Detroit Bailout

In: Historical Events

Submitted By patte485
Words 2297
Pages 10
Mackenzie Patterson
2008 U.S. Automaker Crisis: The Detroit Bailout
At the end of 2008, two of the three largest domestic automakers in the U.S. received significant financial assistance from the federal government and President Bush’s administration. General Motors and Chrysler were burning through their cash reserves and heading quickly towards insolvency and potential bankruptcy, endangering not only themselves and their workers, but also the large domestic auto parts supplier industry as well. Insolvency had the potential to permanently alter and possibly destroy a large segment of the U.S. industrial economy. In an effort to avoid this, the federal government stepped in with highly controversial assistance in what is now generally referred to as the Detroit Bailout. The question then, as continues to be debated to today, is should the federal government have stepped in and provided help, or should they have left the free trade market alone? There are many opinions and multiple ideologies in the U.S., but which ideas are going to work? These were very difficult decisions that needed to be thoroughly analyzed and debated, however, the urgency of the situation, along with a general collapse in world financial markets led to events quickly overtaking prudence. In the United States, the country is roughly divided into too ideologies, free-market liberalism (conservatives), and social liberalism (liberals). This led to both free-market liberals and social liberals having opinions and making decisions that did not necessarily fit neatly within the general platforms of the Democratic and Republican parties.
After dominating the world for much of the 20th century, General Motors, Chrysler and Ford were on a long, downwards decline; their cars were not competitive with foreign manufacturers as they cost too much, the quality was lower, they were too large, and…...

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