19 November 2008

Fight For Detroit

I've been thinking of composing an argument. It would be an argument so profound - deeply researched and strongly cited - that it would answer all rebuttals before they were submitted and bring the world to my side. The argument (had you not guessed) would be for federal aid to General Motors, Ford, and Chrysler. But such an argument does not exist in my world. Gathering facts could consume me before I even started writing. This is my blog, and therefore only needs my opinion. So that's what you'll get.

Recently I wrote about what I see is the necessity of a bailout for American automakers. My idea was countered with some points that made me rethink my idea. In the end though, my opinion remains the same.

Yes, Detroit missed the call. They should have been building more fuel efficient vehicles in the 70's. There's nothing wrong with building vehicles for farmers and construction workers and other people who use large vehicles. But it's just bad business to ignore the parts of America that don't. The Big 3 did and yes, that brought them to where they are now - in part. It doesn't help that auto sales across the board are down more than 40%. It's not that people are buying hybrids. It's that people aren't buying at all.
Detroit was already playing catch up before the mortgage crisis caught the country with its collective pants down. In the best of financial situations, it would still be a struggle for them. What we're in now paints a much bleaker picture. Management can be blamed, as factory workers build what they're told to build. But leadership at two of the three has changed in the last two years. New people signed on and began implementing change. Those changes take time. We can't expect 30 years of mistakes to disappear in just two.

The auto industry is asking for a loan. I know I call it a bailout (because that's how I see it) but it's money that would be repaid. Without it, they'll go into bankruptcy, and so will their suppliers. The result will go far beyond managers learning a lesson. It will lead to starving families and homeless children. That's the reality I see. A government that will do nothing to prevent extreme poverty, won't do anything to stop it once it's rampant. This is not about saving face or reprimanding. It's about the people to which the government has a responsibility.

Part of that responsibility must include accountability. Congress should ask for guarantees. There should be deadlines and penalties for missed goals. No one should be getting a free ride.

But where does it end? I don't know. We shouldn't have passed the bailout in the first place. We should have let the economy plummet to looting and homeless children. That would have been the way to right the situation. But we didn't. We (and I feel like we all did it, as those fools were elected) passed this bill, gave $250 billion to banks that are still hoarding it, decided not to buy the bad debt, gave more to AIG, and stashed the rest. The bailout is already a disaster. The auto industry needs help. The money is there. It's not being given to homeowners who are upside down on their mortgages. Banks aren't using it to give credit. At least the auto industry can use it. It's my money as a taxpayer, and I demand it go to Detroit.
~ Danie D.
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