The Most Stupid Idea In the World: Allow US Auto Manufacturers to Go Bankrupt

The most stupid ideas in the world continue to be peddled by free market ideologues who are suggesting that the best thing we can do for the American car industry and our economy is allow the Detroit manufacturers to go bankrupt.

After the most dramatic evidence since the 1930s of the total failure of free market fundamentalist ideology—the belief that the market should be allowed to do whatever the market does on its own, without government intervention, because that will be best for the economy—it’s amazing to still see Congress and the corporate media giving credence and air time to the junk bond ideas these market fundamentalists continue to peddle in spite of overwhelming evidence of their worthlessness and the damage they have done to the American political economy.

The only response free market ideological junk-peddlers should be getting these days is sarcastic laughter, and this especially applies to those who are arguing that the best thing we can do for the US car industry and economy is to allow the Detroit companies to go bankrupt.

Free market fundamentalism has launched us well on the way to the next great Depression, and if Congress now allows market fundamentalism to determine its decision-making about the Detroit car-makers, our political leaders will be turning the United States economy onto the surest route to the next great depression. If Congress continues to allow market fundamentalism to provide its map to the economic future, even after all evidence has proven market fundamentalism to be an ideology that has done much more direct damage to our national economy than communism ever did, we will find ourselves repeating the history of the 1930s depression in the next decade.

The surest route for US policymakers to take if they want to turn the worsening recession into a depression is to allow the Detroit auto industry, just as it is entering a period of major transformation, to go bankrupt. The bankruptcy of GM would trigger the immediate loss of millions of jobs, which would in turn accelerate the current downward spiral of job loss and economic contraction into a whirlwind the end of which could not be predicted by anyone.

This is how the recession of 1929 triggered by the stock market crash was turned into the Great Depression of the 1930s: by a market fundamentalist ideology that Hoover and Congress allowed to block decisive government action to preserve existing jobs and create new jobs to keep the economy from collapsing.

After the economy had collapsed, and Roosevelt took over in 1933, it was too late for even the most dedicated focus on job creation to have more than a limited impact on resuscitating the US economy until the production speedup of World War II jolted the economy back to life.

Fortunately, this time around, we have a new President who understands and respects history, intelligence, and the importance of job creation coming into office near the beginning of the downward spiral of job loss, instead of at its end. This means that it is still possible we could avoid repeating the mistakes of the past—BUT ONLY IF political leaders pay heed to the lessons of history and act to make sure that the spiral of job loss is not allowed to grow out of control. The surest way to allow the current job loss spiral to spin quickly out of control is to allow the US auto manufacturers to fall into bankruptcy.

While Congress has been willing to allow banks and the financial industry to be bailed out, Now—when the most important remaining manufacturing industry in the country is on the verge of failure—congressional leaders are actually allowing themselves to fall back into the stupidities of market fundamentalism, and question whether they should extend help to the anchor of the entire remaining manufacturing sector in the US. Without logic or any intelligent concern for the horrible impact the bankruptcy of the Detroit car industry would have on the loss of millions of jobs in an already spiraling downward movement of job loss, congressional leaders now seem willing to allow a major source of jobs in the US economy to disappear. And this would also, by the way, convert an already suffering regional economy in the Midwest into a disaster zone.

There could not be a worse time for Congress to fall back into the stupidities of the market fundamentalism that, by “allowing the market to be the market,” has brought us to this economic crisis in the first place. If Congress now allows stupidity and ideology to continue to rule over reason, they will allow the Detroit auto industry to fail, and they will in one fell swoop project us from a recessionary spiral into a depression-producing whirlwind.

So we must all ask and challenge our congressional leaders and the corporate media with the following question: Will they allow the stupidity of failed market ideology to rule and bring our common future to ruin, or will they laugh these stupidly shouting ideologues out of the park, and create the quiet and open space needed for thoughtful ideas and innovation to rescue us from the disastrous stupidities of the past? The choice is ours, as well as theirs. Let’s get to work—in laughing, thinking, and acting, for the sake of our common future.