Managing motor city

The recent economic crisis has made Detroit the economic flagship of America. It seems as though any story you read about the economic crisis mentions Detroit as a cautionary tale. And when I say Detroit, I really mean America’s failed auto industry.

The U.S. government is trying to take control of the auto industry. President Barack Obama has started implementing policies if the industry is to receive any more bailouts. It’s a bad situation for big businesses that like complete control over company policy, and a bad thing for taxpayers who like money in their pockets and not those of big business. But despite those bad outcomes, government regulation, in this case is a good thing.

The government holding a bailout over auto industry CEOs’ heads makes it so that the CEOs must allow government control over their capitalist empires. Yes, irony abounds. But if the government fails to take control of the auto industry, thousands of people could lose their jobs over the coming months.

President Obama has already denied Chrysler more bailouts because he and his advisers didn’t like the company’s plan. He thinks that the CEOs don’t fully comprehend the crisis that we are in. He rejected Chrysler’s plan because he didn’t think they were doing enough to change things as drastically as they needed to be to make the company viable in the future.

Since then the federal government has called for Chrysler to merge with Fiat. Obama’s administration has essentially forced General Motors CEO Rick Wagoner to step down.

When President Obama first bailed out Detroit I was appalled because he was investing taxpayers’ money in a failed industry. He not only made the investment but he used the bailout to give the federal government a little push and pull in Detroit.

President Obama needs to flex his muscle in Detroit. Because it’s not his investment, it is your parents’ investment, your professor’s investment and, if you pay taxes, your investment. It’s those investments that Obama is protecting and should continue to protect.

Sure, bailing out the auto industry was a bad decision, but at this point we have to be all in and make the best out of a bad situation. And that is what our president is doing. If I am going to give the auto industry money I want to know that I will get a return on that investment. In order to get a return, the industry has to change substantially and that is what Obama is pushing for.

Government control over business is against capitalistic ideals, but at this point it’s a necessity. Ideally U.S. policymakers would have never bailed out the auto industry to begin with, but they did. Obama has likened his policy to FDR’s legacy, which hinged on big government. Both presidents dealt with a severe economic crisis and both presidents’ solutions are based on the government having more control of the economy. Which is exactly what we need right now.