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Jay McIntosh

Here’s why our industry won’t ever get a bailout

October 9, 2008

Here’s a message I think we’ll hear on our voicemail sometime in the next six months:
Greetings from the Federal Bailout Administration. We have taken the U.S. furniture industry’s request for a bailout under advisement.

In case you are unfamiliar with Washington-speak, that means we are sitting on it, buddy. Your chance of getting a bailout is about as good as the chance that your government will actually pay off the national debt someday.

Why don’t you qualify for a bailout, even though your industry consists of companies that have served the American manufacturing and retailing economy for decades, yet are in a pickle because of declining sales and rising costs? Glad you asked. The short answer is that you don’t have any companies that are too big to fail.

Instead of having hundreds of viable companies in one of the most competitive large industries in the U.S. economy, you might want to consider consolidating most of your assets into three or four big players, like the auto industry or aircraft manufacturing or banking. Take a lesson from Wall Street.

That way, if one of your companies were on the brink of failure, it might threaten to send the whole economy into a tailspin. For bailout purposes, it would be better if your industry were structured as a house of cards, not as a solid foundation with risks spread among many companies that can step into the breach if some of their competitors happen to go under.

Or maybe you could sell a whole bunch of furniture on credit and package all those loans into some exotic debt instruments that you could sell to the investment community. Then find a way to get enough furniture consumers to default on payments to devalue those instruments, and voila!

But take heart. Even without a bailout of its own, we think the furniture industry will indeed benefit from the federal rescue of other industries. A rising economy, after all, will lift all boats. Our bailout of Wall Street will trickle down to Main Street and then will leach sideways to irrigate the furniture industry.

Hold on, we’re getting a text message from our Subcommittee on Verbal Imagery. It seems the whole water metaphor is overdone and doesn’t quite capture the powerful effect of your government’s economic moves. Instead we are directed to refer to the bailouts as fertilizer that will enable American businesses to plant deep roots and bring our national prosperity to full flower in years to come.

Please excuse the smell.