The talk on an the Sunday talk shows and from Barack Obama on 60 min, has been the auto industry needs to be bailed out. It appears as if congress is already drafting a plan which will be put to a vote next week.
I have several objections. First many economists say that it won't work. There problems are much deeper than a cash injection can fix. They are building inferior products that people aren't buying. The industry new about the gas crisis for at least 30 years, and there action was to promote massive trucks and SUV's and lobby the government for higher fuel standards.
The industry has had an excessive amount of government assistance for decades. The industry changed our entire society by making it so every American had to have a car. They colluded with other companies that was associated with autos and actively killed street cars in every major city in the US. They were behind the Federal Highway Administration which physically changed our landscape and made it so everyone had to have one of their cars. It has since lead to a situation where we use 25% of the worlds oil and is the biggest factor in our trade deficit.
Now here they are hat in hand when they have had every advantage till this point. When the industry saw competition they have since failed to produce products that can compete. Instead of learning from the 70's gas crisis and producing fuel efficient cars and electric cars, they opted to promote SUV's. They haven't learned, and giving them this money would be throwing it away.
Giving them money so they can try to stabilize their stock issues and pension situation is not fixing the underlining problem. I understand that their will be a lot of jobs lost. Even so, those jobs will be lost anyway because the auto industry is still dying. We should let the free market work it's coarse here. They will have an opportunity to reorganize themselves in Chapter 11 status. If they can't, then well sorry.
Sunday, November 16, 2008
Let the Auto Industry Go Bankrupt
The talk on an the Sunday talk shows and from Barack Obama on 60 min, has been the auto industry needs to be bailed out. It appears as if congress is already drafting a plan which will be put to a vote next week.
I have several objections. First many economists say that it won't work. There problems are much deeper than a cash injection can fix. They are building inferior products that people aren't buying. The industry new about the gas crisis for at least 30 years, and there action was to promote massive trucks and SUV's and lobby the government for higher fuel standards.
The industry has had an excessive amount of government assistance for decades. The industry changed our entire society by making it so every American had to have a car. They colluded with other companies that was associated with autos and actively killed street cars in every major city in the US. They were behind the Federal Highway Administration which physically changed our landscape and made it so everyone had to have one of their cars. It has since lead to a situation where we use 25% of the worlds oil and is the biggest factor in our trade deficit.
Now here they are hat in hand when they have had every advantage till this point. When the industry saw competition they have since failed to produce products that can compete. Instead of learning from the 70's gas crisis and producing fuel efficient cars and electric cars, they opted to promote SUV's. They haven't learned, and giving them this money would be throwing it away.
Giving them money so they can try to stabilize their stock issues and pension situation is not fixing the underlining problem. I understand that their will be a lot of jobs lost. Even so, those jobs will be lost anyway because the auto industry is still dying. We should let the free market work it's coarse here. They will have an opportunity to reorganize themselves in Chapter 11 status. If they can't, then well sorry.
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