Thursday, November 13, 2008

Auto bailout: gas guzzlers guzzle more than gas

So the "news" today is that incoming Pres. Obama wants Congress to fork over "as much as $50 billion to save cash-starved U.S. automakers" like GM, in the news recently for plummeting stock prices. But will it burn up on re-entry? Obama and a bunch of politicians from car-building states seem to think so, that the Big Three could fall into bankruptcy without this cash.

True, if even one of the Three go down the ripple effect could be deadly. Overall wages, benefits, and possibly working conditions could be dragged into the sinkhole. But what keeps getting lost in these rushes to bailout the big boys is what the taxpayer (or the folks who are too poor to pay taxes) get out of it.

In the bank bailout, the US decided to buy up stock, in the end, but non-voting stock (not like the UK). And no new regulations in the deal. Not good enough. For the kind of money we are shelling out, we need a say in how these companies decide to blow it all.

Same goes for the car industry. The bailout needs to have a price, a real price,a useful price. At a minimum, the deal needs to be linked to this policy both parties supposedly have called "reducing our dependence on foreign oil," or some such. The Big Three have played a very nasty game in this respect, aided by the Republicans - and "Who Killed the Electric Car" went way too easy on them. If we bail them out this time, we need some signatures on some dotted lines about affordable electric cars, hybrids, something.

But that won't help most people, who can't afford a new car no matter what it runs on. Poor folks in this country need to get to work, or at least to get in to look for work. And the history of car-making companies blocking public transportation could provide a clue to how the Big Three ought to be helping: put it in reverse.

As late as this summer the Three were focussed on luring people away from public transportation, instead of investing in it. This situation is untenable, and backasswards. What the government needs to do, if it has to bail out these big boys, is use it as leverage. Test the urgency. We need to get the Big Three working on our agenda if they are going to be working with our money.

1 comment:

Mberenis said...

I think that the bailout money towards the auto industry should lower car prices and give us better products, just like what happened with money and lending. Most people don't realize how much money there is out there. During economic times like this, there is more money to be had than ever. Because of the bailouts and economy, lenders are bending over backwards to bail you out too. Believe it or not, there is people getting tons of cheap money nowdays to start businesses, buy homes, pay off debt, and more. Bailout is for You Too!