The Bigger You Are, the Softer You Fall

Colin Read
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Colin Read: SUNY College at Plattsburgh

Chapter 20 in Global Financial Meltdown, 2009, pp 158-165 from Palgrave Macmillan

Abstract: Abstract There is a long tradition of indemnifying the corporate mistakes of the free market system, so long as the mistakes and the corporations are equally massive. The notorious bailout of Chrysler in the early 1980s was, until very recently, the best example in our lifetime. Like all US car companies at the time, it was reeling from years of failure to innovate. The oil price run-up of the late 1970s left the US automobile industry vulnerable to the onslaught of small, fuel-efficient cars from Japan and Germany. These countries never had the luxury of cheap domestic oil and so had always kept fuel efficiency in mind. The oil crisis played into their strengths and held the US automobile industry hostage.

Keywords: Moral Hazard; Hedge Fund; Risky Asset; Downside Risk; Mutual Interdependence (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-59518-7_20

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DOI: 10.1057/9780230595187_20

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