Good Money After Bad
If the world's citizens will not freely lend the Big Three automakers money of their own free will, then Congress is considering using force to make it happen.
Auto industry allies hope to secure
up to $50 billion in federal t loans this month to modernize plants and
help struggling car makers build more fuel-efficient vehicles.Congress returns this coming week from its summer break, and the
auto industry plans an aggressive lobbying campaign for the
low-interest loans.
I wrote earlier on why we should not be afraid to let GM fail. Paul Ingrassia makes this point:
Any
low-interest loans to develop fuel-efficient cars should be made
available to all car companies, not just the Detroit Three. The law
passed by Congress last year is framed to make this highly unlikely.
But if developing fuel-efficient and alternative-energy cars is deemed
worthy of taxpayer subsidies for public-policy purposes, it's just
common sense not to put all our eggs in Detroit's basket.
I would have gone further and said that US automakers are perhaps the last one's one would entrust with limited capital resources to develop such a new technology. What would have happened to the PC revolution had the government circa 1975 limited all the available investment capital for new computing technologies to IBM, DEC, Honeywell, etc.
