Ben Buchwalter


The GOP Doomed Detroit. And We Wont Forget
December 16, 2008, 4:49 pm
Filed under: Economy | Tags: , ,

I’m still shocked that the bill granting $15 Billion to bail out Detroit’s Big Three did not pass. And I’m still worried that the failure to protect the jobs of hundreds of thousands of American is an incredible mistake that will make this economic downturn even worse. But I must admit that I understand the opposition’s argument on this issue. Still, that doesn’t mean they’re right.

There is an important truth to the fact that bankruptcy could make the Big Three reevaluate their priorities and resurrect their position in the auto world and eventually re-hire hundreds of thousands of Americans. In the long term, bankruptcy could be just what the doctor ordered to improve the failing automobile industry and get our economy on track.

Also, Newsweek has a very interesting article about the foreign-owned automobile industry picking up steam in the South. These “little eight” companies employ many Southern workers with good wages and benefits. This is likely the reason that Southern Republican Senators voted against saving Detroit’s automobile industry. In a capitalist society, competition is king, and we must let bad companies fail to secure the best product. This will ensure that the economy remains healthy in the long term.

But American families do not think long term. They think about the jobs just lost because the executives of these companies actually thought Americans would continue to buy gas guzzling American hybrids instead of gas-efficient, foreign-made hybrids. They think about how to get a new job in this economy, when most companies are laying people off in crisis and to avoid crisis.

So I’ve got to agree with Bob Shrum. Even if the Republicans had some legitimate reasons to oppose the bailout, those reasons will not be remembered. Instead, we will remember that 20 Senators agreed to give $700 Billion to Wall Street, but refused to give $15 Billion (2% of $700B) to support American workers. And the people laid off will remember that the Republicans are largely responsible.

It’s been a bad year for the Republicans. But they could have moderately saved face by playing the politics to appear the savior of the automobile industry. Instead, they effectively fired the Midwest and will pay the price in 2010 and 2012 unless things start to turn around.

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3 Comments so far
Leave a comment

I wonder if the Republicans considered the ripple effect the loss of the US auto industry would have on the overall economy–and how that could effect the sales of those foreign autos produced in their states…it’s really sad that even now, as their economic policies have been proven to be an unmitigated disaster, that they can’t read the handwriting on the wall.

Comment by TH

No doubt, TH is right that their economic policies have been a disaster. However, this completely sidesteps the heart of the post and the CURRENT argument by the Republicans, namely that the auto industry is failing because of a combination of poor management and bloating union contracts. There is a way out for these companies and it’s called “bankruptcy”. It’s not a dirty or a bad word and it’s been used by plenty of companies over the 200 years of its existence as a policy in this country to protect employees, employers, and financiers. The irrational fear of bankruptcy is in fact the problem; not the need to make green cars when gas is under $2/gallon.

Comment by JK

I think you are thinking like sukrat, but I think you should cover the other side of the topic in the post too…

Comment by CixNailawah




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