Can we at least aim before we throw more money at the economic crisis?
It seems a small thing to ask. But, as I made clear in my previous "Bailout Brainstorm," I have no economics credentials whatsoever. So maybe there's some fancy, Ph.D.-level reason why the future of the American economy depends on us hurling taxpayer money indiscriminately in the direction of failing banks and -- in the latest bleak news -- at failing automakers.
The New York Times reports that General Motors "might not survive the year" and Ford and Chrysler are also "using up their cash at unsustainable rates." The same story describes the resulting rift in the coalition that just helped Barack Obama win the presidency:
"Environmentalists are adamant that any aid be conditioned on the auto industry's dropping of its opposition to higher fuel-efficiency standards and investing more in new technology. That puts them at odds with unions, who oppose any strings, leaving it to Mr. Obama to mediate."
So I guess I'm at odds with the unions, too. No strings? Seriously?
I've got to believe strings don't need to doom union jobs. Strings -- especially strings tied in smart spots -- could steer automakers onto a more sustainable path. Greater sustainability should be good news for the union workers whose paychecks and pensions are handcuffed to these sinking automakers.
In that spirit, here is my new wave of (possibly dumb) questions. Feel free to comment below and add your own questions. Maybe something we ask -- even something dumb we ask -- will trigger a useful idea in the brain of someone who actually understands this stuff.
Question 1: The federal government already offers tax incentives for buying fuel-efficient vehicles. Why not be more aggressive, more direct? Why not use the U.S. Treasury to hand out downpayments to prospective buyers of fuel-efficient cars? If people can afford the monthly payments for a Ford Escape Hybrid or a Mercury Mariner Hybrid, let's help make it happen. Cover their downpayment. Make the sale. Help everyone in the big long economic chain that stretches from auto-parts-makers to autoworkers to car dealers to the waiter who brings the car dealer her lunch.
Question 2: Conversely, is any bailout of automakers just "money down the rathole," as Henry Blodget argues in his call to "let the crippled companies finally go bankrupt"? Refusing to at least consider his perspective is reckless.
Question 3: If the big automakers are doomed, might we get more for our tax money by investing in the entrepreneurs who are trying to bring the cars of the future to a mass market? Would these new companies give autoworkers a more stable, hopeful future? Would it be cheaper in the long run to support autoworkers during the lean period between the crash of the old automakers and the rise of the new ones?
"When the Champagne and caviar crowd is in trouble, there is no conceivable limit to the amount of taxpayer money that can be found, and found quickly.
"But when it comes to ordinary citizens in dire situations -- those being thrown out of work or forced from their homes by foreclosure or driven into bankruptcy because of illness and a lack of adequate health insurance -- well, then we have to start pinching pennies. That's when it's time to become fiscally conservative."
Question 5: Are we wasting our money by throwing it at the most troubled sectors of the economy? As Herbert also wrote in today's column, "Congress and the new administration need to think big -- bigger than the stimulus package of $100 billion or so, which is being kicked around. Now is the time for a coast-to-coast 'Rebuild America' infrastructure program. Put people to work repairing and rebuilding roads and bridges, decrepit schools and ancient sewer systems."
When those road-builders, bridge-builders, and school-builders get some money in their pockets, they may do more for automakers than any bailout can.
Question 6: Are we forgetting that our real goal should be to foster a vibrant economy that provides good, sustainable jobs for our people? Given a choice between applying makeup to the corpse of the status quo and positioning ourselves for the future, the choice should be obvious.
Unless we panic.
So take a deep breath.
Then -- and only then -- throw money at our problems.