Wednesday, November 12, 2008

Automotive Bailout?

Should we bailout the auto industry with tax dollars? What an interesting question! The automakers provide a huge number of jobs for people around the country and symbolically are important given their status but on the other hand, when a company can't keep up with innovation or proper business models, shouldn't the be able to fail? At what size company would we decide not to bailout? I find this entire scenario interesting.

3 comments:

Anonymous said...

We should bailout the auto industry. 1 in 10 of the employed in the US is involved in the auto industry. This also means tax revenue for the government. They should not have been shielded from competitive pressures by the government but now it is too late. If the auto industry fails - at this point we all suffer. There is no question that the government has to bail them out. If in the future they fail under better economic circumstances then there will probably not be a bailout because the economy could absorb the shock. But not now. Also, if you or someone in your family was employed by the auto industry it would not even be a question for you.

Blogman said...

First off, I don't mean to say that the auto industry should NOT be bailed out. I just don't know. The 10% you're talking about is indirect impact, not 1 in 10 employed by auto industry.

Second, many Republicans don't support the bailout, so I think it's a reasonable question to postulate. Finally, how do you know I don't have family members or friends employed by the auto industry? And certainly I have many friends in the financial industry and I also question that bailout as well.

Not to mention these companies have been performing poorly for quite some time without assistance. The NY Times had an interesting point that part of the increased costs for the industry are healthcare associated, yet the industry did not support the Clinton healthcare plan.

Blogman said...

And clearly I'm not the only one with this question - see Time Magazine:

http://www.time.com/time/business/article/0,8599,1858702,00.html