Monday, November 17, 2008

Auto Asphyxiation

Hey, I just finally broke down and bought a Blu-Ray player! Times are tough so I went with Woot's crazy deal on a Memorex unit for $139.00. It doesn't have all the features I want, but the one that does would cost me $400, and even after Thanksgiving it will cost over twice what I'm payin'.

So one makes sacrifices.

The trick is choosing your sacrifices wisely. For example, say you have an auto industry that is asking for money. They've been hurting for years because they didn't anticipate the American marketplace as well as the Japanese did. Now they're on the brink of bankruptcy and they claim that if taxpayer money isn't brought in, they're outta business, leaving a big smoking hole in the center of the economy.

Do we ransom the government to prop up a failed business, or do we suck up the damage and let the Japanese win?

This one is hard, because there is no good option. Assuming we go hard-line libertarian and simply let the market sort it out, you have massive middle-American unemployment. Suddenly there is a big consumer dead zone, people who can't afford to buy stuff, and instead of bailing out the auto industry we're throwing money at unemployement benefits. Meanwhile, the malls close. In fact, it's a market correction just like the Great Depression was.

On the other hand, we could go full-on Liberal and just throw money at the Auto Makers. "Take this bag o' cash you guys, and spend it on what works best." That's not likely to help much either. And as I understand it the UAW doesn't want to budge on salaries, which is unrealistic and stupid. Auto workers are going to have to get less, profit margins are going to have to drop, and God knows the executives are going to have to take pay cuts (or move into a more profitable field, like say the airline industry) otherwise no matter how much money we pump into cars, we still lose to the Japanese.

Whose auto industry, by the way, is government subsidized.

So I'm in favor of a bailout IF the above compromises are part of the deal. It will still hurt (people who make less buy less, but at least they can afford a cheap blu-ray player) but it doesn't cause bread lines. Like a flu shot that causes you to get a little flu, but doesn't put you away for a week.

7 comments:

wamk said...

If the money for any bailout was going to actually retooling the factories, and making better vehicles, I'd be all for it.

The reality is that the money isn't bailing out the Big Three, it's a bailout for the UAW.

It isn't my responsibility as a taxpayer to provide the UAW with a job. If the UAW isn't willing to make changes, then they deserve to fail.

What happens if the $50 billion isn't enough, Piker? Is $75 billion too much? $100 billion?

Publius said...

Is it as good as the BetaMax?

Jut like the Internet, this BluRay thing'll never last.

Publius said...

Oh, and I'd be in favor of the bailout is we could eliminate unions.

Publius said...

Oh, and only the first part of that last one was for humor.

wamk said...

The Internet is a fad. Just like pockets.

Danielk said...

Agreed. I have gone over exclusively to belt-hooks now. I'm losing a lot of change though.

Publius said...

I've been into those new pants, lately. I think they call 'em Bell bottoms. Cool, man. Far out. Now THAT is a trend that'll never die.