Is Detroit Special?

The fundamental question that needs to be asked when talking about bailing Detroit out, is the auto-industry special? Are the big three really big enough that they deserve a government handout? Are too many jobs tied to this industry to risk them collapsing?

My understanding of the bailout bill was that it was going to the financial sector because it is banks and investment companies that run the entire economy. Basically they are special enough that the government cannot let them crumble or else the nation would quickly begin to crumble.

I sat listening to the executives of GM, Ford, and Chrysler speak in front of Congress and I couldn't shake the impression that they were trying to strong-arm the government.

"Give us this money or make us cull 3 million jobs."

While this is quite a persuasive argument (especially as Congress is trying to save face with the middle class after bailing out some of the richest people int he country) it doesn't totally make sense. Consumption is down right now, and it may be a while before it starts to rise again here in America, but the free market tends to be self-correcting people will eventually start buying cars again. The Economist raises an interesting point in one of their opinion pieces, Chapter 11 is designed to help companies go through exactly what is happening to the big 3.

Letting the car industry here in America go bankrupt does not mean that we will never see an American car again. It means that a flagging industry will be forced to go through serious restructuring that is desperately needed. $25 billion in loans is a large risk for the government to take on when the industry has been so sluggish to catch up with the latest in fuel efficient cars. With oil prices continuing in what appears to be a free fall my fear is that if the companies are bailed out there will be no incentive to make more efficient cars. Then as Detroit falls even further behind in hybrid technology oil prices will inevitably rise again making foreign cars even more attractive. This then would be the final chapter for Detroit, with no economic crisis to blame and no more bailout options they would end in Chapter 11. Except in this scenario odds are that Americans will be out tens of billions of dollars in tax money that we just handed to the car companies.

Even after reading about this issue for almost a week I'm still up in the air as to whether or not we should bail out Detroit. I'm just putting my faith in lawmakers (never a great plan) that they will make an informed decision. If the bailout does happen though it MUST come with strong strings, nay chains, attached. Forcing the car markers to adhere to strict new emission standards and invest heavily (with public research as well) in improving hybrid technology.

Change.gov

For the first time (to my knowledge) the President-Elect has set up a website to let the public know what exactly is happening with his transition into the White House. I truly believe that this is the type of transparency that we can expect from the Obama administration. No more secret courts (or no courts at all), no more files being specially classified above Top Secret by the VP, instead we will be able to utilize the Internet to turn the White House see through.

The website is great. Very slick, in that true Obama fashion. I think my favorite part is the Weekly Youtube Addresses. This is the perfect example of the direction that Obama is moving, he will be able to engage the youth and the apethetic segements of the population much more readily. I mean lets be honest if you spend too much of your time just trolling through Youtube clips odds are you are not politically engaged. This is the message that Obama is sending out to America, he will be the president for everyone.