Wednesday, November 12, 2008
Auto-Erotic Suicide
So, it looks like the last partisan battle of the Bush era will be over the automobile industry. Democrats want a lame-duck session to provide GM, Ford and Chrysler with relief. Obama supports the idea. Bush doesn't want to go along with it.
Henry Blodgett weighs in on why letting the American companies formerly known as the "Big Three" just die. Megan McArdle at The Atlantic agrees.
The best argument is that, the US auto industry was already dying a prolonged death -- the credit crunch just boosted ann already ongoing process.
American consumers have already "voted" with their pocket books and have decided that the American cars don't quite measure up. What is amazing is that US car companies already went through this thirty years ago. They didn't anticipate the end of the gas-guzzling station wagons during the '70s oil crunch -- and they didn't anticipate the end of the SUV culture (even though that was eminently more predictable). So, why should the taxpayer be forced bail out an industry that has been stunningly irresponsible.
The major mitigating factor is immediate impact increased unemployment in Michigan, Indiana, Illinois, etc. if GM and Ford go under. Not to put too fine a point on it, but somehow I can't see the new president want to take office just as the US industry goes belly up. Yeah, it wouldn't be his fault, but it's kind of an ominous way to launch a term (consider the US hostages being released from Iran s Ronald Reagan was being sworn in as the exact opposite omen).
So, were I in Congress I would vote against further aid to Detroit. However, with all the other bailouts floating around, I don't see how the momentum for this political train is haulted. Once Fannie, Freddie, AIG, etc. have already been helped out by Uncle Sam, it becomes difficult to say no to the next person in line -- Hey there, Amex!! So, because of the American love affair with the car, Detroit is likely to get what it wants.
This, by the way, further convinces me that this election really is 1980 in reverse: Jimmy Carter, Democrat, helped kill off the best tenets of the liberal "brand" by governing incompetently. Ironically, though, Carter also was responsible for serious deregulation -- most significantly in the airline industry. That step helped usher in the broader deregulatory and conservative Reagan era.
George W. Bush, Republican, helped kill off the best tenets of the conservative "brand" by governing incompetently. Ironically, Bush is responsible for serious government expansion into the private sector -- quasi nationalizing the banks. That step apparently will usher in a broader regulatory and corporate welfare environment in a liberal Obama era.
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Henry Blodgett weighs in on why letting the American companies formerly known as the "Big Three" just die. Megan McArdle at The Atlantic agrees.
The best argument is that, the US auto industry was already dying a prolonged death -- the credit crunch just boosted ann already ongoing process.
American consumers have already "voted" with their pocket books and have decided that the American cars don't quite measure up. What is amazing is that US car companies already went through this thirty years ago. They didn't anticipate the end of the gas-guzzling station wagons during the '70s oil crunch -- and they didn't anticipate the end of the SUV culture (even though that was eminently more predictable). So, why should the taxpayer be forced bail out an industry that has been stunningly irresponsible.
The major mitigating factor is immediate impact increased unemployment in Michigan, Indiana, Illinois, etc. if GM and Ford go under. Not to put too fine a point on it, but somehow I can't see the new president want to take office just as the US industry goes belly up. Yeah, it wouldn't be his fault, but it's kind of an ominous way to launch a term (consider the US hostages being released from Iran s Ronald Reagan was being sworn in as the exact opposite omen).
So, were I in Congress I would vote against further aid to Detroit. However, with all the other bailouts floating around, I don't see how the momentum for this political train is haulted. Once Fannie, Freddie, AIG, etc. have already been helped out by Uncle Sam, it becomes difficult to say no to the next person in line -- Hey there, Amex!! So, because of the American love affair with the car, Detroit is likely to get what it wants.
This, by the way, further convinces me that this election really is 1980 in reverse: Jimmy Carter, Democrat, helped kill off the best tenets of the liberal "brand" by governing incompetently. Ironically, though, Carter also was responsible for serious deregulation -- most significantly in the airline industry. That step helped usher in the broader deregulatory and conservative Reagan era.
George W. Bush, Republican, helped kill off the best tenets of the conservative "brand" by governing incompetently. Ironically, Bush is responsible for serious government expansion into the private sector -- quasi nationalizing the banks. That step apparently will usher in a broader regulatory and corporate welfare environment in a liberal Obama era.
Labels: automakers, bailout, Big Three, Ford, General Motors
