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Bombers and the Bailout

As far as I’m concerned, the best argument for bailing out Chrysler, GM, and Ford would be if they really were an “an essential part of our industrial base,” as claimed by Rahm Emanuel. Those with memories of World War II–when automobile plants were retooled to turn out the Arsenal of Democracy–might be tempted to agree with him. It would be hard to imagine the Allies defeating Germany and Japan without the contribution of plants such as Ford’s famous Willow Run factory which, at its peak, was turning out a new B-24 bomber every hour.

Some argue that war has changed so much that we no longer need the capacity to turn out large numbers of tanks, ships, and airplanes. I think that’s an overly optimistic assessment. Even today we don’t have enough soldiers or enough military equipment to wage all the wars we’re fighting. And when we do need new, unexpected equipment–such as mine-resistant vehicles for Iraq–they can take far too long to deliver.

We also cannot rule out the possibility of a major war in the future, one that could involve a far larger mobilization than anything we can imagine today. All you have do is think about what would happen if the U.S. were to suffer a nuclear terrorist attack to realize that we might well wind up fighting and occupying countries larger than Iraq or Afghanistan. (What if the nuclear materiel is traced back to Pakistan or Iran?) And that’s only one possible scenario. It’s not hard to think of other contingencies, such as a war over Taiwan, that could require a much bigger military with a lot more equipment than we have today.

So does this justify an enormous influx of government funds to keep badly-managed automakers afloat? Not necessarily. As noted in this Wall Street Journal editorial, automobile manufacturing in America is no longer synonymous with Detroit: “Honda, Toyota and the rest employ about 113,000 American auto workers who make nearly four million cars a year in states like Alabama and Tennessee.”

I realize those are “foreign” companies (though such designations are somewhat artificial, in an age of multinational firms). But as long as their plants are on American soil, they and their workers presumably could be conscripted in wartime if necessary. That should provide enough of a hedge in case we need to ramp up defense production in a hurry. The Detroit automakers, it seems, will have to make the case for a bailout on the economic (or political) merits, not on national security grounds.


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