Tuesday, November 18, 2008

Detroit in trouble

I was going to make a small comment on an Ezra Klein post as I shared it on Reader, but I felt like I might as well write it on COBFTNG since for months it has been cruelly ignored by its own creator and it deserves a little action.

Here is the link. As anyone who knows me realizes, I'm a big fan of Kleins writing on The American Prospect and am quick to share what I feel are interesting and thoughtful posts that he churns out over there.

Here he highlights one take on the automakers bailout/deal. I'm obviously no expert, but why would the auto industry need further incentive to make higher gas mileage standards/ further "green technologies" a priority? I understand why looking for a bailout to try to save millions of jobs is reasonable given the state of our economy, but why haven't these companies innovated and progressed to the point where they don't need the federal government to jump in and save their failing businesses?

I guess it is by and large more of a statement about the condition of the general economy than any one particular industry that these types of "bailouts" are deemed necessary and acceptable. Maybe its an overly simplistic view of the auto industry, but I wonder if its right to feel that these companies are getting what they deserve for not adapting to evolving demand for more fuel efficient vehicles and environmentally responsible transportation options.

1 comment:

I'm Growing a Beard said...

Joey, being an expert has nothing to do with understanding that the auto industry is indeed getting what they deserve by going broke. I think it's fairly obvious that GM et al. are run by selfish, short-sighted capitalists who have always valued the immediate profit over future prosperity. Instead of devoting resources to innovation, they made SUVs to please a culture of soccer moms, safety freaks, and the rest of us who just wanted to be big on the road. Now they pay.

That said, everyone is making the argument that we can't let Detroit bite the dust due to severe national economic repercussions--apparently the auto industry is responsible for one out of every seven jobs. Big corporations, no matter how wealthy their CEOs are, are heavily bound to the well-being of Main Street, they say. And I don't know what I believe, because I've yet to live through crisis of this sort, and like you, I'm not an expert.

An interesting distraction is how most Washington democrats are now pushing for this bailout while the republicans are against it, and citing the environmental argument as their rationale. I read this in an article in the BU newspaper this morning, and I couldn't believe it. Republicans concerned about the environment! Democrats against! I think it just further highlights how conniving politicians as a breed are. They are our societal chameleons; they will adopt any doctrine they feel necessary, without actual investment, if they think it will back their policy arguments.

I guess the real debate is a philosophical one, one that is politically and economically blind. Someone gains prominence in a community by creating something that everyone needs, and the community binds itself to that person. Then that leader starts to fuck up, but no one realizes it until it's too late--not only is the leader going down, but it will take all its people down with it. Now the people of the community have a decision. They can pool all their resources and save the leader--and perhaps save themselves--or let the failure run its course, sacrifice their own prosperity for the time being, and then start over. I think this second option is impossible for a country like ours, so emotionally and mentally rooted in the present. We want progress we can see. If we do indeed bail out Detroit, I just hope the government's billion dollar grant has the stipulations listed in Klein's post. We need Detroit to make a deal here--take our money, but use it to better us as a community and a culture, rather than to better us as a greedy top-down economic institution.