Analysis: The American Auto Bailout

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The American Auto Bailout: Triumph or Tragedy? In 2008, two of America’s largest auto manufacturers -- GM and Chrysler -- were on the brink of bankruptcy. This came at a time when the American economy itself was in crisis. It was hemorrhaging jobs at an alarming rate -- nearly 800,000 per month. When President Barack Obama took office, he was faced with the grim reality that two of America’s largest car manufactures were near extinction. His administration responded to this reality by enacting a plan to circumvent this fate. Today, the administration’s course of action is still a contested topic, and many Americans continue to argue whether the auto bailout was in the best interest of America. The President recognized…show more content…
Sowell proposes an alternative outcome -- that the downfall of GM and Chrysler would set the stage for new “rising stars” in the auto business, such as those companies that are engineering more fuel-efficient vehicles. In this way, human resources would be employed by businesses poised to, “carry technological and organization creativity forward, raising standards of living in the process” (Sowell…show more content…
They express alarm over the fact that capitalistic principles were violated by the bailout and that the federal government overstepped its bounds. They condemn the fact that irresponsible business practices were rewarded by a government handout. Finally, they further their argument by proposing that the natural flow of a free market economy, which relocates resources to where they will be most productive, was stemmed at the cost of the advancement of new, innovative businesses. These vastly different views have been well articulated and argued extensively by their proponents; however, this question still calls for a definitive answer: was the auto bailout in the best interest of America? Works Cited and Consulted Biden, Joseph. “Resurgent American Auto Manufacturers Signal an Economy on the Rise.” Washington, D.C. 28 May 2011. Address. Douthat, Ross. “The Great Bailout Backlash.” The New York Times 25 Oct. 2010: A27. EBSCO. Web. 21 June 2011. Harris, Jerry. "The World Economic Crisis and Transnational Corporations." Science & Society 74.3 (2010): 394-409. Academic Search Complete. EBSCO. Web. 24 June

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