Senator Dodd Sells the Auto Bailout on Face the Nation

Senator Christopher Dodd was on Face the Nation last Sunday, arguing for a bailout for the automobile industry.

There’s a credit issue, here, that we’re not really talking about. Consumers cannot buy cars. You have to have a rating -- almost a perfect credit rating to go buy an automobile today.

--Senator Dodd, emphasis added.

Senator Dodd accidentally hit on the main problem. The unstated premise is that consumers have no money. The problem is not lack of easy credit to allow people to buy stuff even if they’re broke. In fact, easy credit is what got us into this mess. The root problem is people being broke.

It’s a moot point, but I disagree with Senator Dodd’s claim that it’s hard for people to get into debt these days. I’m pretty sure if you’re broke, have a job, and have a small down payment, a car dealer can arrange financing even without a perfect credit record. It blows my mind that the US Senate is working on helping to get people into consumer debt.

At another point arguing in favor of a bailout, Senator Dodd claimed that one in ten jobs in related to cars. That certainly sounds plausible to me. Think about what that means. One in ten of us spend a significant portion of our labor maintaining one portion of our transportation system. I would think if we put our minds to it, we could find other means to get people where they need to go without 10% of working society’s effort. If we had a more labor efficient system of transportation, some of that 10% could be making more toys and gadgets, distributing food and education to the needy, or whatever the economy demands.

I am not saying there should be some massive government takeover the of the transportation system. I’m simply saying our current system is not that efficient. Having one in ten of us working on it is not something to be proud of and is not something to use billions of dollars of government money to continue. 10% is a lot of effort to spend, not event counting a potential bailout, on something that results in tens of thousands of fatalities a year, time wasted in traffic jams, and all the indirect costs such as road rage, sedentary lifestyle, and detachment from communities. I don't want to spend any government monies propping up this system.