College Republican Federation of Virginia

Madison warned in Federalist 10 against the undue influence of faction, how it undermines the public interest and clogs up democracy.  If any more evidence was needed to demonstrate Madison’s prescience, the current debate over bailing out floundering US automakers is it.

The question of whether or not Detroit should get bailed out too should, on its face, be easily answered.  No, they shouldn’t.  Their failures are largely their own fault.  They don’t make quality products, continually buckle under union pressure, and generally fail to innovate and meet consumers’ demands.

But there is far more at work here than simple bad business.  American automakers have, for years, been forced to adopt uncompetitive, unprofitable business practices by a vicious confederacy of interest groups who care nothing for our economy.  Unions, environmentalists, and ham-fisted politicians have slowly been killing the US auto industry for decades, all the while cynically blaming Detroit for doing exactly what any business would do under such circumstances, fail.

Detroit has been forced, by years of capricious environmental and labor standards, to produce either low-quality cars no one wants to buy or silly environmentally-friendly cars they can’t afford to sell.  Now, these same factions are at it again, but this time they want to do it on our dime.

$25 billion dollars has already gone to help US automakers build cars the public doesn’t generally want.  The Chevy Volt? Really? A car that needs a cord is only going to go so far.  The enviro-nuts have finally forced the auto industry to commit harakiri, browbeating them into making cars for which there is insufficient demand.

Do some people buy hybrids? Yes. Will some buy the Volt? Sure. Will enough of them? No. The car doesn’t meet the demands of most Americans, plain and simple.  Just like every other hybrid, they fit a small niche and that’s it.  They’re prohibitively expensive for Detroit to make and they don’t perform siginificantly better than your average passenger sedan. 

Seriously, they cost more at the dealership, for really negligible beneift, unless your a polar bear or a UAW member.  55 mpg is great, but is it worth an extra $10,000? No, for most families it obviously isn’t.  And it’s useless if, God forbid, you work for a living.  Ever seen a plumber driving a Prius? Thought not.

The government has failed to create sufficient demand for these cars.  God bless them they tried, but it didn’t work and that failure should come as no surprise.  People buy what they need before they buy what they want.  If they need a truck, they are going to buy one. If they need a minivan, they are going to buy one.  If they need a small car, and they can afford a hybrid, they might buy one. Then again, they might not. Lot’s of factors influence consumer choices, not simply trendy fuel efficiency.

Detroit should not get a bailout, plain and simple.  Bailing them out is like giving a cancer patient a Ferrari.  It might seem like a magnanimous gesture, it might make them feel better, and they might even be able to use it, but it isn’t going to cure them.