This morning Representative Barney Franks was on NPR advocating a bailout of the auto industry. While I don’t think this is a good idea Rep. Franks had a real good point. He said…
“Well, [insurance company] AIG, which I don’t think anyone would think was as important to the American economy as the auto industry … got $40 billion just now to make it up over $100 billion. To some extent, let’s not have a white-collar/blue-collar bias in our public policy.”
Barney’s dead on with this observation. Paulson and his cronies are quick to hand money to their friends in banking who grossly mismanaged their companies but they are quick to refuse money to the auto industry using the justification of mismanagement. The difference in my opinion and Barney Franks is that he seems to think we should be continuing and extending bailouts. I say end them all immediately.
No industry, automotive, financial or otherwise deserves preferential protection from the Federal government. Furthermore the invocation of public funds into these industries, with ownership stakes in the companies, is the forerunner to socialism. Add to it that none of this does anything to restore activity in the micro economy and there is zero chance that this will actually help restore and improve the economic conditions for the majority of Americans.