There isn't enough outrage about the inequity between the Wall Street bailout and Detroit bailouts. Yes, Wall Street had the benefit of coming first, but if they hadn't gotten $700 billion, the automakers' $25 billion would have seemed an outrageous sum. The D3 are getting some good with the bad. Ultimately the problem is that people think they know about the car market because they own cars, and they aren't happy about the bad ones they've owned. Conversely, you have no idea what banks do. The Detroit Outsider has no idea what banks do. What he knows is that what an American-based bank does can pretty easily be done by another American-based bank. The country has outsourced itself to near oblivion. When money and the transfer thereof are revealed for what they are--ethereal, intangible, ultimately meaningless--"stuff" starts to look pretty valuable. Whether you're talking about euros, yen or yuan, whether the dollar is up or down, a toaster is still a toaster. It's good to have, especially if you want to make toast. Ergo, it's handy to have the capacity to make the toaster itself. Or a car.
The national debt is more than $10.6 trillion. We're in hock to foreign countries that history suggests could become our fiercest rivals. It's not a good situation. But now you want to cut off the flow? Now we can't afford to throw a little more funny money at the rapidly vanishing American manufacturing base? The Detroit Outsider wishes he were sophisticated enough to express this more eloquently, but…what the fuck?
You don't need a study to know that the costs of failure would be greater than a bridge loan. Fortunately there is a study: The Anderson Economic Group and BBK business advisors reported that a failure of two American automakers would cost taxpayers $66 billion. The job losses, other economists estimate, would be in the millions when you factor in suppliers and other related businesses, including other automakers, dealers, etc.
It's the usual scenario that's so hard to accept: Pay now or pay later. If the Detroit Outsider harps on the Bush administration, it's only because it's the most recent and relatable example. There are a lot of single-issue voters out there, those who support one party over the other because, say, they don't want their taxes raised. So these voters pull the lever for George W., probably twice, and sure enough their taxes aren't raised. Instead trillions of tax dollars go into a voluntary war and we get the worst economy since the Great Depression, our job prospects evaporate and our 401ks are so fucked we can't bear to look at the statements. But at least taxes weren't raised.
http://detroitoutsider.blogspot.com/2008/12/bad-cars-as-capital-offense-forget.html
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