How to save the auto industry...
I'm not a fan of giving people my money, especially when they have not managed their own money well. But it's going to happen.
QUESTION: How can we bailout the automakers without simply giving more money to the fat cats?
ANSWER: Give the bailout money to consumers instead.
My plan is to offer a $6,000 tax rebate to anyone who will buy a new car made in a US factory. There is one catch, they have to trade in a car at least seven years old and the old car must be recycled by the dealer, not resold. Put that old junker in the crusher.
I like this plan for several reasons. One is that the auto industry will still have to compete for business and competition is always good. This plan also takes cars off the market by replacing older, less efficient cars with new cars that will get better gas mileage. That makes it green. It also sends the bailout money to folks with old cars instead of auto executives who don't have a good track record of management. I have faith in the average American's ability to shop wisely with that $6000 incentive. Competition for that money will be good for the industry.
There's one more thing this plan does, it impacts showrooms all over the country by helping consumers buy cars that would otherwise sit around. How many cars? Every $10 billion in bailout bucks helps to sell 1.6 million cars all without red tape or any skimming off the top.
- pnelson's blog
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I feel compelled to comment
I feel compelled to comment on my own post made here some eight months earlier. It turns out that the Obama administration did use an idea like the one I posed, the Cash for Clunkers program. There is a big difference between what I proposed and what actually happened. My plan did not include giving billions of dollars directly to car companies to buy them out and take over management. My plan was to give incentives directly to the tax payers.
It's an interesting contrast with one idea that empowers the average tax payer, stimulates competition and promotes business vs. what happened instead, a government powergrab, billions of money disappearing into the hands of unions while the average investor was left with pennies on the dollar. And just why did Obama close so many dealerships? Power corrupts and this smacks of absolute corruption to me as the government gets more and more involved. So in retrospect, I see it was naive to think the government could just give us some of OUR money back to help stimulate a troubled industry.
"Don't worry, we're from the government, we're here to help."
When will we (I) ever learn?
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