Aid For U.S. Automakers? Really?

November 12, 2008

Obama's lead with aid for automakers is not an auspicious start.

It's hard for me not to comment on the sort of lead economic pronouncement of the coming Obama administration ... aid for U.S. automakers. To me it's right up there with Bush's opening with steel tariffs when he started 8 years ago. Let's take our least efficient, most poorly run and least competitive industries and prop them up. Great idea!

What you ought to be doing is investing into strength, not weakness. I have never understood both parties' tendencies against free trade. It doesn't make any sense. Isn't this the home of laissez-faire capitalism? Ultimately free trade leads to the greatest common economic strength. That does not mean it should go completely unfettered. We should be regulating for fair working conditions, no child labor, etc.

But we should not let special interests write regulation and we should not throw good money after bad. Will there be pain in a transition away from the weaker parts of the economy? Yes. But ultimately our economy and the global economy will be stronger because of it. Enough with the (corporate) socialism already. Free trade is GOOD. It's good for the U.S., it's good for the world. There, I've said it. How and when did it become a bad word? YES, I LOVE NAFTA, yes, I'd LOVE fewer tariffs and more REAL free trade. And remember, I'm a former Peace Corps volunteer AND Wall Street guy. So I must know what I'm talking about.

I know Hougan is going to say that I'm just bitter holding onto that GM stock over all these years. But I really believe these things. U.S. automakers have been run so poorly for so long and are so noncompetitive, that we ought to let our economy just finish its process of moving away from them.

I would love to hear your thoughts if anyone differs with me or supports me. Are index investors free traders? If you're looking at your portfolio, you probably OUGHT to be. Do you want your index to be holding GM or GOOG?



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