The taxpayers have already bailed out lenders and insurers, and they’re about to rescue automakers, so why not try to save other industries that have been run into the ground? That was the attitude of ABC’s “World News with Charles Gibson” on Nov. 11.
ABC correspondent Chris Bury weighed the good and the bad of the proposed auto bailout – aimed at helping General Motors (NYSE: GM) with as much as $75 billion in taxpayer money. The segment featured an industry group representative and a business journalist.
“I believe in creative destruction,” Farzad said. “Out of the ashes of an industry in ruins, something else will emerge.”
David Cole, director of the Center for Automotive Research, said the auto companies were too big to fail and the damage to the economy would be too great if they did.
“The cost of keeping the industry going is a lot less than the cost of failure,” Cole said.
“The bailout could cost taxpayers up to $75 billion, but letting a big automaker fail could cost the American economy $175 billion in lost income and taxes the first year alone,” Bury said, citing statistics from the pro-bailout Center for Automotive Research.
“Those tumbling dominos – from dealers to parts makers to ad agencies – employ more than 2 million Americans,” Bury said of the businesses impacted should GM be allowed to fail. But once the precedent is set, many industries could make a case for a bailout, including part of the news media. “If we’re bailing out autos, why not
Farzad explained the
Cole, who represents the car industry’s failing members, didn’t want to focus on responsibility for bad business practices. “Regardless of who is to blame, forgetting about that, what’s in the best interests of our economy?” he asked. “What’s going to cost less for you and me as taxpayers?”
“Capitalism is brutal,” Farzad said. “And these shifts that happen once every or twice every generation are never friendly. But ultimately the government has a decision to make.”