President Obama was in Detroit today, suggesting that his bailout saved the auto industry. Bless him, the same, but I wonder. In such a situation, if you spend the billions on the bailout, and if the companies then survive, you can claim it was the bailout that did it, whether the industry would have survived or not.
I think it forgetful, though, to not consider how many years the auto industry did well before we suffered the Great Recession. Even though you suffer losing years, you push ahead knowing profits will return. I well wonder that the auto makers would have survived, anyway. In fact, I think they would have been foolish to close just because of a few bad years. Theirs is a golden cow, and to walk away from it just because of a few poor years would have been foolish.
So, $11.2 billion or $16.6 billion spent to save Detroit? I do wonder whether economists are right, that you inject money into the economy at such times. But, I question whether directing it at the auto industry did anything but fill their pockets. Was the money infused into the economy? Perhaps. If the auto industry would have had to put off paying their bills, due to their debt, then perhaps this money did get injected into the economy at the moment of need, in time to help lift the economy. But, I wonder. It also seems the auto industry could have borrowed to pay its bills on time, and the effect on the economy would have been the same.
As for them filing for bankruptcy, sometimes that can be but a business strategy. If money is on the table, the temptation is to sweep it up. If a company can make money by filing for bankruptcy, it usually does just that.
Just ask Donald Trump.
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