I got this email today about a blog by an expert explaining why the Detroit bailout is a waste of government money. I wanted to share it with you...
Here's a clip from the email I received:
Greetings! On the topic of the auto bailout bill now before Congress, I thought you might be interested in comments from CEI financial policy expert John Berlau, explaining why it's a bad deal. Feel free to use his comments in your coverage of the issue (or pass along to a colleague). Here is a portion of his blog post:
The Detroit bailout bill that passed the U.S. House of Representatives last night - agreed to by the White House and Democratic leaders but at this point apparently without enough Republican support to survive a filibuster in the Senate - is unique in that it fulfills all three of the government actions Reagan describes in one fell swoop. All it once it not only subsidizes U.S. automakers, it subjects them to heavy regulation as well that have nothing to do with profitability and everything to do with fulfilling "environmentally correct" objectives.
Detroit - the vast community including the parts makers and others that work with the auto industry - should really ask itself if bankruptcy would be any worse than the price of becoming an appendage of Washington in a bailout. A Chapter 11 bankruptcy gives the car firms a chance of being restructured into lean, profitable companies. This bailout would not only squander billions of taxpayer dollars, but put the foot on the pedal of government regulations driving Detroit into "reverse."
He does bring up some good points about why the government being involved int he auto business more than it already is is bad, the problem is the auto companies are backed into a corner right now (except for Ford) and need the government's help to survive. But, since the auto industry employs the most taxpayers in the country, should the government be responsible for giving some help when it's needed? And why are there all these calls for government oversight of the auto industry, yet no calls for increased oversight and regulation of the finance and banking industry, which is really repsonsible for the nose dive of our economy?
Again, why does the Federal Government have such a hard on for the US Auto Indsutry?
Here's the link to the guy's whole blog, read it and see what you think: