A Detroit Bailout?

The Wall Street Journal's weekend edition carried an article by breakingviews.com contending that the US automakers headquartered in Detroit are seeking government aid during this Presidential election as a way of avoiding bankruptcies.

For what it's worth, the column agreed with my overall diagnosis of the auto sector in its entirety, even down to the detail of noting that the Carter-era bailout of Chrsyler was not a success. Instead, the company faltered again in the mid-1990s, selling itself to Daimler.

It amazes me that Ford and GM would have the gall to ask for government assistance when they caused their own troubles. Further, to use an election year as an opportunity to effectively hold Michigan votes hostage to the candidate who promises the most financial aid to the companies is unseemly and wrong.

Hopefully, either or both major party Presidential candidates, if forced to consider paying some form of electoral extortion, will focus on aiding the displaced workers of the companies, not the companies themselves.

Whether it's airlines, steel, auto making or even banking, our government needs to stop even entertaining the idea of assisting failing companies.

Our economic system works through rewarding successful business models and using the resources of failed companies- people, physical plant, intellectual property- as material for new growth. We must let capital and consumer markets judge the management of companies via sales and equity prices.

There are growing, successful auto makers in the US. They have names like Toyota, Daimler, and Nissan. We need to allow them equal special treatment with mismanaged auto makers, which is to say, none.

If Washington will stay out of the way, the valuable parts of Ford and GM will find their way to ownership by other global auto makers, and the workers who can add value will also remain employed.

The rest will and should be liquidated to provide resources for fresh growth in the US economy.