I'm someone who has the failing, as I think a lot of us do, of becoming more intractable in my positions the more I argue about them. I can be quite stubborn, sometimes. But then you knew that!
Many smart people are arguing against the bailout, and I need to say at this point that I feel it is an open question as to whether or not it is a wise or prudent move. But there's a lot to attend to about it that I think is getting squeezed out of the discussion.
First, I think we should be pessimistic when it comes to trying to gauge the financial impact of not bailing out the Big Three. I think even those least disposed to supporting the bailout would admit that we are going to have some major financial damage if these huge companies should fail. There isn't going to be a happy ending to this, no matter which way we turn, and I think those who are opposed to the bailout should be careful not to minimize the kind of damage we are going to see. These companies cast long shadows. Paul Krugman argued on the This Week yesterday that the automakers could not pursue Chapter 11 bankruptcy, because of the lack of available credit, and would have to slide into Chapter 7, liquidation. To me, that's a huge question. I'm much more supportive of a bailout if the alternative is Chapter 7, than I am if the alternative is Chapter 11.
In the unlikely but definitely possible event that we're talking about real liquidation, we're in for some very tough times for a lot of people, and a really discouraging unemployment situation. That may, in fact, be the case no matter what-- as my peers have been telling me, we might merely be taking jobs from others by bailing out the automakers. In any event, a real collapse of any or all of the Big Three is going to result in a lot of people without jobs. That may actually be a bit of a happy coincidence, because we are in a unique time in American politics, in a position where a very broad range of economic thinkers agree that we need some sort of government driven stimulus, and specifically a jobs stimulus. My question is whether those opposed to the bailout would be amenable to a broad retraining and jobs program for those displaced by GM failing-- for both blue collar and white collar employees. (Management has mouths to feed too.)
If the problem with bailing out the automakers is really just basic insolvency, then I would think many would indeed be sympathetic to a real jobs program for these people. After all, we're talking about the same sort of thing even absent the collapse of one of the American automakers. It does seem, from my uneducated perch, that many people not ordinarily disposed to government intervention in the economy are supporting a major government stimulus. However, if someone is a dedicated proponent of the free market, the are unlikely to enjoy the prospect a major government push for retraining and job growth. That's also large government expenditure, it's also introducing government inefficiency into the system, it's also an affront to free market principles.
Many people are saying "well we've got to do something," which makes my trick knee act up-- usually when you're saying that you've got to do something, anything, you're in bad shape. Then again, that pretty much seems to be the way the wind is blowing no matter how you cut it.
I know attaching the "green" term to any old thing is an annoying and shallow practice. It does seem like we have a really unusual opportunity, though, where we have a pressing environmental problem, a need for a big public expenditure to stimulate the economy, and the political will to really undertake a major infrastructure project. No government expansion of public transit and clean energy production is going to be perfect, but I think this is a real opportunity to make some strides, both environmentally and in job creation.