UPDATE:
The CEO's from GM, Chrysler and Ford all arrive in DC for congressional hearings on private jets.I'm a little bothered, if not at all surprised, by the snowballing push to bail out the Detroit 3 automakers (beyond the 25 billion already slated). The argument I'm hearing is that, like Fannie and Freddy, they are "too big to fail". They employ too many people, both directly and indirectly. What I am not hearing is how the auto industry is very much different than any other industry in the country.
Is it purely the size that is our concern? Do we grant a federal guarantee to any company who achieves a certain threshold girth? If so, if we really cannot let any large employer fail, there is very little reason for them to improve performance much, right? And doesn't this weird incentive scheme only tip the balance more in favor of markets players combining and concentrating market power?
If we accept that companies beyond a certain corpulence cannot be allowed to fail, is it not the logical conclusion that companies should be disallowed from reaching same said status?
Further, I reject the statistics for the number of jobs the country stands to lose in the case of one or more Detroit 3 failures.
Firstly, while I don't claim to really know too much about such things, it was my understanding that companies did not altogether cease existing when declaring bankruptcy and sking for protection from creditors. Either they try to recover, retool themselves, and move on or they are subsumed whole or piecemeal by others.
Secondly, many of the jobs, such as parts supplies, repairs, etc. would continue even if not one more GM car were ever to be sold. Fewer parts would be needed, and repair services demand would decline over time, but neither would be a wholesale loss.
Finally, if there is any case to be made for saving them, then they must be selling some amount of automobiles. If they should suddenly stop doing so, I doubt it'd take too very long for somebody to step in and merrily absorb the market share, automagically creating/saving some jobs.
Basically, my argument is this:
If we are saving them for the sake of saving an American business, why not Mom and Pop's Corner Store? If it is because they are too big to fail, why let them become so big? And if we decide we can't/shouldn't stop them from becoming so big, but wish to eliminate punishing market forces, why not just nationalize?
Now, all of the above and everything it is responding to is a dog and pony show, of course. This has nothing whatever to do with common sense, realistic doctrine, American pride, or ethics. This has everything to do with lobbyists, demographics, selfish executives/laborers, and political expediency.
Not yet elected, and Obama's starting to prove he's YAP. Not that he's alone in this, but live by the labor unions, die by the labor unions.
