Not Cease from Exploration

Wednesday, November 19, 2008

David Brooks Piece On The Big Three Bailout

I do my best to get a 30 minute workout in my schedule about 4-5 days a week. Sometimes it's easier said than done to actually make it happen, but never the less I do try. While I'm chugging along for 30 minutes on the elliptical machine, I usually read through two newspapers...typically The Scranton Times and USA Today (both of which I buy at work that morning). Anyway, this has two benefits for me:

1. I get much-needed exercise (stress relief, lower blood pressure, etc.)
2. I get to keep up on current events.

In yesterday's Scranton Times there was what I think is the best yet commentary piece of the proposed bail-out of the "Big Three" automobile manufacturers, penned by New York Times columnist David Brooks. Click on the title of this blog (or here) for the article. Personally I think everyone should be interested in this, as what is done in this instance has very wide implications for our nation and our economy.

My own opinion is that Brooks has nailed it. If you or I were to fail to run the financial side of our lives in a prudent manner, we would have to face the consequences of a debt management service or perhaps bankruptcy. There would be no government subsidy of our bad spending and life decisions (gee, maybe buying all the Elvis memorabilia on QVC wasn't such a good decisions after all). In fact, even if you were prudent in running your life, you could still encounter situations (such as a large medical expenses) whereby bankruptcy could be the only option. Yet here we stand, seeing an entire industry that, for about as long as I have been alive, has failed to make sound business decisions with regards to fuel economy, product reliability and labor relations.

At most, Congress should allow the Big Three to use the $25 billion in loans already in place for technology re-tooling for other uses AND attach new conditions that will require the companies to submit to transparent oversight of core business drivers (such as fuel economy and product reliability). The public should also be given a seat of the Boards of Directors of these firms.

Let's stop rewarding failure on the part of the money-elite and punishing failure for the rest of us.

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