I want to preface this post by saying that this is an “if I was President post” and nothing more…take it with a grain of salt.

I rarely watch the news. Some people find that hard to believe, but those are mostly people who don’t understand trading. I’m not interested in what the news is, as much as I’m concerned with how traders interpret the news and act accordingly. Therefore since I rarely watch the news I don’t really hear the pros and cons of bailing out the automakers. Quite frankly I’m just tired of hearing the word bailout in general. But what I want to know is why can’t we just let the automakers fail? What would be so horrible if that occurred? If a business is not making any money, no bank in their right mind would give them a loan. And since the US government is just about bankrupt, I don’t understand where they’re even getting the money should they decide to help the automakers out.

Below are just a few good articles I found when searching out this predicament we find ourselves in. The problem with letting them fail is the crushing blow to our already fragile economy when the thousands of people employed by this industry find themselves out of work. Obama has all but guaranteed them financial assistance and if he doesn’t then there will be private interest, you scratch my back, I’ll scratch yours, hell to pay. The dilemma is why should the US taxpayer funnel more money in companies with broken business model putting out inferior products, ruled with a union dominated iron fist.

I’ve given this problem some consideration, and Obama will be glad to know that I’ve come up with a solution that doesn’t require the US government to pay a penny, AND, is user friendly to our environment.

First, do away with the Unions. They’re outdated, and they promote laziness. I worked in a union environment so I know first hand.

Second. let them fail and force the Oil companies to buy them, (just threaten them with higher taxes or else and smile while doing it) adding the autoworkers to their payroll. The government is already taxing these Oil companies for making too much money, just drop these taxes, in addition to giving them a tax break for assuming any bad debt these automakers have. Then they can move forward, while focusing their energies toward developing a vehicle that runs on alternative energy while preventing many from losing their jobs. I know this sounds ridiculous, but you know the airlines are going to be get in line for a bailout soon, as will be other companies crying for help, and there just isn’t enough money to go around. Drastic times call for drastic measures, and the US citizen shouldn’t have to be burdened with all the financial load.

I just don’t get why people expect the government to save them whenever there is a problem. Whatever happened to personal responsibility? When Walmart moves into a neighborhood and puts small business owners out of business, you don’t see the government bailing out those individual entrepreneurs. Why is this any different? Let bad business models fail, and be auctioned off at what is deemed fair market value. The government should be concerned with governing as it already has it’s hands full, not playing banker with monopoly money.

Let The Automakers Fail

American automakers are held hostage by their union employees and the company has had to capitulate over and over to union demands for more money and more benefits while the companies have been losing ground to makers of foreign cars.

US automakers hope Obama will bring financial aid

“What we need is to make sure that a vital industry like autos … which is such a big part of the overall economy, doesn’t lead us into a deeper and harsher downturn,” Snow said in an interview on the CNBC cable channel. “The collapse of the auto industry at this time would be devastating for a new president.”

Kudlow: Let the Automakers Fail

“We should not be pouring bad money after bad money. They should have to make major, surgical, structural changes”, Kudlow said on the financial news channel.


Report: Failure of one or more automakers could cost 2.5M U.S. jobs

CAR’s study concludes that a failure by one or more domestic automakers would force numerous domestic auto suppliers into insolvency and could seize up domestic production by international automakers like Toyota and Honda. It would also wipe out tens of billions of dollars in Social Security receipts and income tax revenue and increase transfer payments.

Automaker Bailout? Sure. Bank Bailout? Let Us Get Back to You.

It’s not clear that the $25 billion will even help the automakers very much. Their cost for reaching energy efficiency may be as much as $100 billion.


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