Quote:
Originally Posted by Aarcyn
Paul Krugman is in favor of a bailout even though the proposal is highly flawed...
If GM is to retool, it must have money infused to be able to belatedly create a more efficient car....
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usually I agree completely with Mr. Krugman, but this time he lost me.
see, the last bailouts went to prop up an unsustainable financial industry, and there were virtually NO safeguards put on the taxpayer dollars.
meaning, very little oversight of how the money's spent.
I'd agree with these bailouts
if the Big Three had to use the cash infusion to make more efficient vehicles, and reorganize.
but I don't believe they will... it will just be GOOD money thrown after BAD, with no accountability, no requirements, and no mandatory improvements.
we saw the results of that already, with execs taking group spa holidays, and getting lovely gilded parachutes, for a comfortable landing.
that's why I tend more to agree with this guy (admittedly *not* an economist!)
Detroit must die
(snipped)
I realize I am no economist. I fully understand there might be reasons far larger and more fiscally complicated to justify keeping the Big Three alive for awhile longer, simply because, like AIG, so many billions are wrapped up in their operations and in the various supply chains that support them, to let them all fail nearly simultaneously could rip a hole in our sinking ship of state far larger and more dangerous than the one that results from letting them suffer and die slowly, bleeding billions all the way.
What's more, I'm also not so heartless to ignore the brutal job losses, the tens of thousands of collapsed pension plans and failed retirement accounts that would result from the end of American auto industry. It would be horrible indeed. But maybe that's where the government's billions would be far more useful, to ease the meltdown and provide retraining.
(I am also urged to note that the enormous, overstuffed UAW isn't exactly a saint, either, and that a large part of the responsibility for Big Auto's lack of innovation and change lo these past decades rests squarely on its petulant shoulders, too. You can't blame all the ills of American auto on the greedy CEOs and their shortsighted accountants. Just most of them.)
http://www.sfgate.com/cgi-bin/articl...otes111408.DTL
