  Perhaps blame the white collar guys because of mismanagement?  Blame social conditions because they were absolutely craptastic after 9-11.  All of that plays into it in one part or another but really, that’s not the entirety of the problem.  No, the problem that led to the failures was the buying-out-the-competition of years prior that left the legacy carriers bloated and unable to sustain their own weight.  Part of it was the government turning a blind eye for the sake of letting business do their own thing while business was turning very anti-competitive with thanks to the big boys dominating everything.

Yes, competition still existed.  Yes, many of the smaller carriers simply failed while the bigger, stronger companies bought up their assets in order to strengthen themselves…  But they got too big.

Too big is too big.

You go to the US Auto Industry and you find the same problem — for decades, General Motors swallowed up competitors and added their name to their product line BUT simply sold clone cars that were also available under  different brand names.  Add their complacency that damned innovation in the name of profits and you had the makings of a fine mess.  Ford, Chrysler?  Just as guilty.  And no one in the government thought to break up any of these Big-Three in the name of capitalism.  “Where goes GM, so goes America” after all.

And too big was too big.  We’ve all seen it, GM’s come crashing down under the weight of their empire — bloated and endeared to profit before innovating.  In fact, the US auto industry has fought innovation more often than not — witness the documentary “Who Killed The Electric Car” for an example of this.  Hell, the aged “Unsafe at Any Speed” book by Ralph Nader is another example of this.

The US banking industry is the current example of this too.  The error that the government is playing into is that — in order to keep the financial industry from imploding in on itself, big must swallow big and get bigger in order to keep things afloat.  Trying to make things smaller — more nimble and adaptable – isn’t a consideration in all this mess.  Nope, profits are up, the Dow Jones is up and that means things must be getting better.

They’re not.  Because too big is too big.

This is not an attack on profit margins and all that jazz, it’s not an attack on capitalism…  This is a plea for sanity.  We’ve seen bubble-after-bubble in the market where an industry becomes extremely hot, everyone flocks to it, then the market explodes and those who are left are the ones who swallowed up as many of their rivals during the fallout…  Leaving massive, hulking companies that become “too big to fail” because of how it would hurt the economy and how it would hurt the worker or society in general.

The problem is, the companies are too big to stay solvent too.  Not without a sustianed market uptick.  If they do stay solvent?  They stagnate.  Why innovate when you have the market cornered?

It’s not that simple, but it shouldn’t be thought of as so complex that we should all turn a blind eye toward it.  When you have one big company doing all the hiring, they dominate.  You don’t have alternative places to run to for jobs because there aren’t many or any options.  And when they shed jobs in the name of profits, stock price and financial expectations?  There are not many other options for work in the industry because the big boy(s) have the market cornered.

Too big is too big.  That’s why you’ve heard people crowing about tighter regulations.  Something should be done to encourage competition and limit business size.  Everyone can have a profit, but encouraging the big to get bigger is a hinderence.

They’ve craved the status-quo and have shunned, if not feared, the idea of innovation in the production and design of their vehicles. Oh, the fabled “Big Three” have evolved over time but they haven’t broken any new ground. They haven’t taken an ambitious chance. What they have done is simply offer more of the same in different wrappers. Big cars turned into station wagons, station wagons turned into vans and mini vans, vans turned into Sport Utility Vehicles.

When it looked like automakers would be forced to adhere to tough air regulation rules in California? They fought it with lawyers. Oh, General Motors went ahead and actually made an electric car in case they lost their case but after they won? Not only did they shelve the things, they had all existing models destroyed. Perish the thought they would try something different when they didn’t have to.

But big cars don’t need to be fuel inefficient. Ask Jonathan Goodwin.

Over the last few weeks, that article on the “Motorhead Messiah” kept coming back to my mind. I originally saw it in 2007 before gas prices topped 4 dollars a gallon in some places. Goodwin has taken Hummer’s and made them flex-fuel (biodiesel, diesel, etc), more fuel efficient and with more power than they originally had. All with standard parts from General Motors. And he’s been doing that for years. He’s been working with Neil Young to convert Young’s 1959 Lincoln Continental into an electric-natural gas hybrid.

Oh, General Motors finally caught on… But they did it real late at that.

In reality, Goodwin’s work has begun to influence some of Detroit’s top auto designers, but through curious and circuitous routes. In 2005, Tom Holm, the founder of EcoTrek, a nonprofit that promotes the use of alternative fuels, heard about Goodwin through the Hummer-junkie grapevine and hired him. When Holm showed GM the vehicles Goodwin converted, the company was duly impressed. Internally, Hummer executives had long been looking for a way to blunt criticism of the H2′s gas-guzzling tendencies and saw Goodwin’s vehicles as an object lesson in what was possible. So GM decided to flip the switch: It announced the same year that, beginning in 2008, it would convert its gasoline Hummers to run on ethanol; by 2010, it said, Hummers would be biodiesel-compatible.

I went into absolute hysterics when I read that paragraph. Hysterics because GM was not only introduced to this years ago, but also because they were going to wait years to implement things… That 2008 target? Gone, because the Hummer brand is for sale and the production all but ceased.

You look at Apple Computers and the ambition they have shown the last decade with the iMac, the iPod and the iPhone — three items that have revolutionized computing and consumer electronics… And then you look at the Big Three US automakers and note that there is no innovation and ambition in their development and design of vehicles.

There is the status-quo, the tried-and-true… and that’s why all three are suffering billion dollar loses fiscal quarter after fiscal quarter.

GM, Chrysler and Ford need ambition and innovation again. They need someone like Goodwin (outside the box, outside the bubble) in charge of engineering, and someone of the same quality in charge of the companies themselves, to get back into the swing of things.

You can’t bank on things staying the same, and for the Big Three? Their downfall was expecting just the opposite – for things to stay the same, perpetually.