ahead of GM

ahead of GM,

You should understand that American cars enjoy strong sales. Although Toyota has tentatively pulled ahead of GM, GM is still the world’s largest auto manufacturer by sales. The problem is that the world’s largest sales do not produce profit, because there is a problem in the cost structure, namely that corporations seem to bear costs that should in principle be paid by the state. Many corporations that are suffering declines in profit-earning capacity have generous welfare programs. On the other hand, highly competitive corporations either do not have such a program, or the program is borne by the state. Namely, this is a problem of who pays for the welfare program, and this issue cannot be solved by one corporation alone.

Investment in a new field is important in the medium and long term, but instantaneous effects should not be expected. The thing that works quickly lies in the existing industries. Let me give an example concerning medical services. Flaws in the medical service system are distorting the structure of the medical service industry. The creation of a structure that allows people to receive medical service without anxiety would help establish medical services as an industry.

The problem is not disparity itself. Rather, the problem is that the market is nonfunctional due to disparities. Namely, the problem is the influence of disparities on the market structure. What is important is not a new industry, but an industry that is indispensable to society but is structurally showing a decline in earning power.

The problem lies in the market: funds are not circulating in the market. If increasing public works causes worsened finance, higher national debt, tougher business conditions and lower tax revenues, then we will fall into a vicious circle. In the worst case, the crowding-out effect may occur. To avoid this, funds should be supplied through the market.

　　　　　　　　　　　　　　　　

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