The Thinking Press

Drip. Drip. Drip.

This morning, an otherwise beautiful wintry Friday morning, brings with it something far more chilling than any cold front. With the failure of the big 3 automotive bailout in the United States we look forward to an economic outlook more imperiled than any we have seen in generations. It is not simply two, or three, car manufacturers that we stand to lose in this endeavor but an entire sector of our economy. The automakers keep an enormous amount of smaller manufacturers and suppliers in existence, without them entire swaths of the American country side will be wiped clean of an economic existence.

Senate Republicans, who seemed to forget their moral objection to bailouts when it came to spending $700 billion on the financial sector just a month or so ago, decided yesterday that opposition to a $15 billion dollar bailout of the critical auto industry was unwise, saying it would be a “huge proposal” and would be rewarding failure.

Senate Democrats, and their counterparts in the house, have warned that grave economic consequences could be faced with the failure of even one major American automaker. The AP reports that as many as 3 million American jobs could be lost with the failure of the American automotive manufacturing base, and could bring about what President-Elect Barack Obama warned could be a “devastating ripple effect” on an already weakened economic outlook.

The Broader Context

Marc Ambinder, at the Atlantic, wrote yesterday in his article The First New Foreign Crisis about the increasingly dire outlook from some of the nations leading economic minds. He describes a world that could face systemic economic failure and the collapse of a number of unstable countries around the world, including those such as nuclear armed Pakistan, if the economic environment does not improve.

The President-Elect has often said that things “will get worse before they get better” but to what extent that may occur is not clear. One thing is remarkably clear, however, and that is we must find a way to shore up the jobs of 3 million American careers or face the worst meltdown of the American economy in many decades.

More to come.