By: Li Bin Chen
Bailouts fund from the government are only used toward United States based company. In the auto industry, the companies that qualify for the bailout fund are Chrysler, Ford, and General Motors. One irony of this rule is that Toyota and Subaru are United States’ largest employer of the auto industry and they do not qualify. In today’s globalize world, it is hard to draw a line whether the company is U.S based or from a foreign country. The owner of the company may be from multi-national making it hard to make a judgment so most of the separation will go back to the origin of the company.
Is it fair that some company will get the bailout fund while others will not even if those companies contribute to the larger portion of America’s employment? While every auto-producing nation is engage in an auto bailout, Germany presents a different view. Germany has yet to engage in a bailout because they believe it will only lead to distortion and protectionism and that market will take care of itself.
But will the bailouts work? It might work, but there’s no guarantee. The government is trying to tackle a systemic financial crisis with a system wide purchasing of problem assets. By removing uncertainty about impending mortgage-related losses, the government hopes to bring confident into the markets and encourage the banks to keep lending and get new infusions of private capital.
No comments:
Post a Comment