Dodo Derby 2010
It’s that time of year again, Fellow Reckoner, the time of year when we recognize the efforts of the hopeless, the helpless and the naturally unselected. It is, in other words, time to begin rounding up nominations for this year’s Daily Reckoning Dodo Derby.
Long time readers will recognize this project of ours but, for those recently joining us, a quick overview of how this works…
Each year we dedicate a few virtual pages to honoring those companies and institutions that were kind enough to, during the course of the previous year, remove themselves from the financial gene pool. It’s the least we can do. After all, by collapsing under the weight of their own inability to evolve, these tar pit-bound corporate dinosaurs free up much-needed capital for other, thriving institutions to put to better use. Austrian-American economist, Joseph Schumpeter, called it creative destruction.
In last year’s edition, we paid homage to the likes of GSEs Fannie Mae and Freddie Mac, Wall Street’s twin dodos, Bear Stearns and Lehman Bros., and 171 ever-extended lenders of various sizes who fell into the arms of the FDIC. We also singled out General Motors for its near-uninterrupted commitment to delivering automobiles people didn’t want at prices they couldn’t afford.
[To check out last year’s slide show of corporate failure, see here.]
Of course, in a perfect world, all these companies would have been allowed to fail quickly and inexpensively, thereby making way for more adaptively inclined corporate specimens to flourish. Alas, Fannie and Freddie continue to ride on the back of the American taxpayer. The FDIC has since absorbed so many lenders it is, itself, now beyond insolvent. And, as for GM, recipient of large handouts from both the Bush and Obama administrations, we will never know to what productive use its plant equipment and human capital might have gone towards…not to mention all those bailout dollars it sucked from your pockets. How many small business opportunities will never be realized because of these and other over-reaching actions of the know-all central planners?
Needless to say, all this government intervention comes at a cost. This year’s federal budget deficit is projected to top $1.5 trillion, the third year in a row it will have breached the trillion dollar mark. States, too, are bursting at the seams with debts and deficits. Although “Big Government” appears to be in somewhat of a bull market, the 50 legs that hold her up are beginning to buckle at the knees. And, unlike the federal government, states can’t simply employ the temporary stopgap (read: fraud) of money printing. Bankruptcy declarations are, it seems, inevitable. Which brings us to the theme of this year’s Daily Reckoning Dodo Derby Awards…
What hair-brained, anti-business, pro-devolution schemes has your state and/or local government concocted during the past year to ensure its inevitable demise? Stories of waste, ineptitude, incompetence and hairy-knuckled political escapades are all welcome.
Simply leave your comments at the bottom of this post, and we’ll collate the anecdotal evidence and the official numbers to come up with the winner for this year’s Daily Reckoning Dodo Derby: State Edition.