Bailout Dies, Sending The Right Message

Yea, for now. In the auto industry’s economic troubles, or rather, the Big 3’s economic troubles, opportunities abound. Resisting the knee-jerk reaction to ‘rescue’ the Big 3 by simply throwing good money after bad, it is time to turn the lemon into lemonade by showing the socialist world how free-market economies recover from setbacks without government intervention. The path toward regaining profitability is through procedures called a Chapter 11 bankruptcy. Companies that can successfully reorganize and restructure will rescue themselves and all the jobs that go with it. And to the survivors go the rewards. Rewards to consumers, auto workers, stockholders, and the companies themselves.

Proponents, including the outgoing and incoming Administrations, of the misnomer of a process called a bailout, are saying that a bailout is necessary in order to avoid a disorderly bankruptcy process. They say this with a straight face, as though a government takeover, a nationalization, auto Czar and all, of the auto industry, including new rules on what kind of cars they have to make, will be an orderly and fiscally responsible action. A responsible action is one that gives the Big 3 a chance to reorganize into a company that can make a profit again. The ‘bailout’ plan is nothing more than a nationalization of a failing business model with taxpayers footing the bill with no end in sight.

Today, the Senate did the right thing by sending the right message to the White House,the Big 3, and the UAW.

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2 thoughts on “Bailout Dies, Sending The Right Message”

  1. It is a big industry. It involves a lot of people. Any ‘totality of the situation’ does not justify the nationalization of an industry that can fix itself if it wants to.

    Granted, as big a hole they find themselves in, they have the power to fix it. It is unrealistic to expect that the fix won’t be a little painful on the industry, and even to the economy short term. But after they fix it, all will be well again. Some workers will have to go on to do other things. Just like steelworkers had done years ago when we went from 15 steel companies to two. That’s life.

  2. I don’t think you understand the totality of the situation. This is bigger than GM or Chrysler. Parts manufacturers, parts dealers, car dealerships, a whole array of affiliated businesses will fail, those jobs will be lost, etc. Even if GM and Chrysler go through Chapter 11 and come out profitable, those affiliated businesses and jobs may not come back.

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