Monthly Archives: November 2008

Giving $25 billion to the Big Three U.S. automakers is akin to giving $25 billion to public schools — wait a minute!  Aren’t they both considered bailouts?  Depends.  If you’re a business suddenly suffering in a steadily sinking economy, it’s called a stimulus package.  An investment.  If you put money towards public schools, that’s called waste of resources because only competition between privately funded institutions and publicly funded  institutions will improve our children’s education. Did you follow that line of logic?  No?  Neither did Enviro-Girl.  Still, those are the arguments she reads — bailouts for the wealthy and poorly run?  Good.  Bailouts for public institutions that benefit the poor, middle class and wealthy who choose to use them?  Bad.  Go figure.  Really, if capitalism is such a great system, letting people obtain endless wealth, then when people lose their wealth, it’s just capitalist Darwinism, right?

Consider the facts:  All 3 U. S. automakers comprise less than 50% of the vehicles purchased by Americans.  They were still churning out SUV’s — Hummers, Suburbans, Tahoes and Expeditions while American buyers were purchasing foreign-made hybrids made by Honda and Toyota.  U.S. automakers have crippled themselves under a pension and benefits system that they can’t afford — haven’t been able to afford for almost a decade.  To compensate for rising labor costs, they invested in short-term and very profitable gas-guzzling SUVs, ignoring the warning signs that rising gas prices would make such vehicles impractical.  Today you can’t trade in an SUV for any value, Expeditions, Explorers, and Suburbans collect dust on used car lots while buyers wait in line to snag a Prius.  U.S. automakers have lobbied hard and long against stricter fuel economy standards and emissions standards — but the writing has been on the wall since the 1970′s.  Automakers in Europe and Asia have long made small, energy-efficient vehicles while the American cars became bigger and less fuel efficient.  And a lot of folks have been buying those foreign-made vehicles because they run better and last longer. The market for automobiles has changed, and the Big Three were the last to figure it out.  Taxpayers should not be held accountable for their poor decisions.

Nothing good will come of it.

For 2 decades the American public has swilled itself silly on the myth that to be sexy, cool and in full pursuit of the American Dream, it needs to buy a new car/truck/van/SUV every few years.  Cars have been peddled as a lifestyle — an expensive one at that.  The auto industry has glutted the market and grown huge perpetrating that myth.  Millions of dollars spent on ad campaigns convinced Americans that a car payment is a necessity.  The truth is, we don’t need a new car every 2-3 years and we can’t afford to keep up “appearances” by housing a new SUV and sports sedan (that loses anywhere between $1,000 to $8,000 the minute it’s driven off the car lot — talk about a poor investment!) in our garages.  Heck, now the American Dream has become a car for every driver instead of a car for every household.  A 3-car garage has become the norm in home construction.  America’s love affair with cars is not good sense or cents.

The auto industry has profited from government subsidies for over 30 years.  We know the fuel they run on is of limited supply — and government dollars subsidize the fuel industry.  We know the taxpayer-funded infrastructure they drive across is in dire need of fixing.  Traffic jams cause headaches all over Atlanta, Los Angeles, and the East Coast — single-driver vehicles are a poor way to move people around — it’s expensive and inefficient.  Add to the equation the fact that we’re 20 years away from an aged Baby Boomer generation that will require public transportation.  That’s right, our country’s biggest population segment will be in their 80′s, and we don’t have the infrastructure to keep them in their communities.  Perpetrating the status quo will not solve these problems — rather, it will continue to exacerbate them.  $25 billion would be better spent building up the infrastructure for public transportation — in whatever form it may take.  It’ll keep money in Americans’ pockets because it’s cheaper to ride a bus or subway than to own and drive a car.  A dramatic move to public transportation will alleviate congestion on roads and highways and assist unfit drivers from getting to point A to point B without compromising their lifestyle or independence.  It’ll dramatically cut emissions that are the main contributor to global warming — the only reason America saw a significant reduction in carbon emissions this year (for the first time in decades) was because of rising gas prices.  Getting cars off the road improved air quality, so if we’re serious about global warming, bailing out the auto industry is a huge step in the wrong direction.

Subsidizing U.S. automakers at this point would be as foolish as creating a subsidy for horse and buggy dealers.  There’s no market for what they’ve been selling, there’s no point in continuing the facade.  Forcing our country’s hand on this issue by letting market forces work their “magic” will allow sensible solutions for consumers and our environment.   Our nation survived the transition from horse and carriage to railroads, from railroads to cars.  We’re ready to make the next transition and that time is past due.  Denying the Big Three a bailout will spur the change America needs.