Monday, December 8, 2008

Why the Public Doesn't Want to Bail Out Detroit

For months now, the American public has watched dollars flying out of the US Treasury to rescue businesses in the name of salvaging the US Economy. Billions upon Billions of them. It is politically correct to refer to this money as "taxpayer dollars" but, in fact, they are not. At least they are not the dollars of current taxpayers. No, by and large these are the dollars of the next and future generation of taxpayers.

But why quibble about that?

Isn't it interesting that when it is time to consider similar (though much smaller) bailouts for the Big 3 automakers, the public seems to have even less tolerance than we did for the likes of AIG and Citibank? Why is that when we know how big a job segment the car business represents?

Is it bail-out fatigue? Is it fear of passing a mountain of debt on to our children and on and on? Or is there something else at work here?

I submit that it is all of the above and, further, that the un-named "something else" is born of actual taxpayer experience, not something ethereal or hypothetical.

While relatively few Americans have had a personal relationship with Bear-Stearns or AIG, even Citibank or Merrill Lynch - those that have had a relationship with those companies generally report them as acceptable, if not great. On the other hand, lots of Americans have felt burned by one or more of the US automakers in their lifetime. Think of it this way - when was the last time you saw a disabled brokerage account tying up rush-hour traffic on a Friday afternoon?

Sure, there are GM fans out there, even some who don't get their livelihood from the company. My uncle was a "Ford-man" who proudly stood by the brand and its cars and trucks. Those people, like my uncle, are gone now. They have been replaced by millions of Americans who gave up on the Big 3 a long time ago and developed a relationship with Toyota or Honda or one of a dozen other foreign car makers who won their loyalty by a combination of superior quality and marketing savvy.

When my '92 Chevy died on Roswell Road some years ago, after less than 40,000 miles, I was not a happy camper believe me. Sure, I liked the car enough to spend money to fix it and drove it for almost 55,000 more miles, I never completely regained my trust in that car. And I haven't bought another American-made car since.

Is that fair to today's Big 3? Maybe not. But when it comes to buying something as big and mission-critical as a vehicle, the majority of Americans have been saying, "No" to Detroit for years. Changing our minds right now doesn't seem likely to happen. And, can you blame people?

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