There is only one reason for Congress to loan money to America's struggling auto makers. There is only one reason that matters, one reason that is more important than political or economic philosophy and that reason is extremely selfish.
We need the jobs.
The entire rustbelt region of the country, and the Mahoning Valley in particular, are utterly dependent on the American automotive industry to survive. People feed their families because they work for GM, Chrysler and Ford. People pay their mortgages with the wages paid by automotive suppliers. Small businesses thrive because those automotive industry employees spend their dollars in those businesses. Governments are only able to provide services due to taxes paid by the automotive industry and the workers in associated industries.
I am throwing off any semblance of objectivity as I write this. If you think these companies should be allowed to fail because you adhere to a free market philosophy, you should probably just stop reading now and save yourself the frustration of refuting what I'm saying. I just don't care.
It is imperative that Congress and the automotive companies reach an agreement that allows all three companies to carry on daily operations, innovate new technologies and support the suppliers that depend on them. Let's be very clear. The industry is asking for a loan, not a free money bailout.
There are thousands of people in the Mahoning Valley who depend on General Motors Lordstown for their emplyment and those people do not work for GM. They work for first tier suppliers, logistics companies, transportation companies and raw material suppliers. Do you realize how many companies and good paying jobs in Mahoning and Trumbull counties are associated with the Cobalt and G5?
I do not see a problem with the federal government providing a loan to the auto companies. No, every failing company cannot be saved. But not every industry has 1 in 10 workers dependent upon it. It is in the national interest for the automotive industry to be saved so they can become stronger. The automotive industry hires engineers, business school graduates, scientists, electricians, plumbers, machinists, IT professionals and chemists. Those jobs require higher education. That means educated people are earning good salaries, providing a stable middle class and raising children who are more likely to become highly educated professionals.
I will be the first to say the auto industry failed to plan for the increased gasoline prices we saw this summer. But to their credit, until gas cost $4.00 a gallon they were providing a superb product that people were buying in record numbers, namely SUV's and light trucks. We like big vehicles with lots of room so that's what they built and sold. We also like big houses and buying things on credit. When the credit bubble blew up at the same time gas prices went through the roof, we realized we were over extended and there was no credit available for buying cars and even if we could, we couldn't afford to put gas in them.
So there it is. Cars aren't selling because we're broke, banks aren't lending money because they got burned loaning money to people who couldn't afford their houses and the cars being made are a decade behind where they should be in fuel economy. We need to save ourselves and we can do that by providing loans to the auto industry. There is nothing wrong with the government protecting our jobs when all that is needed is a loan. Congress needs to get off their butts and decide what is best for the country. Somehow, I don't think allowing 1 in 10 workers to become unemployed is in the nation's interest.
SPEKTRMODULE: Podcast 22 – The Deeps
1 day ago