Living with consequences

Automakers should not get government loans. If they have made choices and those choice proved to be bad... then the business may use Chapter 11 to re-organize and go on. That is why we have bankruptcy laws.

When the regional retail market collapsed for Caldor nobody came running up with cheep money. They went into Chapter 11 and reorganized. Ultimately the reorganization failed and everybody was out of work. But soon after Walmart and Kohls came in to fill the vacuum and the 'store' employees were hired. (I know some people who worked in the Brookfield Caldor and are now in the same building working for Kohls.) The point is regional retail could not compete and went away.

So too with any industry, when it is past usefulness it goes away. Those parts which have value are carried forward by the replacement but those parts which are not needed fall away. This is true progress, and is less expensive in the long run.

If we have money to give away how about giving every registered auto owner a credit for a new 'qualifying' car? You go to a dealer, pick out the car you want and it is paid for by this 'bail-out' fund. The dealer gets the money he/she needs to stay open. The automaker gets paid for building 'qualifying' cars, which includes all the suppliers and supporting businesses. An added benefit is older gas guzzler auto are replaced by more efficient vehicles. Percolate up economics. And reward those who innovate.

Images from: http://tinyurl.com/67rtd5 and http://tinyurl.com/6nf28y