Usatoday.com posted an article yesterday about the bailout of the automobile industry that read:
I think most of us can agree that a healthy automobile manufacturing sector would be beneficial to market stability. But unfortunately we do NOT have a healthy automobile manufacturing sector in the United States.House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., said in a letter to Treasury Secretary Henry Paulson that the Bush administration should consider expanding the $700 billion financial rescue to include car companies.
"A healthy automobile manufacturing sector is essential to the restoration of financial market stability," they wrote.
If I have been alive 28 years ago, I think I would be having deja vu right now. Unfortunately, the people currently in power cannot remember the government bailout of Chrysler in 1980, which only postponed the crisis until now. (Obama was only 19 then, remember.)
Yes, it would be unfortunate for all the people in the three main Detroit companies to lose their jobs, but GM, Ford and Chrysler do not have a profitable business model. A bailout only delays the inevitable fall; in fact, it augments the future impact by taking tax payer dollars to patch a failed business. They are taking money that could be aiding current, profitable businesses that would grow the stagnant economy and instead throwing them at the union-tied auto industries.
The U.S. auto industry has failed because it refused to focus on the future of the industry and instead focused mainly on SUVs and trucks. The auto industry failed because it is locked into an unprofitable relationship with unions. People are paid, under the union regulation, to not work. How can the American people be expected to be the crutch for these companies?
Innovation should be rewarded, and that is what a free market does. Sadly for the current American economy, the continual propping of the auto industry has impeded upon the free market and has in turn created a greater crisis. Had the auto industry been allowed to fail organically twenty odd years ago, it would have been a gradual process that would not have such an impact.
President Obama needs to take a look at history... the current auto industry in the U.S. is going to fail at some point. Throwing money at the auto industry only postpones the problem for future generations to deal with.
1 comment:
Oh, what's a few more billion dollars when we are already trillions of dollars in debt, and spending $700 billion (and counting) to bail out financial institutions?
The biggest impediment is that everyone looks to the government as a solution for every problem. The government that is there to take care of every problem is also the government that has total control of your life. We need to find, promote and elect leaders who realize that personal responsibility is the best method to move our country forward.
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