I have been listening to various experts on the economy, including Joseph Stiglitz, over the past several days, and I find it ironic that on one hand they seem to say it's OK to bail out financial institutions at taxpayer expense but that Chapter 11 is a perfectly acceptable alternative for the automotive sector. As a citizen of what is commonly called the "Rust Belt," I see this is just one more example of Wall Street insiders thinking that companies that produce nothing (e.g., Google, Yahoo, and Ebay) are more valuable than companies that actually manufacture a product used and needed by everyone.
Would someone please look at the reality of the American economy and explain how companies that provide only services or information can survive if the majority of people that produce goods are unemployed and not able to purchase anything? It appears that the segment of the economy that has shown the greatest productivity gains in the past ten years is inconsequential to the folks who seem to "print money" in the lending and brokerage houses (in good times).
The critics of the auto industry don't seem to realize that the reason they are in the position they are in at present is principally due to the fact that the consumer cannot get credit to buy their product (this is not just the domestic companies--it's all automotive sales). Where then does the blame for the crisis lie? Is it because the car companies are not building fuel-efficient vehicles? Is it because their cars are substandard in quality? No, the current financial crisis can be laid at the doorstep of the same sector so blithely defended by the economic community.
May I ask Joseph Stiglitz just one question? What would be the impact to the US economy if 2 million more individuals were out of work? What will the loss of hundreds of billions of dollars do to the GDP? Do you Mr. Stiglitz have any clue as to how many companies (tier one and two suppliers) would follow GM into bankruptcy? And you say that is what Chapter 11 is for! Has a company of that size ever been forced to that point? I am amazed at the attitude of contempt for such an important part of the American infrastructure.
Ann Arbor, MI
Nov 13 2008 - 6:12pm