Cato Senior Fellow Daniel J. Mitchell participated in a debate yesterday on NPR.org that discussed the possible implications of a government bailout of the U.S. auto industry. Mitchell argued against it, and in the middle of the debate, NPR held an online poll that showed that 68 percent of listeners agreed with him.
Quotes from Daniel Mitchell pulled from the debate:
- Consumers, acting in the marketplace, should determine which companies succeed or fail. Business success should not depend on which companies can hire the slickest lobbyists.
- Every dollar the taxpayers send to Detroit will be one less dollar that will be available in the productive sector of the economy. This means fewer jobs in other industries, fewer jobs in the service sector, and fewer jobs in all other fields.
- A federal bailout deprives other sectors of the economy of resources. Moreover, a bailout delays the much-needed restructuring of the US auto industry, much as handouts to the proverbial worthless brother-in-law enables him to continue sitting on the couch all day instead of putting his life back in order.
- Foreign companies with plants in America are much more successful. It baffles me that politicians want to reward incompetence. Actually, it's not that surprising. Detroit probably spends a lot more on lobbyists. Too bad they don't put an equal amount of time and effort into improving their goods and services.
- I don't care if the bailout is profitable for government. The economic damage occurs because politicians interfere in the allocation of resources. Government intervention is a big reason why European welfare states grow slower, have higher unemployment, and lower living standards than America. We should not emulate nations such as France and Germany.
- Five years ago, a merger of GM and Chrysler would probably be killed by the antitrust bureaucrats. Now the politicians want to subsidize the merger?!?
- Bankruptcy almost surely will make consumers a bit more wary, but a bailout ensures that the auto companies won't change the bad policies that got them in trouble. Better to restructure now. You don't cure an alcoholic by giving him more to drink.
You can follow the entire debate here.