December 4, 2008
How to Bail Out Detroit And Not Lose Your Lunch
The only way to make this a good investment for the average U.S. consumer is to absolutely require the vehicle manufacturers and suppliers to radically retool and switch to products that are more useful and more diverse.
Vehicle manufacturing is simply the last really big manufacturing industry left in this country. The rest, like textiles and bicycles, are all pretty much already offshore. Reclaimingand relocalizing the traditional basic processes at the base of the industrial pyramid can only reduce greenhouse gas emissions by reducing freight transport, and increase economic security by making sure nothing is too big to fail.
But back to the auto manufacturers. They need more discipline to get them in line with the mission of creating economic security for consumers. For instance, why can't the Detroit CEOs persuade the recently bailed-out financial institutions to lend them some of the hundreds of billions they have gotten from Congress and the Federal Reserve? Why is this a good deal for us taxpayers and not for Wall Street? Where are the vehicle finance companies? They seem to be financially healthy. What about the profitability of freight vehicles, not just passenger?
If, like Paulson, they can't answer questions like these in a responsive way that deserves our trust, we should administer more analytical discipline before loaning them any money.
The best way for U.S. taxpayers to not lose on this deal is to make sure we are investing in green enterprises that make things like food, lunches or shirts that *directly* provides for our needs. We don't *need* to drive.