most of your reasoning here only comes close to making sense if you consider the auto industry in complete isolation without regard to the economic environment that has brought us to this point.
Quite the opposite, I think. It takes into the account the fact that money for a bailout has to come from someplace - i.e. the taxpayers, and money you use on a losing proposition is money that wasn't used on winning ones. Every dollar used on the bailout is a dollar not used for food, or housing, or medical expenses, or investing in companies you think might actually add wealth to the economy.
Even if you believe that's necessary for the auto industry, doing it a year or a year and a half from now would be infinitely better than doing it when the economy is already in its steepest decline in decades.
So why back a loser. As a thought experiment, what makes any bailout plan the government is likely to come up with better than taking that money and giving it to the winners with the thought of expanding into the territory Chrysler and G.M. leave behind? Giving the money to Toyota, Honda, and yes, Ford, surely would make better sense - they've demonstrated they can operate their companies at a profit.
It is at least partially true that GM and Chrysler don't have much to do with the economic climate, but they do have a great deal to do with their preparations for it. It's no accident Ford isn't in trouble right now - they made moves anticipatory of the downturn in sales and the credit crunch.
no subject
Quite the opposite, I think. It takes into the account the fact that money for a bailout has to come from someplace - i.e. the taxpayers, and money you use on a losing proposition is money that wasn't used on winning ones. Every dollar used on the bailout is a dollar not used for food, or housing, or medical expenses, or investing in companies you think might actually add wealth to the economy.
Even if you believe that's necessary for the auto industry, doing it a year or a year and a half from now would be infinitely better than doing it when the economy is already in its steepest decline in decades.
So why back a loser. As a thought experiment, what makes any bailout plan the government is likely to come up with better than taking that money and giving it to the winners with the thought of expanding into the territory Chrysler and G.M. leave behind? Giving the money to Toyota, Honda, and yes, Ford, surely would make better sense - they've demonstrated they can operate their companies at a profit.
It is at least partially true that GM and Chrysler don't have much to do with the economic climate, but they do have a great deal to do with their preparations for it. It's no accident Ford isn't in trouble right now - they made moves anticipatory of the downturn in sales and the credit crunch.