Why bailing out Chrysler and GM is liking giving money to a Crack-Whore

I wrote this article a few weeks ago for our UK comrades, The Bad Idea.  It may seem like old news now, but the auto bailout still drives me over the edge.  It reminds me of what the first independent president of Ghana, Kwame Nkrumah, once said about his country’s progress in the 21^st  century, “Forward ever.  Backwards, never!”  Giving money to GM and Chrysler is definitely akin to walking backwards…or at least it’s like running in place.  Here’s how I see it:

Why bailing out Chrysler and GM is liking giving money to a Crack-Whore:

GM CEO, Rick Wagner, convinces the House Financial Services Committee that more Hummers are just what the economy needs.

Having been laid off in this American recession, it’s often hard to bear witness to grossly mismanaged companies being bailed out by Washington. But I understand that it needs to be done and I hope for the best.  However, it is downright painful to watch my tax dollars being doled out in the sum of $17.4 billion to try and save the American automotive industry. 

It’s not the fact that over the past thirty years Detroit has proven that it can’t compete with foreign automakers that bothers me.  And it’s not the fact that Detroit has neglected to invest in alternative fuel technologies that could have put us ahead of the curve years ago. That doesn’t bother me either. Nor is it that consumer confidence in the American auto industry has already been shaken beyond salvation.  Nope.  What really bothers me about the bailout is that manufacturing jobs should not be the backbone of our economy in the future.  So why not suck it up now, take the bumps and bruises, and get busy figuring out our future now while the chips are already down?

Low-wage manufacturing jobs have been steadily making their way overseas for years and no amount of union pressure or federal dollars can stop this inevitable trend.  So I say, let them go.  In a few more years cars will be built by cyborgs anyways.  And anyone that has been to Detroit or any other part of the American ‘rust belt’ knows how bad it’s been for more than forty years now.  You can’t throw a stone without hitting an unemployed person and an abandoned house.  This is a trend that an auto bailout cannot fix.  So instead of trying to promise the American laborer short-term job security, be real with them, let them know that this is serious and that they’ve got to be prepared for a new economy – the knowledge-based economy that is looming, if not already here.

This may seem like an aristocratic point of view, but I’m not suggesting the bailout money shouldn’t go to helping the 2.5 million Americans that stand to lose their jobs if the automobile industry was to collapse.  But it’s a lot like the crack-whore mom who is sitting there with her two kids begging for change.  You want to help those kids really badly, but you can’t give your money to their mom because you know she’ll blow it on rock.  So you find out where those kids go to school or what social services are addressing related issues and you give to them.  The same applies here:  You can’t give this money to GM or Chrysler because you know they’ll just blow it on another PT Cruiser.  Seriously, does anyone think more PT Cruisers will save the American auto industry?

So instead of bailing out a bunch of fat cats that have proven to be innovation retardant, why not create opportunities for the 2.5 million auto workers by investing this bailout money in education or new industries that would create the kind of sustainable jobs they need for long-term employment.  Jobs that are a bit more sophisticated than stamping out fenders on another ugly American car.  Perhaps these new jobs would even have a few transferable skills.  I would be happy as hell to spend my tax dollars on that.  Who knows, maybe one of the new jobs created would be my own. 

* And For a great visual guide to the demise of the auto industry, check out this great graphical depiction of why GM has bombed.  Created by the good people at Death & Taxes: