Last weekend, the huge $23 billion auto-parts company Delphi went broke. Along with the recent bankruptcies of United Airlines, Delta Airlines, Northwest Airlines, with GM in dire straights, and scores of other large corporations stagnating and failing, it seems that this trend must have something of a cause, or if not a cause, then a large contributing factor that we can point to.

The most interesting cause, suggested by economist and financial analyst Bill Bonner, is that large corporations have tended in recent history to become more bureaucratic and weighted down. Whereas companies were once mainly headed by risk-taking entrepreneurs, Bonner says, "Instead, they're in the hands of professional functionaries, pension funds, and fund managers." The well-publicized collapse of many airline companies due to pension costs and other bureaucratic failures, along with the failure of these airlines to expand considerably in recent memory, suggests that these companies had lost the spirit of service as they have become more heavily regulated and less entrepreneurial.

Also, concessions to labor unions for better benefits have grown with time, and many large companies find it impossible to remain profitable given the high cost of labor within the US and the cheap alternatives for their competition overseas. Contrary to leftist claims, labor concessions do not always just "cut into the massive profits" of large corporations, but as we can see, often contribute to the bankruptcy of previously profitable corporations. Delphi's 50,000 workers are partly paying the price of unrealistically high wage and pension demands, as they are now threatened with unemployment.

Contrary to popular opinion, profit margins in most industries are very small, and the excess costs of regulations and artificially inflated labor costs can, over time, leave these companies unprofitable and broke. The labor unions who fought against the oppression of "the man" -- the leadership of Delphi -- have now endangered the jobs of 50,000 people with their fantasies of the bottomless pockets of the rich.

These same problems have plagued European corporations for some time, and have led to the bankruptcies of many organizations. As American businesses feel the costs of these government intrusions, workers and entrepreneurs alike have to consider the possibility of going without their favorite cars, without airline service, and without numerous other goods and services as government stifles production.

This is not at all to demonize workers or union representatives -- the interests of workers are best served not by short-term concessions that lead to bankruptcy and unemployment. By dealing with slightly lower wages and benefits in order to ensure greater job security and the possibility of future increases in benefits that come naturally as a result of expanding business, workers can help themselves.

The basic lesson of all this is that money does not grow on trees. The government cannot create wealth through heavy regulation, and businesses cannot create money that they do not have just to placate their workers. When political or union pressures result in policies and laws that act against the principles of economics, everyone ends up worse off.