While "let's party" AIG and trash-loan banks wallow in a promised $700 billion of bailout taxbucks, there is a big debate in D.C. on whether or not to use $25 billion of that bailout to rescue the manufacturing backbone of our country, the auto industry's Big 3.
As Jeffrey D. Sachs explains in "A Bridge for the Carmakers - The Future Is in Sight. They Just Need Help Getting There" (WaPo) "We face an unprecedented financial calamity, energy crisis and environmental threat. A vibrant, growing U.S. automobile industry should play an essential role in solving all three. The technologies that will win the day are in sight; industry has already made important advances. A partnership with government is vital and should begin this week."
And not only that.... if Washington doesn't take action, the second big "D" could be the legacy of George W. Hoover. Sachs warns "...the sudden closure of an automaker would be catastrophic, possibly pushing our economy from recession to depression. Because of the impact on parts suppliers, the shutdown of one company would imperil domestic production across the board, and the jobs at risk include not only the 1 million in vehicle assembly and parts but millions more that would be caught in the resulting cascade of failures. The industrial Midwest -- especially Michigan, Ohio, Indiana, Illinois and Tennessee -- would be devastated, and the shock waves would reverberate across the world."
This isn't the time for faux-conservative ideology or petulant pay-back for the auto industry's past myopic performance.... this is the time for bold action. This week could be the start.... or the end.... of the rest of our financial lives.
3 comments:
$25 billion wouldn't last the bloated 3 one month and they'd be back for more. It is a huge mistake if they give this money to them.
What happened to Old Mr. G.W.Bush and his Pro Market theories? He's said throughout his presidency that the market will regulate itself and all we have to do is just KEEP SPENDING!
He should be the on to cover this bad debt!
I saw the MI (pro) & AL (anti) senators "debate" the auto bailout on Meet The Press.
I hate the false choice the LameStream media portrays bt
horrible Corporate Welfare bailout
v
doing nothing.
The Big 3 Auto companies have competed poorly vs Toyota/etc.
There could be other alternate government actions far superior to this Big 3 bailout.
Off hand a few
1 to avoid a punitive tariff, require cars to be manufactured in the US, with a majority (50%? 80%?) dollar value of direct procured auto parts also mfg in the US. This way even if the Big 3 keep declining, some of those workers can get jobs at US factories of Toyota, BMW, etc.
2 Provide a job retraining allowance ($20K?) to any laid off Big 3 or parts supplier worker.
3 Instead of auto bailout, put $25B into R&D to accelerate the baby industries of electric car batteries, plug-in electric cars, wind turbines, solar panels, geothermal energy, etc
4 If a bailout does happen, the Board of Dirs, CEO, & all VPs reporting to the CEO should be fired. The new execs incl the new CEO should have a salary/total reasonable number like $200K. The model should be what the UK & Sweden did when they temporarily took over & restored failed banks.
Again, to hail with this false choice! Just say no to poorly thought out Corporate Welfare!
Think about this.... Bejing is bailing out its auto industry, Europe and especially Germany will do the same thing. They see the value in having a strong manufacturing base.
Auto manufacturers are failing worldwide, just as the housing market is collapsing, because of the credit crunch and depressed economies. Should U.S. automakers be left in the dust?
The southern-faction of the Senate (from states where foreign automakers are) are the biggest opponents of a Big 3 bailout.
In this weak economy, why risk the failure of the U.S. automakers? That would further cripple not just the economy, throwing millions out of work, but also the safety of a strong national military-manufacturing base. Like for Humvees. (Without the conversion to wartime-manufacturing by our auto companies, WWII could have ended quite differently.)
After all, the $25 billion they are asking for is what we spend in about two months in Iraq.... and for what?
It doesn't hold a candle to the billions thrown at obscene-perk-spending AIG.
Last but not least.... our foreign car makers (who would be the beneficiaries of a Big 3 failure) send their profits out of the country.
Yes, there should be restructuring. Yes there should be safeguards. But also, yes, the bailout loan should be extended.
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