Saving The Auto Industry
In the following videos, Kim Hill gives a great overview of the problems plaguing the auto industry.
At the end, he makes a plea for a bailout, so the auto industry can get over this hump.
I don't think this is a hump. I know that a lot of Americans don't see this as a hump. If I were in his shoes, I'd likely make the same plea. Hey! For that matter, I'll take a bailout to get me over my current financial hump!
Washington's plan is to get people to borrow more money, to buy more stuff. The idea is that people who can't currently make their monthly payments on their debt, will borrow more, so that they can default on higher payments. This plan has been lambasted to death by most ever intelligent commentator I've heard or read. It's simply ludicrous.
If we doze off into Imagination Land for a while...
The bailout for the auto industry probably needs to be two fold.
1. The Government should just give them a monthly allowance of billions of dollars.
2. Government officials (new jobs!) should just go around to dealerships and buy new cars, to keep sales up.
Now the new cars could be given away to Americans for free. But that would depress sales and prevent a real recovery. So likely the best plan would be to just run them through crushers and recycle them. The auto industry could be sustained for decades, running off the power of the printing press.
Anything short of this, is delaying the inevitable.
So, back from Imagination Land...
The industry is so screwed. The bailout has no hope of doing anything, but slowing the crash a bit.
Kim Hill - Automotive Collapse
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