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Bankrupt US Auto Makers and The Railroads
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<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><FONT face="Times New Roman" size=3>My point was only to present Bill B. with the possibility that the evil U.S. auto companies might not go down in flames.<SPAN style="mso-spacerun: yes"> </SPAN>Actually I see only two possible scenarios.<SPAN style="mso-spacerun: yes"> </SPAN>One is that we bail them out and they continue to limp along until they soon require another bailout.<SPAN style="mso-spacerun: yes"> </SPAN>And then the argument will be that we have sunk $25 billion into them and that will be lost if we don’t sink another chunk of money into them.<SPAN style="mso-spacerun: yes"> </SPAN>That road obviously leads to a nationalized car making industry—another trophy for the central planners.</FONT></P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt"><FONT size=3><FONT face="Times New Roman"></FONT></FONT> </P> <P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN style="FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman'; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA">The other scenario is that they go bankrupt, reorganize, and continue as private enterprise.<SPAN style="mso-spacerun: yes"> </SPAN>Although it may not be possible for them to compete even if reorganized, given their pension fund overhead.<SPAN style="mso-spacerun: yes"> </SPAN>Losing them and all the jobs would be bad for all of us, but that horse has left the barn.<SPAN style="mso-spacerun: yes"> </SPAN>On the other hand, I think a bailout would be worse for all of us.<SPAN style="mso-spacerun: yes"> </SPAN>But having said that, I would bet that we are going to bail them out because the camel wants to get its nose under that tent.<SPAN style="mso-spacerun: yes"> </SPAN></SPAN></P>
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