Congress has approved $25B in loans to help automakers build more fuel efficient technologies using new technologies. It's contained in the Budget Continuing Resolution (which keeps the US government running through the end of 2008). The loans are intended to finance retooling of existing manufacturing facilities. Right now, it's heading to the President for his signature.
Innovation or indirect subsidy?
With awareness of the larger financial bailouts on Wall Street taking place by the government right now, doe this strike you as a legitimate way to help struggling firms (almost crippled by legacy costs for healthcare and pensions) or an example of government "cherry-picking" firms and industries to keep viable?
This, by the way, represents the first government intervention (in the auto industry) since the Chrysler bailout in 1980.
So, which do we have here? A boost in the arm for an industry that is having a difficult time maintaining an competitive edge? Or a bailout? Has this become a pattern for government--or are we just facing extraordinary times right now?
I'd love to hear some opinions on this.