Opher BanarieAuto Industry Bailout Revisited
December 7th 2008 11:09
A couple more weeks have gone by and the debate continues about the auto industry bailout. Friday's hearings in Congress resulted in the Big 3 increasing their total dollar requests to $34 Billion. And the UAW says they are onboard to make concessions. And the executives drove hybrids to Washington, rather than flying their corporate jets.
But none addressed whether or not this makes sense. Does it make sense for the taxpayers? Of course it makes sense for the shareholders, employees and executives in Detroit. The three CEO's agreed to work for one dollar a year each. Wasn't the intent of the whole bailout plan to get new management in place so that better decisions will be made? Does a CEO who makes one dollar a year make better decisions than one (the same one!) earning $10million?
And if there really is $34 Billion buring a hole in the pockets of Congressmen, isn't there a better way to "invest" it than in companies that very likely will go bankrupt regardless of the bailout? What about Tesla Automotive, the company working on a quality all-electric sedan? What about battery technology, or a high-value capacitor to make all-electric cars more efficient? What about cleaning up EPA Supersites of all the pollution and toxins already in the ground/water/air? Why not put some dollars into restoring wetlands and protecting endangers wolves, bears, birds, snails, fish, etc? Clean up the Everglades or Chesapeake Bay? Aren't there schools needing new rooves or toilets or basketball courts or tracks? And cities needing rapid transit or bridges or sewers?
The answer to all of the above is "Yes"! Yes, Yes, Yes, Yes, Yes, Yes, Yes, Yes, Yes!
And that's why the auto industry should get a "NO". Not because they don't need the money. Not because they don't make a good case for getting the money. But because EVERY case can be made - and the politicians shouldn't be deciding how money should be spent. Tax money gets spent on programs that have the greatest political value - not on the greatest absolute value. Not on the best social value. If we let politicians spend tax money (as we already have too much) they will spend it all, and then some.
Maybe the lesson we all have to learn is that government isn't the answer to every problem. Maybe the wisdom in how this country was established truely was wise - that a small, focused Federal government is best. It provides a structure for the rest of us to enjoy our liberties, and within that structure we decide which companies thrive and which don't.
But none addressed whether or not this makes sense. Does it make sense for the taxpayers? Of course it makes sense for the shareholders, employees and executives in Detroit. The three CEO's agreed to work for one dollar a year each. Wasn't the intent of the whole bailout plan to get new management in place so that better decisions will be made? Does a CEO who makes one dollar a year make better decisions than one (the same one!) earning $10million?
And if there really is $34 Billion buring a hole in the pockets of Congressmen, isn't there a better way to "invest" it than in companies that very likely will go bankrupt regardless of the bailout? What about Tesla Automotive, the company working on a quality all-electric sedan? What about battery technology, or a high-value capacitor to make all-electric cars more efficient? What about cleaning up EPA Supersites of all the pollution and toxins already in the ground/water/air? Why not put some dollars into restoring wetlands and protecting endangers wolves, bears, birds, snails, fish, etc? Clean up the Everglades or Chesapeake Bay? Aren't there schools needing new rooves or toilets or basketball courts or tracks? And cities needing rapid transit or bridges or sewers?
The answer to all of the above is "Yes"! Yes, Yes, Yes, Yes, Yes, Yes, Yes, Yes, Yes!
And that's why the auto industry should get a "NO". Not because they don't need the money. Not because they don't make a good case for getting the money. But because EVERY case can be made - and the politicians shouldn't be deciding how money should be spent. Tax money gets spent on programs that have the greatest political value - not on the greatest absolute value. Not on the best social value. If we let politicians spend tax money (as we already have too much) they will spend it all, and then some.
Maybe the lesson we all have to learn is that government isn't the answer to every problem. Maybe the wisdom in how this country was established truely was wise - that a small, focused Federal government is best. It provides a structure for the rest of us to enjoy our liberties, and within that structure we decide which companies thrive and which don't.
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