As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Thursday, March 05, 2009

How Long Must We Sing This Song?

This GM report really doesn't offer a lot of hope that they can survive. They're borrowing money to pay their bills. It's impossible to become profitable once you start down that road. We can react in one of two ways. We can pump money into them to prop them up, or we can structure a bankruptcy that isn't really called bankruptcy, which might take down a lot of suppliers in the process since they'll see less revenue from outstanding bills with GM. Chrysler is probably in worse shape, by the way.

I just don't know if enough consumer demand for automobiles is going to ever return to the degree it would need to bail GM out. And just because we're propping up zombie banks and it's wrong, that's not a good enough argument to say that we have to prop up the automakers too. I'm genuinely conflicted by this. The consequences of the failure of the auto industry are massive and could unspool the entire manufacturing economy. Yet their viability is severely threatened and it's unclear if even an AIG-like series of bailouts will make a difference. Clearly, if the government would stop giving the banksters every dime they want, there would be some more capital to work with. But it's all China's money, anyway.

This is just a really frightening time.

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