In all the talk about the bailout (loan, helping hand, whatever) of the Big 3 automakers, the thing we hear, over and over, is that it's necessary to preserve the domestic auto industry. We need to keep that market alive.
But what is "domestic" in this case? If we look from the demand side, there is little chance that we will see numerous Americans going overseas for their auto needs. Occasionally, you hear of someone getting a sports car from Italy, but that is not a big segment of the market. So Americans will pretty much buy cars here in America, if they're buying any at all.
So we must be talking about the supply side. But I can go down to my garage, look inside my older car, the one produced by an American auto company, and find stickers with maple leafs on it - the car was built in Canada. At the same time, Hondas and Toyotas and so forth are being built in this country, presumably the parts are coming from this country, all the extra people who are employed as a result of this business come from this country.
All car makers are hurting right now because the demand side is down. Whether due to a lack of money, or a lack of available credit, folks just aren't purchasing as many automobiles as they were before. None of the proposals on the table help with any of that, it will have to wait until the economy turns around, which may be a while.
No, the packages help three specific car manufacturers, not by magically improving demand for their vehicles, but by propping them up until conditions improve, at which point they will sell cars again (even though they were losing market share before). But, you say, the "car czar" will assist the Big 3 in restructuring so they can make the cars that people want (or should want; lower gas prices are knocking some of those verities around).
My head hurts. The only thing that will help the industry as a whole is to get demand up, and that won't happen while people believe the economy is inching toward the grave. But we don't have a way to fix that, and, if we did, we would have to specify that people buy cars from the domestic automakers, who are not much more domestic than Toyota USA. So we're going to prop up the supply side for some time, but only for those companies that identify themselves as domestic, that don't have funny names.
And the restructuring that we are supporting will cost Americans their jobs, their careers; others will likely lose big chunks of promised pensions and health benefits. I guess I could make a little chart of pros and cons here, but it's probably not necessary. Suffice it to say that the domestic aspect of the auto industry extends pretty much only to the corporate offices. We'll be sustaining the existence of the executives while they are given carte blanche to "do what's needed," even if that means getting rid of every American worker (other than themselves).
Some action may be necessary, I don't know, but I think we're embarking on dangerous territory here when we favor one multinational corporation over another on the flimsy ground that one is domestic, the other foreign. It strikes me as a form of protectionism that saves the wrong people to little good end, and a lot of the economists who are arguing most fervently for help for the Big 3 don't seem to see that. The same people who would howl if we imposed tariffs of any sort are blithely going along with what is, in essence, the equivalent.
But what is "domestic" in this case? If we look from the demand side, there is little chance that we will see numerous Americans going overseas for their auto needs. Occasionally, you hear of someone getting a sports car from Italy, but that is not a big segment of the market. So Americans will pretty much buy cars here in America, if they're buying any at all.
So we must be talking about the supply side. But I can go down to my garage, look inside my older car, the one produced by an American auto company, and find stickers with maple leafs on it - the car was built in Canada. At the same time, Hondas and Toyotas and so forth are being built in this country, presumably the parts are coming from this country, all the extra people who are employed as a result of this business come from this country.
All car makers are hurting right now because the demand side is down. Whether due to a lack of money, or a lack of available credit, folks just aren't purchasing as many automobiles as they were before. None of the proposals on the table help with any of that, it will have to wait until the economy turns around, which may be a while.
No, the packages help three specific car manufacturers, not by magically improving demand for their vehicles, but by propping them up until conditions improve, at which point they will sell cars again (even though they were losing market share before). But, you say, the "car czar" will assist the Big 3 in restructuring so they can make the cars that people want (or should want; lower gas prices are knocking some of those verities around).
My head hurts. The only thing that will help the industry as a whole is to get demand up, and that won't happen while people believe the economy is inching toward the grave. But we don't have a way to fix that, and, if we did, we would have to specify that people buy cars from the domestic automakers, who are not much more domestic than Toyota USA. So we're going to prop up the supply side for some time, but only for those companies that identify themselves as domestic, that don't have funny names.
And the restructuring that we are supporting will cost Americans their jobs, their careers; others will likely lose big chunks of promised pensions and health benefits. I guess I could make a little chart of pros and cons here, but it's probably not necessary. Suffice it to say that the domestic aspect of the auto industry extends pretty much only to the corporate offices. We'll be sustaining the existence of the executives while they are given carte blanche to "do what's needed," even if that means getting rid of every American worker (other than themselves).
Some action may be necessary, I don't know, but I think we're embarking on dangerous territory here when we favor one multinational corporation over another on the flimsy ground that one is domestic, the other foreign. It strikes me as a form of protectionism that saves the wrong people to little good end, and a lot of the economists who are arguing most fervently for help for the Big 3 don't seem to see that. The same people who would howl if we imposed tariffs of any sort are blithely going along with what is, in essence, the equivalent.
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