Monday, December 15, 2008

I'm Torn...

We know an economic crisis has hit and has not done with us yet. On the one hand, we have those who advocate a large financial stimulus package, in particularly, a bailout of the Big 3 auto makers. On the other hand, though, we have those, and there does not seem to be that many, who propose to throw little, if any, money at the economy. Both arguments appear to have sound reasonings.

Two Yen commented on Paul Well's blog that Japan tried this type of infrastructure stimulus with little success and much in debt, to the point where they have little wiggle room in which to contend with the latest crisis. Another blogger discussed the fiscal prudence of the German government under Chancellor Merkl, which has not jumped aboard the apparent one-upmanship of stimulus spending announcements. Who knows which approach will work in the long term?

I happen to think that, given the two disparate views, there must be something in the middle. I don't want to see my tax dollars thrown after bad and can understand the reticence of those who do not support a stimulus package for the auto makers. The market conditions suggest that the companies should be left to find their own way, possibly resulting in a reduction in the number of North American manufacturers.

On the other hand, there are thousands of anciliary jobs that are going to be lost if these companies close. While I have a problem with company executives going home with millions in salaries and bonuses even when their companies are losing hundreds of millions, I have a lot of sympathy with the workers and their families who will be out in the street.

Some suggest that the stimulus package should only help displaced workers and not the auto makers, through EI payments and retraining. Others want to use the $3.3 Billion to prop up these companies in order to keep people working.

Here's an idea: if money is made available for them, let's put on conditions, such as, no company executive will benefit financially from the stimulus, all money will go to retooling the production lines to smaller, more fuel efficient and environmentally friendly vehicles.

Keeping in mind, of course, of who is next in the line for a handout....

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