16 December 2008

Bailing Out the Auto Sector

Daphne and I don't accept the necessity of a bailout for the auto sector nor, for that matter, any sector which, had it been managed correctly, wouldn't be in the trouble it is now.

Nor do we accept the numbers in the supposedly at arms length report which is currently circulating media outlets and the blogosphere.

Regardless of whether or not the numbers quoted are correct - a potential 517,000 jobs lost if the (now) wee three are left to perish -, we wonder about this scenario:

Suppose major retailers - say, Wal-Mart, Superstore, Costco and such - all were on the verge of bankruptcy, crying their imminent demise and begging to be saved through a government bailout. The retail sector is HUGE. How likely would it be that governments would rush to bail out these corporate giants?

We suspect that governments and politicos would remain silent.

Why? Because all the jobs are low-paying, and losing 517,000 of them would affect only the lowest income class of workers.

As for an auto bailout, that amounts to nothing but corporate welfare. Alternatives to the gas-guzzling North American automobile were firmly in place via the electric car. This vehicle was being mass produced, was affordable, had excellent mileage rates and was a boon to the environment. However, the little car that could created serious competition to Big-Auto and Big-Oil in the USA. These groups lobbied the Bush administration to have it removed. All existing electric cars were "recalled" and sent to a company that shredded them to scrap.

[This post was written by Daphne and Ocean.]

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