When it comes to bailing out the auto industry, count me in the “let them starve” camp. The auto industry has been outsourcing American jobs for 25 years now with little regard for the devastated communities they’ve left in their wake (seriously, re-watch Roger & Me sometime). The big three have also used their lobbying might to oppose every environmental regulation in their sights. And on top of all of that, their cars suck. Bailing out the auto companies whose single-minded devotion to SUV’s made them blind to the hybrid revolution is like bailing out a record company that hasn’t had a hit since “The Macarena”. Screw them.
That said, I am sensitive to the fact that letting the big three go out of business would be a pretty serious blow to our already fragile economy. But if the solution to what ails automakers is an infusion of cash, wouldn’t it be better to get banks involved? If we’ve already set aside $700 billion to help bailout banks in the hopes that it will free up lending, wouldn’t it be a better idea to just have Congress mandate that banks participating in the bailout must offer debtor-in-possession loans to the big three. That way, if an auto manufacturer fails, they need to file for Chapter 11 like any other company whose poor business decisions lead to their downfall AND the banks free up some cash and start lending again.
Obviously this is probably an oversimplification, but there’s gotta be a better way of saving the auto industry than just writing another giant check.