Who's driving this thing?

Credit consumers for auto industry's improvement, not federal bailouts

  • Follow Editorials

People want more cars now. Therefore, that proves that bailing out the car industry was the right thing to do.

Can you say “non-sequitur”?

Yet, that’s the logic in an Associated Press story Tuesday, the main thrust of which is that demand for cars is rising so
fast that Detroit can hardly keep up.

That’s great news, of course. We’d like to see a renaissance in every sector of American manufacturing. That’s really the only thing that will pull us out of the economy’s funk for any amount of time.

But the AP story went on to claim this: “The hiring surge (in Detroit) bolsters the argument of those who supported the federal bailout of General Motors and Chrysler in 2008 and 2009.”

That’s just not true.

For one thing, consumer demand has nothing to do with Detroit’s ability to fulfill it. If consumers need cars, they need cars. Period. They’ll get them from anywhere they can. Consumer demand – absent artificial government intervention – is organic. It happens naturally in a free market.

The likelihood is that the president’s “Cash for Clunkers” program artificially moved auto sales up in time – and that now, demand is starting to recover from that manufactured surge and to bud again spontaneously. Another reason that may be happening: People just haven’t had the money, or the confidence, to buy until now.

The other problem with the AP’s logic is that the bailout wasn’t the only way to preserve the American auto industry. Fact is, a managed bankruptcy might even have worked better – by allowing the companies more legal leeway to cut costs and become leaner and stronger for the future. It might have rescued the industry from the crushing legacy costs of antiquated union contracts and control.

The article seems intent on ginning up a fallacious political argument in favor of heavy-handed government involvement in the private sector – when the more likely lesson is that it’s simply ordinary people, acting in their own interests rather than in the interest of a government or a particular company, who hold the keys to the economy.

Sorry, central planners. It’s free Americans that drive this thing, and always will.

Comments (6) Add comment
ADVISORY: Users are solely responsible for opinions they post here and for following agreed-upon rules of civility. Posts and comments do not reflect the views of this site. Posts and comments are automatically checked for inappropriate language, but readers might find some comments offensive or inaccurate. If you believe a comment violates our rules, click the "Flag as offensive" link below the comment.
omnomnom 03/01/12 - 04:18 am
Please tell that to some of

Please tell that to some of the corps out there. Where's Teddy Roosevelt when ya need him?!

seenitB4 03/01/12 - 06:16 am
It sez.. It’s free Americans

It sez..
It’s free Americans that drive this thing, and always will.

Yes-yes-yes....The American people will make the difference...we now know the damage that has been done to us by gov. misdeeds/mistakes....
We want to put OUR people back to work----almost everyone knows someone loooking for a job....or losing their home & etc.

While the gov. flounders we make decisions that will really change our world......mainly because we care what happens to the good ole USA.

DuhJudge 03/01/12 - 08:40 am
If you want a cause for

If you want a cause for growing car sales, it is low interest rates. You want to see cars take a dive? Raise those rates.

draksig 03/01/12 - 09:32 am
The bailout was nto about

The bailout was nto about saving GM or Chrysler, It was all about saving the UAW. Proof is the fact that the Unions were moved ahead of the bond holders in defiance of law.

David Parker
David Parker 03/01/12 - 03:41 pm
viva !!!

viva !!!

yakirz 03/01/12 - 07:18 pm
The unions exist because

The unions exist because management cares about profits far more than their employees' safety and well being. Without labor unions, sweatshops would be the norm, not the exception. I would never support a major manufacturer that tries to get rid of the union, it's the only thing that stands in the way of unbridled corporate greed and malfeasance.

Back to Top
Search Augusta jobs