"I don't see how these are going to just disappear if GM is gone. There are other car companies these suppliers can sell to."
That's your opinion, but the facts are pretty clearly against you. Listen to the radio and read the newspaper -- the suppliers are already failing. And they're not failing because there's no demand for cars (GM sold about 9 million cars last year, incidentally), but because their primary customer has stopped paying the bills. That's what the government is trying to save -- not to mention the numerous American towns that have no economy without the local GM plant.
And before you argue that bailing out these towns is the wrong solution, try to remember that the world doesn't turn on a dime. Yes, a place like Youngstown, Ohio probably needs to find a way to survive without the GM plant. But they aren't going to diversify their economy overnight, and it isn't going to help them to let their primary employer die.
So maybe you're right, and some non-zero number of these suppliers would survive a total GM liquidation. I don't know. The point is, the bailout isn't designed to save GM, so much as it's designed to save the entire economy that surrounds GM. Everyone who tries to make the calculation in terms of a cost-per-GM-head is being simple, and is failing to consider the larger picture.
"And before you argue that bailing out these towns is the wrong solution, try to remember that the world doesn't turn on a dime. Yes, a place like Youngstown, Ohio probably needs to find a way to survive without the GM plant. But they aren't going to diversify their economy overnight, and it isn't going to help them to let their primary employer die."
How much can we afford to spend on people's romantic attraction to their home town? This country's had ghost towns appear when markets collapse and industries disappear before, it could stand to see that happen again. I happen to live in a college town where the second biggest employer (i.e. not the college) is hiring electronics assemblers every week, because it's in a growing market. Why can't a few people leave Michigan and move here?
It's probably wrong to think about this in terms of Youngstown, Ohio surviving the death of GM. People can leave Youngstown.
Comments
"I don't see how these are going to just disappear if GM is gone. There are other car companies these suppliers can sell to."
That's your opinion, but the facts are pretty clearly against you. Listen to the radio and read the newspaper -- the suppliers are already failing. And they're not failing because there's no demand for cars (GM sold about 9 million cars last year, incidentally), but because their primary customer has stopped paying the bills. That's what the government is trying to save -- not to mention the numerous American towns that have no economy without the local GM plant.
And before you argue that bailing out these towns is the wrong solution, try to remember that the world doesn't turn on a dime. Yes, a place like Youngstown, Ohio probably needs to find a way to survive without the GM plant. But they aren't going to diversify their economy overnight, and it isn't going to help them to let their primary employer die.
So maybe you're right, and some non-zero number of these suppliers would survive a total GM liquidation. I don't know. The point is, the bailout isn't designed to save GM, so much as it's designed to save the entire economy that surrounds GM. Everyone who tries to make the calculation in terms of a cost-per-GM-head is being simple, and is failing to consider the larger picture.
"And before you argue that bailing out these towns is the wrong solution, try to remember that the world doesn't turn on a dime. Yes, a place like Youngstown, Ohio probably needs to find a way to survive without the GM plant. But they aren't going to diversify their economy overnight, and it isn't going to help them to let their primary employer die."
How much can we afford to spend on people's romantic attraction to their home town? This country's had ghost towns appear when markets collapse and industries disappear before, it could stand to see that happen again. I happen to live in a college town where the second biggest employer (i.e. not the college) is hiring electronics assemblers every week, because it's in a growing market. Why can't a few people leave Michigan and move here?
It's probably wrong to think about this in terms of Youngstown, Ohio surviving the death of GM. People can leave Youngstown.