I'm a Pundit Too

Thursday, November 20, 2008

Don't Let Congress Turn The Auto Industry Into Another Amtrak

Since early September, when the political elite in Washington informed us of the dire need to bailout the financial markets, we have see a building tide of industries, states, and even cities clamoring for their version of a bailout from the federal government. The “experts” in Congress promised us, that the bailout would shore up the financial markets and we would all be better off. Now that the markets have continued to drop, congressional leaders response is that we need to bailout more companies.

Representative Barney Frank was asked when the bailouts would stop and his response was as confusing as the clamor for government bailouts. Frank claimed that the bailouts would stop when they stopped working. Maybe Mr. Frank has been too busy with his reelection campaign to notice that the bailout has not worked. In fact, most economists believe that the bailout accentuated the problem. The Dow Jones Industrial Average has dropped an additional 3000 points since the bailout that was going to save us all was passed.

This week, executives from the “Big Three” automakers were on Capitol Hill to try to convince lawmakers of their need for a bailout of their own. After the hearings, congressional leaders held a press conference to explain their inability to come to any agreement on a bailout. Their explanation was what we have come to expect from Washington politicians. They shifted the blame to the automakers, not for their failing companies, but for failing to present them a plan on which they could agree. They set a date of December 2 for them to present plans for a bailout on which they could come to a consensus.

Does Congress believe that if they just throw money at the problem that the crisis will just disappear? This has become the normal routine in Washington. Whatever the problem, politicians just throw money at the problem, but don’t change any of the contributing factors that led to the problem. Look at government funded education. For years the public school system has been a breeding ground for failure or mediocrity at best. Government’s answer is to throw more money at the schools but never changing how or what they teach. Then they are surprised when the results are the same.

I realize that this may be a completely foreign concept to Congress, but since when do we reward poor business practice by giving them taxpayer money? I believe that the government should get out of the way of failing businesses. They should do whatever they can in the way of tax relief to aid in the expansion of businesses, but why should they reward those who make poor choices? I believe that after Congress throws money at the auto industry, the automakers will be in the same situation within a few short years. They need to restructure their business so that they can compete with the foreign competition. The process will be painful, but the U.S. auto industry will be better off in the long run. The taxpayers need to let the politicians know that based on their history of failures, we do not want them to meddle in the affairs of private companies.

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