The Monday Muse: Auto Bailout
Earlier today I was reading an article on MSN that talked about a possible bailout for American automotive companies. Ford, Chrysler, and GM are all on the brink of disaster and possible bankruptcy. The overall economy has been a killer for these companies. Add in a dose of Honda and other foreign carmakers who are gaining in popularity and the picture doesn’t look too pretty for the big three. So they are calling on Washington to bail them out of this mess. They are open to just about any stipulation that would be tagged onto a bailout deal. They just need a massive loan to keep operations moving forward.
There are so many questions that came to mind while I was reading this article. Let me just pose two for our discussion.
How did Chrysler, Ford, and GM get to the point of near bankruptcy? And is a governmental bailout the right step in solving the problem?
This bailout is being held up by a strong minority of Republicans in Washington who believe that this loan may not solve the real problem and will only put our government in greater debt. What do you think?
3 Comments
Jean
Bailout, in my great infinite wisdom (which is not a lot), is not the right move for these companies. (Unless, perhaps the government is up for drilling for and using our oil – and, yes, that’s coming from an ecologist.)
Everyone needs to stop spending what they don’t have. Me included.
Jordan
Living in Michigan, I can totally see the need for assistance for the auto industry. However, I think they are just jumping on a bandwagon, using the current economic climate as a scape goat for their already failing industry. If the “Big Three” had not put such effort and resources behind a single group of vehicles (SUVs) then maybe they would have had a more diversified industry. I think it is their fault for not having put effort into strengthening and diversifying their fleets; they relied heavily on low gas prices.
On a side note, Lash, I saw Ingrid Michaelson at Borders in Ann Arbor today. It was a half hour acoustic show at lunch. Very cool.
Jeff Lash
I agree with both of you. I think the bailout is a bad idea and sends the wrong message amidst a struggling economy. If you are irresponsible or exhibit poor judgment then you can count on the government to take care of things and bail you out. And while Chrysler is one of the “Big Three” crying out to Washington for help, they are also handing out big bonuses to their top level executives. Granted, this was planned before the current crisis in order to keep executives around before the company was sold. Nevertheless, it still strikes me as ridiculous. When you are in the pickle that Chrysler and the others are in, you have to do whatever it takes to keep things running. That means cutting or freezing bonuses (I know because our company is experiencing this).
Unfortunately, I don’t believe there is anything that can be done at this point other than a bailout. You’re right Jordan, they should’ve diversified. And you should always have a plan for such times. So in order to keep these companies and the American auto industry afloat, Washington will have to add millions or billions of dollars to our continuously growing deficit. We’ll owe so much money to other countries that eventually someone should have the right to rename our country since we won’t own it any longer. And I think you are right as well Jean…we should learn from this huge mess not to spend money that we don’t have…although I fear that it may be too late for that. People love credit too much to stop using it. As the great theologian Madonna put it…”I am a material girl”…or boy in my case.
It is times like these that remind me once again that my hope is found in Jesus and not the countries, leaders, and economies of this world.
A side note to your side note Jordan…I bet that was a great show. I tend to like acoustic shows better than the bigger ones. And I’ve read that the Borders in Ann Arbor is pretty stellar.