Clarion Content

The Clarion Content knew it was coming. When we endorsed President-elect Obama we outlined for you the array of policy disagreements we had with the Democratic Party establishment. Here we are a mere week on from the election and already, we are suffering ajada (but not remorse.)

The cause of said ajada is the talk amongst Democrats from Obama's newly appointed Chief of Staff, Rahm Emanuel to House Speaker Nancy Pelosi of a bailout for the auto industry. Ridiculous! The Clarion Content is strenuously opposed! This is just the dangerous sort of French model of state sponsored capitalism that we railed against before the election. When an industry screws the pooch as egregiously as the self-serving morons in Detroit have, there is absolutely no way the Federal Government should bail them out. It creates an absurd moral hazard. The sense that some companies are too big to fail, allows their executives to say, "No matter how badly we screw this up, you know we ultimately have the taxpayers to fall back on." This sort of moral hazard is precisely what led to the Fannie Mae and Freddie Mac disaster; where the country and the budget got reamed and the fat cats got to keep much of their ill-gotten gains.

The Clarion Content is not opposed to the $25 billion already authorized by Congress for the auto industry that is specifically targeted to help the auto industry begin producing more fuel efficient cars. However, to hand over billions more just because General Motors, Ford and Chrysler say they are cashed strapped is blatantly wrong headed. It sends a signal to the country and the world that America intends to go backward rather than forward. While we are all for job retraining and extended unemployment benefits for the workers who got trapped in the middle, we believe the auto companies as entities deserve to survive or fail on their own merits. Just as we believed the airline industry should have been made to after September 11th, 2001, when the government lavished billions on an industry that had managed itself atrociously, it was a move straight out of the old Italy-Al Italia playbook, horrible for efficiency and backward looking.

We have read numerous good suggestions. The folks over at OurFuture.org have done a wonderful job of aggregating some of the things that have been written about how the next bailout should force Detroit's hand on the hybrids. Not only do we wholeheartedly agree, but one of the Clarion Content's local Durham readers has proposed to go them one better. This brilliant fellow has proposed that Federal Government use the massive auto subsidy Detroit wants to pay them to convert the entire existing federal fleet of vehicles to run on either hybrid engines, flex fuel or natural gas. (There could be highway bill incentives for the states to follow suit.) Now this might not save all of the big three automakers, they are designed to do something entirely different. But, it would be a huge boon to employment in the wider auto and manufacturing industries, especially if existing facilities can be converted to become assembly lines to work on vehicle fuel intake changes. These assembly lines could then be the basis for whole new fleets of consumer vehicles manufactured to run on the same fuels. Just as government investment in new technology has led the way, from radar to the internet, so it could be for alternative fuels.

For the Democrats to advocate simply handing piles of cash to the auto industry the way Bush the II did for the airline industry would be fabulously irresponsible and a defamation of the progressive "change" argument of President-elect Obama.

Labels: 2008's President, Economy, Politics, Practical Advice, technology