When Paulson first tried to pass of his 3 page plan (loosely: "hey! I know! Why don't you give me 700 billion dollars to do with what I want, without any oversight at all?") that should have raised big red flags. He has no business doing what he is doing. Bailing out corporate failures is a mess, and the package is a very expensive mistake.
It's not going to work to try to make the banks lend out this free money. Duh, they were failing at their jobs, so we gave them our money to throw after it? No really, here is some very good explanation of why it isn't working. Article 1, and its follow-up. Of course, it is more complicated than those two articles, and I recommend anyone interested in economics take to reading that blog more in-depth for excellent and usually very readable analysis.
But, this new thing? This automaker thing? Outrageous.
The other day I bookmarked something I wanted to write about (found via Boing Boing Gadgets). It's a Business Week article titled "The 65 mpg Ford the U.S. Can't Have" and the gist of it is, Ford has a clean-diesel car in Europe that gets 65mpg, but they won't bother with it here because Americans don't want diesel. Production and import would be expensive, and, they say, "We just don't think North and South America would buy that many diesel cars."
Fucking ridiculous. These American automakers will not bother with new tech, they won't bother with trying to sell better engineering to Americans. They just want to continue to suck out loud, and then they want us to give them money to continue some more. Why? So they can keep producing SUVs?!?!?
Ironically, the day before I read this, a coworker sat and chatted with me about the new car he is on the waitlist for. He canceled the car he had ordered when he heard about this great new one, a clean-running diesel that got something like 65mpg! From? oh, some European carmaker.
Thanks, Big Three.
Then, yesterday, also via Boing Boing Gadgets, I saw this article in Forbes about Honda. Really, it's a great article, and worth reading about a manufacturing company where engineering rules and problems are there to be solved, with weird angles if necessary:
"But there's nothing HondaWhy can't our Big Three invent? Why do they refuse to do anything but throw money at marketing SUVs that are good for nearly nobody?
hates more than waste, and there is nothing Honda likes more than an engineering problem. Indeed, how else to explain why Honda has studied the maddeningly evasive cockroach (for anticollision technology), decoded the rice genome (to increase crop yields and create more-productive crops for biofuels) and developed a robot that can get instructions by reading human brain waves (to learn how machines and humans can better coexist)."
More importantly, why should we throw money after them? They should fail, so that new ideas can come in their place. Capitalism may or may not be the best system, but it will not work at all if bad companies are not allowed to fail. What reason do they have to change? What evidence do we have that they can change? If they are propped up by our precious few tax dollars, we will be dragged down with them as we waste our money on investing in the past rather than the future.
PS: you agree? Go here, and contact your congresscritters