Saturday, December 06, 2008

Bailing Out

Should we bail out the U.S. auto industry?  Everyone's got an opinion, including me.

In fact, my opinion has changed.  I've gone from 'conflicted' to 'against it.'  I was conflicted because of the many people who would suffer if something isn't done to save their jobs.  I was never conflicted because I thought the companies deserved to be saved, or because they are important to the American economy.

The geniuses who gave us SUV's and Hummers and refused to change their ways even when the evidence was overwhelming that they were on the wrong track don't deserved to be saved.  Nor do the people who invested in GM and the rest.  I can cut a little more slack for the workers, but not their union.  And I can cut a little more slack for the ancillary businesses that depend on US car production for their survival. 

But in the end, all these considerations were outweighed by simply not wanting to prop up incompetent businesses.  After all, we're still capitalists, no?

Now I hear the argument that we bailed out financial institutions, and continue to do so, and we bailed out AIG, and continue to do so, so why shouldn't we give the auto industry the same deal?  Call it bailout fatigue.  Call it having second thoughts.  Call it exercising common sense for a change.  Whether we should or should not have bailed out the others doesn't justify what is fundamentally a bad decision.

I don't buy the argument that letting them go into Chapter 11 bankruptcy would be a disaster. Face it, that's what's going to happen anyway, so why delay the inevitable?  As the man said, "Unlike good wine, bad news doesn't improve with age." 

It appears that some kind of deal is being concocted and will be put to a vote next week.  I hope it doesn't happen, and if it does I hope the vote fails.  Regrettably, what I want to happen probably won't happen, and we'll continue to bless bad leadership, bad business practices, and a head-in-the-sand attitude with misplaced sympathy.  

We'll bless them and sympathize - and later we'll need to pay their bills.


Post a Comment

<< Home