Congress: Vote Yes on Automaker LoansBy Michelle Krebs November 17, 2008
The future of the American auto industry rests in the hands of the U.S. Congress, which this week debates whether the government should make loans to Detroit automakers to get them through the current economic crisis.
We at Edmunds.com urge Congress to vote yes.
Theoretically, we believe the free market is preferable to government intervention. But this isn't theory. This is reality, and an ugly one at that. The pragmatic answer to these unprecedented circumstances demand action.
The simple fact of the matter is this is not merely an auto industry problem. This is a financial crisis, and not one of the auto industry's making. The lifeblood of the auto industry is credit -- credit for the consumer to borrow to purchase a car, credit to keep the assembly lines running and credit to finance the development of future models and innovation.
Further, the impact of the demise of the auto industry on the global economy would be devastating, surely sending the economy into a wider and deeper recession. Already, we are seeing the U.S. recession spread across the globe with more than two dozen national economies now officially in recession.
As for U.S. taxpayers footing the bill -- they will one way or another. They can ante up now for $25 billion or $50 billion loans whatever it turns out to be -- still modest compared with the financial industries' $700 billion bailout. If the 1979 Chrysler bailout sets any pattern, U.S. taxpayers have a shot at getting their money back with interest.
Or taxpayers will pay exponentially more in massive unemployment, health care and pensions benefits.
So Congress, go ahead, point fingers. There's plenty of blame to go around, you included. Debate all you want; in fact, add the debate over a national energy policy and a national industrial policy to your future agenda. Chastise union workers and auto company execs. Attach strings to the loans. Do your political grandstanding.
Do what you have to do, Congress. But get the job done -- now.