by Roger Prather

Created on: December 07, 2008

About three miles from my in-law's house, someone has a Chevy Suburban in their driveway with a "For Sale" sign on it. No doubt, the owner of that Suburban had serious second thoughts when gasoline hovered around $4.00 per gallon for months. The Suburban has been sitting in that driveway for about a year now. Apparently, the would-be buyers around town also are having second thoughts about owning a vehicle that was, at one time, the perfect family vehicle. This circumstance is exactly what should be happening in Detroit and car dealerships around America. Automakers are having second thoughts because Americans are second guessing the value of gas-hungry cars. Congress should not bail out the automakers because the market decided their priority products weren't worth buying. Instead, Congress should allow the market to guide Detroit back to profitability or to failure. They should do this because, in the end, this is what will be best for consumers.

The case for an auto industry bailout that is being sold to the public is that the financial crisis in America is affecting automakers because Americans are unable or unwilling to spend money on their products. However, the fact of the matter is that since the 1990s, the Big Three have aggressively marketed trucks, SUVs and other large automobiles with low fuel economy. At first, this was a successful strategy for these companies. Gas prices remained relatively low during the 90s and into the early 2000s. After 9/11 and after the beginning of the Iraq war, gas prices began climbing. As costs reached the $4.00 mark and stayed above $3.00 for over a year, consumers began selling or trading in their Suburbans, Excursions, and eight-cylinder pickups for smaller, often foreign-made alternatives with better fuel economy. Consumers stopped buying the eggs in the automakers' baskets.

This phenomena is a perfect example of a free market at work. Consumers made choices that benefitted them economically. Because the automakers made choices that were not in line with consumers' wants and needs, the automakers suffered. Now, the automakers are pleading their case to Congress. If they go out of business, the bedrocks of American industry will be gone. Workers will lose jobs. The economy will further decline. Point blank, it's all hogwash and Congress and the automakers know it. The bailout package being considered in Washington is nothing more than government taking taxpayer money to hand it out to someone else that didn't earn

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