GM Part 5: Reader Comment And Response

A blog reader comment (from a traditional Republican btw):
"GD 2.0 would be a fact if action isn't taken. Consider, for every job on an auto assembly line, there are 7.5 jobs in auto-related industries. I agree with Reich that there's going to have to be tough love here and the CDS market will go haywire I'm sure. "

TW: Someone needs to get this message to Sen. Kyl, Sen. Shelby etc., who got on the Sunday talk show circuit to piss on the bailout concept. I am absolutely not claiming the Dems have all the answers or that they are not contributors to this epic mess. BUT, the Republicans must face up to the reality that the "Reagan" ideology if it was ever effective is certainly not effective or particularly relevant now.

This GM thing is not a binary choice between two extremes- e.g. throw $25 Billion no strings attached to the automakers or do nothing. There can be and should be all kinds of strings attached but to do nothing is to invite economic disaster. The automakers will go down with government intervention, there is no private market solution short of liquidation of at least 1 or 2 of the Big Three.

Few, even the so-called experts, realize that this economic crisis is no longer so much about the financial crisis from this summer and early fall, it is about a precipitous collapse in world-wide demand. The auto industry while much smaller than it used to be is still a very significant component of employment in the US. Without auto related employment and the associated consumer and investment demand, our economy will spin into a depression. Solving the auto sub-crisis does not solve the overall crisis but without solving the former you will not solve the latter.