There is no such thing as a free lunch.

Come on W, Take a Stand!

It seems that President-elect Barack Obama is asking President Bush to provide further aid to the U.S. automakers.  It seems like the NY Times prefers this route too, because they have painted a bleak short-term picture of what were to happen if any one of the automakers fails. To do this they cited the “Center for Automotive Research”, which has strong connections to organized labor and the auto industry:

The major automakers — G.M., Ford and Chrysler — are each using up their cash at unsustainable rates. The Center for Automotive Research, which is based in Michigan and supported by the industry, released on Election Day an economic analysis of the impact of one or all of them failing. If the Big Three were to collapse, it said, that would cost at least three million jobs, counting autoworkers, suppliers and other businesses dependent on the companies, down to the hot-dog vendors and bartenders next door to their plants.

The center also concluded that the cost to local, state and federal governments would reach to as much as $156.4 billion over three years in lost taxes and higher outlays for things like unemployment and health care assistance. Separately, some economists say the demise of even one of the automakers could tip the current recession toward a depression.

But what about long-term? I hope President Bush will take a stand, and will not increase the aid to the automakers. It is actually the best thing to do to for the long-term future of the US auto industry. One of the Big Three needs to fail for the UAW to get the picture.

1 comment

1 msg { 12.13.08 at 4:56 pm }

Well, the Senate stood up for the taxpayer and blocked the auto industry bailout. But it looks like President Bush wants to use some of the TARP money instead. So much for taking a stand.

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