Jeff Sachs makes unpersuasive arguments for bailing out the Big Three in Detroit:
First, this is an opportunity to embark on a major industry restructuring to position the United States to lead the world in producing cars that get 100 miles or more per gallon. This achievement is closer than many suppose, with the pathbreaking plug-in hybrid Chevy Volt set to arrive in 2010 and several new hybrid models on the way. American-made fuel-cell cars may be a large-scale reality within a decade. Success would dramatically improve energy and national security, climate security, and U.S. global competitiveness, and a public-private partnership is needed to bring about this transformation.
Questions for Professor Sachs:
- Why is it important that fuel-cell cars be made in America?
- Why do American-made fuel-cell cars need to be produced at plants owned by domestic parent companies rather than foreign-owned US plants located outside Detroit?
- What does “US global competitiveness” mean in this context?
Mark Koyama is harsher but puts it more succinctly: “Is this article by an economist?”
I guess Sachs uses “US global competitiveness” cuz he wants to convince politicians…
And about the Koyama comment, shouldn’t economists be concerned about other factors than an optimally efficient international allocation of production when considering the consequences of a dying US auto industry???
I think it would be socially optimal if all this industrial structure was transformed instead of scrapped and maybe only the state can make this happen…
this doesn’t mean I’m ready to buy an American car instead of a japanese yet!