We should let them fail
When the banking system started to collapse we had to save them because of the impact their failures would have on the economy. Moreover, many of us caused this. Americans have more debt than most other countries. We bought houses we could not afford, etc.
The ‘big three’ American auto makers cannot make this argument. They made bad decisions that led to making products people didn’t want to buy. I am not just talking about their decision to make Hummer, and other gas guzzlers, rather than hybrids only to watch the cost of gasoline soar. That’s a short term error but their mistakes go back much further than that.
When I was a kid, there was big campaign of ‘buy American and Americans work.’ That argument made sense back then but it doesn’t anymore. Toyota and Honda have plants in the US and employ Americans. And no, they do not treat their employees the way Wal-Mart does.
Another event that was big a long time ago was the oil crisis of the 1970s. The ‘big three’ could have started investing more in cars that getting better gas mileage back then but the government standards stayed where they were and the companies kept making cars that got, at most, 30 mpg. When gas prices came back down most Energy Department programs to find alternative energy were scrapped because the powers that be (that would be Ronald Reagan) didn’t think it was important enough anymore. Had the automakers been smart or had the ability to see beyond their noses they may have started working on better cars then but they didn’t.
When the top car execs went to DC, tin cup in hand, they reminded Congress that of the devastating effects their failures would have on the people of Detroit. Have any of you been to Detroit? It’s not exactly utopia now. It hasn’t been for a long time, because of the bad decisions these people made.
As I say – all the time – the government exists to do collectively the things we cannot do individually. Rewarding these car companies for creating a bad business model – and the $34 billion (up from $25 billion) is more than all these companies are worth combined. Additionally, without a plan, they could blow through it in six months and then we are back here. It is just throwing good money after bad.
Therefore, I propose this: Let them fail. Use that money to help the employees who will lose their jobs. This is not their fault and they should not pay for their bosses stupidity and excess. Help them with actual cash but also training. Republicans like to talk a lot about personal responsibility and for the first time in my life I agree with them.