NO BAILOUT FOR GM!!!

Don't Bail Out GM and Chrysler

Posted by Bruce Ramsey

"I supported the Treasury bailout of the financial industry--not liking it, but accepting the argument that there was a financial emergency, like an epidemic. The failure of one tended to drag down others, including companies that ought to survive. In an emergency, you agree to things you normally would not.

Now I see this story about the U.S. Treasury turning down a request from General Motors and Chrysler for merger aid, and I think, "Good." The case for government aid to the finance sector--whether you buy it or not--does not apply to manufacturing. If General Motors or Chrysler can't merge, or if one or both of them fail, it would be an emergency only in the sense that any failure is. It would not create a contagion among car companies. If it reduced the production of cars, it would help the other car companies.

Failure of a car company would be the endpoint of a long process, not a real emergency. U.S. "Big Three" have been losing market share for decades. Failures and consolidations will happen without public aid. And aid sets a bad precedent. If the federal government aids GM and Chrysler, then why not Ford? Why not an airline, or a railroad or a steamship company? Where does it stop? Let's stop it in finance. That's enough."