Why are we bailing out the auto companies? Why not just bailout the workers? In other words, lets take the money and give it to the workers. They can use it to retrain, move to another part of the country, get more education. We live in an economy where the real value is human capital. The workers, the employees, these are also the people we care about. Left to its own devices the Detroit auto industry will shink. Ford will probably survive. Maybe a slimmed down GM. Someone will buy the Jeep brandname. The consumer will continue to have a lot of choice.
Of course, letting this process unfold has been harsh on many workers and it would get even worse. That’s why Washington should send it money to the workers. The economy will benefit short-term and long-term from an investment in protecting and educating and moving the workers. But Washington doesn’t have to get involved with Detroit auto industry management or try to decide what will the the autos of the future.
It’s human capital that needs a helping hand, not the company, not management, not the board of directors, not shareholders and not the private equity investors. Invest in people, not place.
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