capitalism is on it's knees right now, with it's most fundamental clause: of letting weaker companies collapse so that newer, more efficient ones crop up in it's place, is being challenged by it's most vocal proponent, USA. I'm more aligned towards the democrats when it comes to whether the government should provide funding for all the big ticket items such as healthcare and education, but now the auto industry?? Seriously??? I mean I can't help but agree with the "conservatives" here because this has been brought on my their own failures to mold themselves into better, more efficient companies that make better cars with higher fuel efficiency. Didn't the 80's do anything to wake these guys up and realize their follies before it's too late.
The auto industry now wants a bailout too, but their is fundamentally different from what has been offered to the financial industry. If the government provides them 25 billion dollars, they'll spend it on their own capital needs. The financial package for the finance industry though, is a capital infusion for the country as a whole, cuz these guys just repackage the capital and lend it out. So really, do they "deserve" the money. Are they too big too fail too?? What about the numerous assembly lines and factories working down south, employing thousands of workers in factories owned by Honda, n toyota, n other foreign companies with domestic manufacturing facilities. Shouldn' t they be allowed access too?? Their workers are American's too... Hard working, blue collared workers...
The problem lies with the board of directors for these companies. They need to be penalized for their lack of insght towards the direction of their companies and for the fact that they allowed their companies t get in the position they're in.. And the companies should fail, cuz if it doesn't, america's free market thinking will come dangerously close to being socialistic in nature, with soft budgets and deficits galore.
Will capitalism survive this fight??
3 comments:
The Auto Industry is taking a hard hit with the current financial crisis. It seems that they are not getting very much help in terms of bailout money. The Auto industry is very important to our economy and it doesn't seem right that the government is not paying enough attention to their needs. I think this is a very interesting topic. We need to auto industry for transportation and the creation of thousands of jobs.
I do agree with you that the bail-out could be construed to mean that the CEOs are rewarded for doing a bad job of managing their company.
Besides that, the bail-out would discriminate against the 100,000 American workers at Nissan, BMW and other auto companies that have headquarters in other countries. These companies have built cars in America AND have made money from it. So under a market economy, the three auto industries should either restructure its practices and reduce its costs or exit from the economy.
If politicians begin to grant special favors to the auto industry, it would mean that market forces are being replaced by special-interest forces. This is why countries like France, Germany and Japan have grown more slowly. If U.S. follows the same path, then it would lead to stagnation and higher unemployment.
I am not sure if offering a bailout to the three auto industries would count as a government subsidy. If it does, then U.S. will again lose its credibility in the world of merely advocating free trade, but not practicing it.
But besides that, a bail-out actually means taking money from the poor taxpayers and allocating it to the rich taxpayers, which is completely unfair.
I guess the question is: is the auto industry willing to tolerate short-term loss to sustain a long-term gain, or the other way around?
I am not in favor of the bailout for the auto companies. The first time they proposed the bailout to Congress, they didn't even know how the money was going to be allocated. Additionally, they seem to be a lot more inefficient than auto companies in other countries. There is a lot that needs to be fixed with these companies, but I don't think that a bailout is going to help.
Post a Comment