Heard on the news today that Bush is thinking about bailing out the U.S. auto industry. THere was even talk when he met President Elect, Obama, that maybe the U.S. shoud have a “Car Czar”. As I understood the story, this is under serious consideration and P.E. Obama agrees that if Bush doesn’t bail out the industry as a lame duck, he will do it a a first priority upon taking office. Hell, a car czar! What about a People Czar? Hold them wallets tight.
There are lots of due paying union members who would lose their overpaid jobs if the US auto industry was allowed to fail like it should. Other companies made smaller vehicles that got better MPG while the “Big Three” made larger and larger SUV’s and trucks. The UAW has about half a million members but their political clout is much more extensive than that.
Plan to see more money thrown at bailing out the Auto industry. Hell, we already gave AIG money and bailed out (nationalized) the banks, why not the Auto industry?
Furthermore, why not have a Car Czar or a People Czar? We already have a Pirate Czar.
Reagan gave us a Drug Czar, so why not? It’s sooo 20th Century.
They are afraid if the auto industry fails the markets will have another huge drop, we went from 13000, to 9000 in a few months, we could from 9000 to 5000. There would be bread lines in some parts of the country, the dollar would drop again and that would cause a huge meltdown in the global markets.
No one wants to bail out the auto industry but they employ thousands of people not just the factory workers but also the dealers, the mechanics, the financing companies who manage the loans for the cars. It’s a matter of 10s of billions now or 100s of billions later in stimulus packages. Holding on tight to our wallets is not going to help when inflation is increasing and there no safe investments. Even gold which was trading at about 1000 a few months ago is down to 700 now. goldprice.com/goldhistoryprices.asp take a look at 30-60 day and 6 month charts unless you saw this crash coming years ago there aren’t any safe places for our wallets.
Sending the Big Three a bailout check of $25 billion without preconditions will only postpone their demise instead of preventing it. Unless there are preconditions attached, this check rewards bad management practices at the expense of innovation.
It’s true that an auto industry collapse will ruin thousands of jobs across the country. But if Detroit doesn’t innovate or reinvent the way it does business, the end will come eventually. Washington should require the Big Three to produce better fuel efficient vehicles as a requirement for receiving this check. Otherwise it will send a precedent for other troubled companies with bad management practices to ask Washington for a bailout.