Isn't that the point of capitalism? Risk? The more you risk the more you stand to gain and loose?
I understand that millions of people could loose jobs if all of the car companies go under. I understand that those people have families and that it is a really really hard time to find a new job, especially in a city like Detroit. I also understand that "long unemployment lines" can lend to the national freak out about another depression. I also understand that we are potentially going to give, in the form of grants and loans and stock buy ups, BILLIONS of dollars to the auto industry. The government actually bailed out Chrystler already - a few decades ago, by guaranteeing some big loans to them. And now we are being asked to do it again. Really?
Again, not an econ0mist. But couldn't we take those billions of dollars and spend it on a year or two worth of pay and health care for all the people who lost their jobs (with incentives to find jobs in the interim, etc.) and let the failing businesses, well, FAIL? If they are FAILING doesn't that mean that they should no longer operate? Maybe the US just isn't going to have a viable automobile industry anymore. Maybe there is something else that we are really, really good at that could sustain itself, provide jobs, bear risk and reap reward and whatever that is should be allowed to come forward and thrive.
I have no doubt that the above is an oversimplification, but I do believe that free market capitalism contains a relatively straightforward stipulation that investors and entrepreneurs must be willing to bear risk, take chances, be willing and allowed to loose, and loose big, in order for the system to work.
I am really interested in what everyone thinks about this. Does all this bailing out make sense? If you were in charge of all those billions (that we don't actually have but are borrowing) would you do what the government is doing? Why or why not?
I promise this blog isn't about to turn into a soapbox for my (admittedly lefty) ideas about the economy and health care and social safety nets. I've just been thinking about this a lot lately. So there it is. Input? Thoughts? A cute picture?