AP: Let’s Bail The Automakers Out Like We Did Before!
The Associated Press today suggests that automakers and politicians look to the 1979 bailout of Chrysler as an example of how things should be done today.
I take a bit of a different view of it. I think the 1979 bailout is a mistake we should have learned from. Because who is back in Washington (having flown there in his private jet) 28 years later begging for a handout? Why, the CEO of Chrysler of course.
Meaning that the federal government’s previous bailout of Chrysler didn’t do anything to fix the company. It just kicked the company’s problems down the road a ways.
If we bailout these automakers like we did 30 years ago we can be sure that in another 30 years, this time when our children and grandchildren are on the hook for footing the bill, they’ll be back again begging for another bailout. Because bailouts don’t fix problems. Bailouts merely prop up the status quo that caused the problems in the first place.
If we want to fix the auto industry we need to let these companies fail. Or, at the very least, take drastic action of their own volition to solve the problems that ail them.
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