Tag Archives: corporation

Whether to bail out auto companies

American automakers seem to be begging for financial assistance from the federal government. Given the large number of people involved in the automobile industry, it's understandable that many people want to bail them out from possible bankruptcies. I have a different opinion. Given their historical performance in recent decades and their reluctance to change anything, I think they should weather the economic downturn on their own.

Unless they can put forward a viable and concrete plan to change their fortunes without outsourcing everything, putting up dozens of billions of dollars worth of loans may be throwing good money after bad. Unfortunately, the leaders of these companies have mostly focused on threats about what would happen if they went bankrupt, rather than outline changes in long-term policies and priorities that would change their fortune. A lot of people are afraid that the companies might go under, but it looks like they've been consistently self-destructing, anyways. It might be a lot better to put the money into infrastructure investments that will pay off economically instead of wasting it on drowning companies that would go bankrupt whatever we do.

It's a good sign that Democrats are now starting to think the same way, although I think they're still giving the auto industry too much benefit of the doubt with the way they're so eager to help the companies. However, I'm not sure it's a good sign that I'm actually agreeing with the Bush administration on this issue ...