Saturday, February 18, 2012
Revisited: What Is Good For GM Is Good For America
This week on CBS News I watched a brief interview with the CEO of General Motors. When asked directly was the Government "bailout" necessary, he said he might be offending some customers, but that in his opinion the situation for GM, the American auto industry, including auto parts suppliers and the United States' economy would have been far worse had the Obama administration let the American auto industry go into bankruptcy. There are those that don't care that the outcome was a success, regardless how much economic suffering was avoided, and how much quicker the "bailout" of GM and Chrysler was an important factor in the speed at which our domestic economy has rebounded. It is easy to say let them all go into bankruptcy, but has anyone calculated who the "all" is in economic terms? How many tangential industries, companies and jobs would have been affected by a bankruptcy of GM and Chrysler? Does anyone believe that the total number of bankruptcies would have been just those two automakers? Could Ford Motors have survived if GM and Chrysler went into a long protracted bankruptcy? It doesn't take a Nobel Laureate economist to realize that any supplier to the American auto industry that was heavily dependent upon that industry would certainly find their company at risk of bankruptcy. Talk about a domino effect! This would have been a domino effect that would have taken down many more companies than just those supplying the auto industry. General Motors is back selling more cars and making bigger profits, and thousands and, in my opinion, millions of people are working today because the federal government came to the aid of an industry that affected so much of our domestic economy. So, in conclusion, I think the CEO of GM was right in his analysis of what would have been had not the Obama administration taken the actions they did. For conservatives, the saving of jobs and preventing a severe economic downturn may not justify the "bailout", but that is where I disagree with them and their philosophy of the role of government and its relationship to its people in the 21st century.