Consumer Worries Overshadow Profits - WSJ.com

Q&A: HENRY FORD: Consumer Worries Overshadow Profits - WSJ.com:

Question:
"We seem to be regressing to a pre-Henry Ford economy, in which business delights in selling to business.

Remember Henry? He discovered that, if you have something useful to make (in his case cars), if you pay your workers a living wage, and if your treat your customers fairly, then your workers and their peers become your customers, markets grow, and everybody wins.

Our business leaders, especially in finance, seem to have forgotten all about Henry. They're unwinding his discoveries and, in the process, the American dream.

When the pie gets smaller, everybody loses. Isn't something wrong?

Answer:
One needs to look at the big picture and what has happened as government has grown bigger since Henry Ford's day.

In Henry's day the government didn't come in and say that for every $1 (remember the old $5 a day wage in 1914) that the government wanted $4. So Henry would have said - "Gee, I'd like to pay you $5 but the government is going to make it cost me $25".

And, then the worker, who is 'maybe' getting $5 is going to find that the cost of the car has had to go up too! So instead of, say $400 (I don't recall the car cost then), the car might cost $2,000.

And, then of course there are taxes and regulatory changes that are now impacting the cost of capital - so, maybe Henry has to add another $1,000 to the cost of the car to cover that. (Think heavy government borrowing, the 'blame Wall Street and the banks for everything' attitude and the new regulatory bill.)

So yes, Henry was able to let the free market work; but, Obama has been taking to new levels the government's distortion of the free market. Supply and demand is grossly distorted.

So, don't blame business - look at the real source of the problem -> government and unions!