| KSig RC |
12-04-2008 05:26 PM |
Quote:
Originally Posted by WarEagle07
(Post 1751378)
Listening to the hearings on CSPAN today, I briefly caught some of the effects that bankruptcy would have on the economy. It occurred to me that a bankruptcy would be the best thing to happen to the foreign auto makers in, well, maybe ever. Cynical me was thinking that the foreign companies probably have lobbyists in D.C. lobbying against a bailout.
What I wanted to run past you all was this: If the big 3 go out of business, wouldn't demand for auto's remain the same? And if so, wouldn't the foreign auto companies, many who have factories here in the US, fill the void thereby creating jobs in the US to keep up with demand? Granted Detroit would be left in the cold since most of these factories are located elsewhere. But do you think that some of the economic damage resulting from a bankruptcy would be mitigated by the foreign companies stepping in to fill the void? It's just a thought, I don't know how viable it is since economics is not anywhere in my sphere of knowledge.
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I think there are too many external variables to assume this - under the simplest possible supply/demand model of a macroeconomy, you're essentially correct (in that other market players would expand to fill the void) in a general sense.
However, there is no guarantee that it would be cheaper or more efficient to use American workers, build new American plants, etc. rather than producing the cars in, say, Korea or Japan. Additionally, we don't know that demand would stay the same, for a variety of reasons (patriotic purchasing, general economic downturn, etc.), which limits the utility of the concept. Finally, you may be adding a ton of blue-collar jobs, but you're still out many of the other higher-rung positions, so it's an incomplete solution at best (plus, the purchase money flows directly out of the nation anyway). |
