President Obama and the Auto Industry

I will admit that I am not a big one for economics.  I took macro and micro in college but that was 25 years ago or so.  Still, I have to say that I just listened to President Obama and his take on the auto industry.

 

I understand how Obama may feel that General Motors is too large to fail.  I also realize that those who are employed extend far beyond Detroit.  There are parts manufacturers, dealers, financing companies.  The number of jobs that are lost in the US economy for every auto industry job that is lost in Detroit is an additional 9 I believe.  

 

My problems with what President Obama had to say today evolves around throwing good money after bad.  Why pump additional funds into any auto manufacturer if you are discussing bankruptcy restructuring in the same breathe?  Also, Obama spoke in relatively broad terms – “enough operating capital” for 60 or 30 days.  By whose estimation will this dollar figure be arrived at?

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