Detroit in dire straits...

[An easy pun: "detroit" in French means "straits"]

Massive arguments go back and forth on the auto-industry bailout, or absence thereof, in the US. I mean: the "US-based" car industry bailout, or whatever you'd call it. Seems no one is calling to bail out US-based Honda, Toyota, BMW and other factories. But to the point:
- free-marketeers, libertarians, deficit hawks and a lot of reasonable economists and other people make the (absolutely correct) point that bailing out failing industries is a tremendous waste of resources, and usually fails in the end. YES, this is true! France has had extensive experience with this in the 1980s, bailing out shipbuilding, steel and what not, mostly to very little results compared to the costs
- proponents of the bailout (an odd coalition of unions, car industrialists, some progressives though not so many, and obviously Michigan politicians...) argue that the Detroit Three have been sunk not by their bad management, bad cars, bad quality (bad work quality?), but also/mostly/whatever by the huge costs they had to bear for their pensioners, which in other countries are socialized.

Now, I find they have a point. There is no way in hell I'd buy a car manufactured in the US by either of the Big 3 (though I'd buy a European Ford or GM), but still: the US car industry used to have far more employees than it has now because ALL THE WORLD's car industry had far more. And in other countries pensions and health insurance are covered by either the State or some mutualized, nationwide scheme. Only in the US are the costs borne by the companies themselves.

There is a nice summary of the unending discussion of what is correct on this point here (the summary is not necessarily balanced, but nice nevertheless). But my point is:
- it is extremely unlikely that the bailout would do any good on the long term - it would probably be a huge waste of money - and probably there are far better ways to use this money to ease the pain for GM and Chrysler employees (seems Ford should survive)
- BUT if America wants to avoid this kind of mess in the future, looking at universal health care and another pension system could be interesting.

By the way: too late to discuss this today, but fascinating to see that so many on America's right still think that the US would get worse health care if there were a national system. The US spends far more on health than France or Germany, but gets distinctly worse health results. Interesting...