ON ABANDONING OUR AUTO INDUSTRY

Roger Cohen is against helping the sinking auto
makers. In the NYT (Op Ed. 12/17/08) essay
"Pan Am Dies, America Lives," he recalls fondly
the glory of a great airline, and sadness at its de-
mise. But life goes on, he writes. And new airlines
came on to replace the old. The same will happen
with car making. No big deal. "Nobody subsi-
dized U. S. Steel or the auto-maker Packard in
the belief that the world without them was un-
thinkable," he argues.

He has no inkling of the depth and seriousness
of the international catastrophe now enveloping
the financial world. The European economy is in
crisis, as is that of Japan. China is also facing major
problems. In letting our car industry go under, he
is assuming that market forces will produce some-
thing better to replace it. What is really at risk how-
ever is not just one industry, but all of them. It's
systemic: first went housing, then hedge funds, then
banking and insurance. And now it's autos. What
next? If autos go, the domino effect spreads like a
crack in a windshield.

Doesn't the above list suggest a general deteriora-
tion going on that is a lot more serious than one or
two car companies going broke? The house is on
fire. Do we let one room burn, oblivious to its con-
nection with others?

What's crashing is the world-wide economic system.
As I wrote in the last blog, George Soros wrote in
1998 (The Crisis of Global Capitalism): "What I pre-
dict is the imminent disintegration of the global capi-
talist system." That's what's happening! Paul Krug-
man gets it, as does Robert Reich and others. Ger-
many is blocking the fire engines trying to fight the
conflagration in Europe. Mr. Cohen, in objecting to
rescue operations here, is ignoring the global extent
and the potential destruction of this melt down.

The death of our auto industry will leave a hole in
our economic dike through which will pour a flood
of foreclosures, bankruptcies, and welfare costs.
Mr. Cohen doesn't mention the $570 bn. Defense
budget, about three quarters of which is wasted.
It's main justification is that it's a jobs program.
Along side the defense budget, $15 bn in a loan
for cars is chump change. But it's absolutely essen-
tial, not only to folks in that industry, but to keep
all our heads above water!