GM Bailout

For the record, I was not in favor of the $700 billion bailout for the financial industry. I'm also not in favor of bailing out the car industry, GM in particular. GM is a company with nearly 2 decades of mis-management. There are reports circulating that if GM fails, 2 million people will be unemployed taking $150 billion in compensation out of the economy (the study is done by an industry group, and I'm not entirely convinced I believe their numbers). But even granting that these numbers are reasonable, the study doesn't say what will happen even with a bailout. Clearly GM (and the car industry) is going to get smaller in the short term. How much smaller? I have no idea, but I'd assume 20-40% smaller, in which case, there are still going to be the knock-on effects the CAR study suggests. Given GM's track record the last couple decades, even pumping the $25 or $50 Billion into it is no sure thing to save it, long term. Remember, this is the company that brought the EV1, which single-handedly killed electric cars for at least a decade. And more recently the eyesore Pontiac Aztec.

Particularly baffling to me is Obama's support for the bailout. Of course, since he carried Michigan, and since Dems love to get union support, it's not really shocking. What I do find surprising is that no reports or analysis tie out one of his other "bold" plans for "transformational change". He wants to spend $150 billion on alternative energy over 10 years, and claims it will generate 5 million jobs. Creating 5 million new jobs in a green industry sounds great - not to mention sustainable. And it's more than DOUBLE the claimed job losses to the (environmentally dirty) automotive industry. Granted not all Joe the Car workers will simply switch over to become Joe the Alternative Energy worker, but on a macro scale, it's a trade I'd be willing to make. Maybe top-off the plan with some education credits to throw at automotive industry line workers to help switch their skill sets to help get some of those new 5 million jobs.