Pondering The Auto Bailout

A CNN research poll showed that 61% of Americans oppose a government bailout for the U.S. auto industry:

NEW YORK (CNNMoney.com) — A majority of Americans oppose a bailout of the troubled U.S. auto industry, according to a poll released Wednesday.

The CNN/Opinion Research Corp. poll, conducted by telephone on Dec. 1-2 with nearly 1,100 people, showed that 61% of those surveyed oppose government assistance for the major U.S. automakers.

[…]

A full 70% of respondents indicated that a bailout is unfair to taxpayers.

In addition to being unfair, the poll showed that a majority of those surveyed think a bailout would not help the economy.

CNNMoney.com

Before I say another word, I want to make clear that I am not claiming any kind of expertise in the area of economics. I wonder, though, if a simple, common-sense approach to this might be in order.

Let’s begin with the the concern that a government bailout of the auto industry would be unfair to taxpayers. I wonder if the people who oppose the bailout on these grounds have considered the 3,000,000 (three million) people who make up the auto industry. That’s 3,000,000 more people out of work!

Will those who are claiming that a bailout would be unfair to taxpayers be OK with those 3,000,000 people putting their children on Medicaid, receiving food stamps and government funded housing assistance, and a variety of other forms of government aid — all of which is funded by taxpayers?

For those who are concerned about the fairness to taxpayers, doesn’t it make more sense to support a one-time bailout which will keep 3,000,000 people working, out of the unemployment and “welfare” lines so that they have more to put back into the economy?

Yes, the economy. That’s the other concern. In addition to a bailout being unfair to taxpayers, those opposing it also think that it would not help the economy.

And putting 3,000,000 people out of work will?

Like I’ve already said, I’m certainly no expert on the subject. But I don’t think it takes an economic genius to figure out that putting 3,000,000 people out of work can’t be “fair” to taxpayers or good for the economy.

Am I missing something, or have these people not thought this through very well? Sure, there need to be restrictions and conditions on any sort of bailout. But, in the bigger picture, doesn’t it make more sense and benefit all sides to keep the auto industry moving and 3,000,000 people working?

As always, I welcome any and all feedback.

Posted by Lottie — Copyright © 2008 Rambling On

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8 responses to “Pondering The Auto Bailout

  • dam

    Just a little interesting point: Did you know that Chrysler is privately owned by Ceberus Capital Management, which is worth a whopping $27 BILLION. They don’t want to invest “their money” in “their Chrysler.” They’re hoping we (taxpayers) will. Did you know that they only paid $7.4B for Chrysler (and they’re asking for how much in help???). I think they can afford to help themselves out…

    Here’s one article if you haven’t heard this info before:
    http://www.pewnews.com/subsAccessInfo.asp

  • Lottie

    Thanks for the information, Dam. I didn’t know that and it certainly sheds new light on the subject. I couldn’t get the link to work, though. But I can research Chrysler and Ceberus Capital Management now that I know to.

    By the way, I had intended to mention in the post that I wasn’t actually trying to argue for or against the bailout, really. I was just pointing out what appeared to be logical inconsistencies in the thinking of those who were questioned in the poll. I’m so accustomed to hearing “no fair to taxpayers” from people who oppose social programs and couldn’t help wondering how many of these folks are of the same mind.

    Thanks again for the information. I’ll keep looking into it, and please feel free to keep me posted with updates that you find as well.

  • Terra

    I have been thinking about this for weeks. I have decided that I am in the minority according to this poll. However, that is because the bailout could have larger implications, if planned properly (really hoping my faith in Obama is right on this one.) The problem with the idea of bankruptcy is it would effect all of the businesses. While we need to spend less money all around (we being the people) spending less because we have less isn’t the idea.

    3 million jobs? I know I am a bleeding heart though… However, the arguments for the bailout make more sense to me. Not that both sides don’t have some good ideas, but taking away one of the few products that we produce seems economical suicide. However, I am all for holding then accountable and for them having to update their way of doing things.

    (Oh, ya’ the people that agree with me don’t call it a bailout they call it government assistance.) Really the argument isn’t about helping them out, it is more about how to help them out… 😉
    NPR Bailout

  • girldujour

    China has offered to buy all three of them. They don’t need a bailout. They need to make better cars and manage their business better.

    http://www.huffingtonpost.com/jane-hamsher/chinese-want-to-buy-the-b_b_144920.html

    Plus, the “Big 3” has already received Billions from the U.S. government, starting in 1993 so that they could be competitive with hybrid vehicles and the like. What did they do with all that money?…

    http://www.nytimes.com/2008/11/22/business/22auto.html?pagewanted=print

    I say, “f” ’em. They have had plenty of chances. We’re getting boned.

  • Lottie

    Terra: You make a good point that I was thinking about last night. It seems that with government assistance, we’re in a better position to regulate what they do. Surely that’s a good thing.

    Girl: I hear what you’re saying, and I’m certainly no expert on any of this, but it sounds to me like there wasn’t enough oversight or regulation last time. Maybe that was the mistake that we don’t have to make this time.

    I’m on board with saying “f’em” to the fat cats. I have a much harder time saying “f’em” to 3,000,000 workers who will lose their jobs and health insurance by no fault of their own. I’m not saying to dole it out and let the Suits do what they will, or hope they abide by some handshake agreement. But is there some reason we can’t grant them the assistance and tell them exactly how it’s going to be?

    Another thing we have to consider with the “f’em” approach is how it will affect the economy. One of the concerns people expressed in the poll was that they don’t think the “bailout” will help the economy. Letting the entire industry go down the tubes and putting 3,000,000 more people out of work surely can’t help matters.

    Thanks for the links. I don’t know why your comments keep going into moderation. I have it set to allow up to three links. Sorry about that…

  • girldujour

    Obama was talking about letting the suits go — and I think that’s a good idea. They have proven time and again that they are not fit to run a business, nor are they creditworthy.

    I’ve said it before, if anyone should be bailed out, it should be the worker with big, fat severance packages — or keeping their jobs under someone else’s management.

  • Terra

    I am and have been an Obama supporter, but I am pretty sure that “suit” talk is a major play at mass appeal…

  • shari

    Tired of the bankers having all the fun.

    Bailout! The Game the hilarious parody of the government bailout where when you lose, you win. In this role reversal of the classic board game debt is king.

    Bailout! The Game gives you an endless supply of T.A.R.P funds, laughs and fun.

    Be the bank, lose billions and get a bailout.

    Play as one of six banks: Bankruptcy O’ America, Worth Farless, No Cashvia, Liquidation Brothers, Greedy Investors of America, or Washed Up Mutual.

    Land on or pass over Frantic May and Frivolous Mac spaces and get slammed with bad debt.(MBS’s and CDO’s)

    Just as Monopoly was born out of the Great Depression, Bailout! The Game was born out The Great Recession.

    Winner of the Mr. Dad Seal of Approval. http://www.mrdad.com

    Liberty Street Games

    http://www.bailoutthegame.com

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