Monday, December 08, 2008

The automakers

I hear that the government wants to lend the automakers $15 billion dollars. The problem with the automakers is a demand problem. Consumers are just not buying cars. Lending $15 billion to the automakers does nothing but delay the inevitable.

We could stimulate demand by taking some of these gas guzzlers off the roads by buying these old gas guzzlers and giving them a voucher for some money off a new car if it exceeded some mpg.

The government could just buy GM for about $6 billion and make structural changes to the company. Make lots of small cars.

Whatever we do, we need to make sure that whatever we do ends up making this country less dependent on foreign oil. Oil is cheap now, but it will not remain cheap forever. This country cannot be strong when it is so heavily dependent on foreign sources of oil.

Perhaps the automakers could retool a factory or two to make wind turbines to generate power. That would go a long way to reducing energy dependency and creating green jobs.