Why I Like the Auto Bailout

Many smart people are busy deriding it. There are a host of philosophical, political and economic ideologues, each with a dozen excellent reasons, postulates and theories, backed up by cogent analysis of the first order, riding into battle against it. But it's going to pass. And I'm glad.

I don't care if the Detroit business model is wrong right now. I don't care if their leadership is the biggest bunch of bozos who ever drew breath. The fact is, everybody looks kind of stupid right now, don't they? In fact, the whole game has changed for just about everybody, no matter what part of the supply chain you're in. A guy can't even sell a Senate seat in peace and quiet anymore. And you can't allow an entire industry to go down because its leadership is lousy, can you? Think where your industry would be if that standard was applied.

So if we're really gonna bail out the big three in spite of all the good reasons not to, I'm glad, for a number of reasons that have nothing to do with all the good reasons not to.

First of all, people work there. A lot of people. Yeah, they belong to Unions, which are part of the problem and should be punished! Them and their damn high salaries. So tempting to see them whacked around a little, huh? Those super-rich blue collar workers with their high-paying Union jobs. Let's get 'em! And their families. And their communities. And the stores they shop at. And the schools that their property taxes help to keep going.

Well, I guess if there's a bailout of some kind, the Unions are going to have to eat some of the salary and benefits they've won from Management over the years. They'll have to, to make the system level again, probably. In the meantime? Bail them out, I say. Each and every one of them. Let's make sure they don't lose their homes and feed the vortex of disaster. I don't care if we're investing in a broken down model or helping people who make more money than you think they should. I like the idea of several hundred thousand people staying on the job, paying their mortgages, buying flat-screen TVs, shoes and hamburger.

I also like the idea of the Big Three, back in some kind of business now, really having to sell a whole bunch of those ill-considered and very comfortable gas-guzzlers that are so reprehensible and dumb to have built but still, smell very nice when they're new. Because in order to sell them, they're going to have to advertise on all the media that are right now sucking the hose and missing the massive chunk of revenue automotive advertising represents. I like to think of all those ads keeping Madison Avenue up nights working, instead of laying people off, and all the television, cable, radio, Internet and other media people running to fill the orders, earning enough bread to purchase one of the idiotic vehicles we really shouldn't be making.

I like the idea of money being spent on companies that make something other than money, that produce a product other than a financial instrument, and maybe even putting a halt, even temporarily, to the incredible, screaming descent in which we are now engaged.

Finally, I don't believe anybody's analysis about anything, frankly. A couple of weeks ago, people were ridiculing the idea of simply printing more money to stablize the economy. Stupid! Boneheads! Simplistic boobies! Yesterday I read a Nobel Prize winning economist who suggested we do precisely that, and cited several excellent sources for his view. He may be right. He may be wrong. Who knows? I do know one thing. I know that nobody knows.

In short, there's no opinion out there right now that's worth more than any other. If ignorance was bliss we'd all be tap dancing down Wall Street.

So until we figure out what's really going on? Let's try to use the money we have to help the greatest number of people. And let's start from the bottom, for a change.

Read More:

Should the Government Bail Out the Big Three U.S. Automakers? HuffPost Bloggers Weigh In

Comments

[ReasonIsMyReligion]

Write on!

Let's all recall that the pork ALONE for No Banker Left Behind -- $100b just for the PORK -- is many factors MORE than what we're talkin for the autoworkers.

[jsarets]

Paraphrase:

Everything is in upheaval, nobody knows the rules of whatever comes next, so we might as well bend over backwards to protect the old and familiar. You know, the everyday things. The everyday American things. The 99 cent things. The 240 hp things that, when we suddenly don't have them, strike at the center of our equilibrium. So it’s not surprising then that we get scared, we cling to Ford or Chevy or antipathy to people who don't like them or anti-union sentiment or anti-trade sentiment as a way to explain our frustrations.

