Wednesday, September 17, 2008

Oh Detroit, don't think we forgot about you!

I have to admit, I didn't see this one coming: virtually every major political and American auto industry players has all but confirmed that Detroit will also get a bailout, to the tune of a $25 mbillion loan guarantee. Political considerations (Michigan and Ohio are big industrial states) meant that Obama, McCain, Pelosi, Reid have already voiced their support for the plan. After negotiations, the chairman of Chrystler said the negotiations were "successful," and the head of Ford said that "It was a great day."

Hobbled with the detritus of a failed healthcare system, a trade policy inclined towards anti-competitive protectionism, and the perverse incentives of government handouts, no loan guarantee is even going to begin to fix Detroit's, and the nation's problems. The auto industry in America is inextricably linked to the nation's nationalized road system and individual state and municipal land use regulations, and it will rise and fall based on the degree to which our laws favor automobiles and roads.

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