Expensive pandering
The american cars industry problem didn’t start from the rising oil price, they started because the auto makers are less competitive than their rivals - mostly the corporations based in Japan. In order to sell more cars, and increase their profit, the auto makers need to become more competitive by selling better cars for less money. This is obviously easier said than done, but it happened in the past and if the car manufactures can’t do it again they should disappear. One sure way for not helping is by handing them money they didn’t earn:
Presumed Democratic Presidential candidate Barack Obama told the UAW in a letter that he supports the $4B in federal aid, stating that he would “provide real solutions necessary to help this industry compete and win in the global economy.”
I don’t really think that Obama, or any other candidate, misunderstanding this basic economic. But what we see here isn’t economic rather than a bribe, and the question of the long term effect is only measured as far as November 2008.
(via the club of growth)
Tags: Bailout, Obama, Pandering, PopulismRelated posts