[Pdubya]

Oh, I do applaud your angst, Stanley. And since your caveat that no opinion is better than one other, I'll offer mine:

You write one article "End the Recession.­..", and then this one. Data gap. Economic void.

Chapter 11 (not the dreaded Chapter 7) would allow the companies to continue to produce. Contracts would be renegotiated (and under this environment I believe the Unions would prevail), debt eliminated, and business plans restructured. Caps on executive salaries tied to profits, profit sharing, et al.

This isn't putting good money after bad. Its putting bad money after bad. We keep this up, and our currency will be hung next to the toilet.

I've read many more "authorities" warning against printing and borrowing. Have you?

Credit comes from savings, not more credit.

www.mises.org
www.silverbearcafe.org

And yes, the highrollers on wall street should spend some time twisting wrenches. And in time, after we're wiping our ass*s with Federal Reserve Notes and scrounging for bread, hopefully they will be. Because the government can't "create" wealth. Production, exports, and savings does.

[joebaggadonuts]

Ya Stanley, I'm with you on this one. Big surprise I know. My complaining about all the geniuses knowing nothing may have gotten through to you too or you came to it on your own, doesn't matter. In the words of the infamous Firesign Theatre, "We're all Bozo's on this bus."

And since we are talking about car companies, let's enjoy the ride.

[William1950]

Amen Stanley Bing ! I like your thinking here. Another proposal I am in favor of is a stimulus, or a grant of around twenty five thousand dollars to each taxpayer ... each year for four years, for a total of one hundred thousand each... This would get us through the next few years while we could figure out where this will lead us. Hopefully to a new metric ... capitalism as practiced has not worked.

[Pdubya]

do you know what debasing currency is?

agreed, capitalism as has been practiced has not worked. its been corporatism, a softer form of fascism...­greased by lobby, lobby whoring congress and wall street and fueled by a private banking cartel, the fed...that prints fiat currency. that is not free market....­its managed market.

and your suggestion of giving each tax payer a sum of money is exactly what we've been doing....e­xcept you and me haven't benefitted­.....its gone to guns or butter...t­o those at the top and those at the bottom.

sadly, your suggestion would only speed up the crash of the dollar. if you can grasp that concept, kudos. if not....ple­ase research "money as debt", "money masters", "creature from jekyll island" for you and your family's sake. its gonna be a tough haul. peace.

[William1950]

well those at the bottom have not benefitted much ... my point is to give us the money rather than to those who have manipulated us to this point... I do grasp the concept of devaluatio­n.... perhaps that is whats needed ... and in the meantime we can come up with a new metric ... a new paradigm ... a new value based economy which would run steady state... I am talking way over my head here, but I can vision it... thanks

[Hoosierpop]

Let’s reframe the crisis in Detroit. The troubles facing the American auto industry could actually be a chance for us to tackle global climate change. Wh­at the automobile manufacturers should be working on is replacing the internal combustion engine with a design that uses renewable fuel – without hazardous emissions.
 
Perhaps the simplest solution is an economic stimulus program, underwritten by the government, that creates a market for the development, manufacture and sale of better American cars – better in terms of fuel efficiency and emissions. People who buy a new car could receive a government rebate if, and only if, they choose a better domestic car. Old cars would have to go straight to the crusher and not the used car lot.
 
This system provides built-in incentives for the adoption of hybrid/electric cars as a transitional technology. This will help get us on the road to a future of pure-electric cars, and a national grid powered by sun and wind – not fossil or nuclear fuel.

[Pdubya]

and will these new eco cars be bought with cash or on credit? will $20,000 buy one, or will hyperinflation cost it as $40,000? will the banks continue to lend at a decent rate?

man....fol­ks ....you have to understand monetary policy and currency before this pie in the sky stuff sinks our ship.

end the federal reserve and put congress to task of doing their job ...issuing real money and balancing the budget.

[larry278]

The world hasn't had real money since way back when the price of gold was fixed at around $33.00 an ounce & private individuals couldn't own gold in the USA. Most of us never have ever seen real money or had real money. Get real.