DCguy said:
Ready to play devil's advocate (and really, I'm just trying to spark a debate, not get my head ripped off) ...
A week ago or so, Mitt Romney (not someone I ever agree with) wrote in the NYT that it'd be better to let the automotive industry go bankrupt, which would force the Big Three to streamline everything and re-evaluate its business model. Of course the downside to that is so many people losing their jobs, but the upside is that the future of the business might be better.
Now I know I don't want to lose my job, and I don't want my friends in newspapers across the country to lose theirs, but wouldn't it serve the future of the newspaper industry better to suffer a bitter defeat, like Romney suggested for the American auto industry, and try to retool and fight back in a more efficient way? In the short term, it would royally suck. In the long term, it might be for the best.
I also know the argument against the non-bailout is simple: There are too many people at risk to let newspapers (or American auto companies) fail, and the options for retooling are far fewer for newspapers than for car makers, who just need to maximize fuel efficiency and go green.
As an aside, CEOs of these failing companies should be fired. Both the auto and newspaper industries need new leaders.
What does everyone think?
Two points.
1. The first is newspapers play a civic role. That alone makes them an important part of the community. At their best, they are not sole profit vehicles. So, letting them die doesn't help the community. Not sure it rises to the level of bailout though.
The auto industry is much different.
2. The problem about letting the auto industry fail is it will devastate a state, destroy a city and put millions on the unemployed line in the entire United States.
Think of how many GM related services there are for cars. Not only does detroit lose jobs, but there are also part distributors, drivers, shippers. Those employees, millions of them, don't go to the store and buy things which destroys retail.
Then you go to the wholesalers and dealers. Eventually eveyone in the United States is affected. A whole economy fails.
That then creates a glut of workers for other jobs, driving down salaries. What happens then? Home sales go in the tank because people can't afford homes.
GM and the rest of the big 3 can wreck the economy.
Mitt Romney is so rich it is obnoxious, and it shows. He sees an opportunity to fix the business and make it more lean and profitable for SHAREHOLDERS. It's all about the shareholders and the investors with this guy. He sees it as an opportunity to destroy a union. He isn't operating in our world.
In theory he is right. Evetually, the business would come back stronger and leaner and cheaper with innovative survivors. But, does that help the working man and the economy?
I don't think so.
If the Govt doesn't bail out and these companies do indeed fail (big if) and cease to exist, then goverment services will be overwhelmed. Unemployment, welfare, health insurance etc.
It will destroy several cities in the rust belt. That will lead to more government intervention and cost on the backend in social services.
With the Big 3 gone, then the towns that depend on them will have to cut schools, police, and city services because there is no tax base.
Once again, social services would be overwhelmed and incredibly expensive. The loss of local tax revenue would be astounding.
So, how would you, as a taxpayer, rather pay for the calamity? Keep them afloat, keep the worker productive and working and making things and give the big 3 a chance to turn around?
Or
Would you let them fail, let misery reign because that is the free market, and then allow our tax dollars to be paid out in social services like welfare, food stamps, health care, and basic city services?
One option chooses using taxpayers moeny and keep people productive.
The other is straight welfare for sitting at home and does nothing productive.
Mitt Romney doesn't get it. Taxpayers pay EITHER WAY.
Now, which one is the real smart choice?
