There’s a lot going on this week in Washington DC and the economy. It’s challenging to follow all the strands and interpret the econo-speak and political-speak in terms of what it actually means in the big picture.
I may be off base here, but could one not interpret the current plans as bailing out the suburban American way of life — propping it up?
First, the automotive industry is also receiving their corporate welfare cheque. Atlantic Monthlyeconomic writer Megan McArdle picked up on this. Sneaking through under the shadow of the banking bail out is a gift to the big three auto makers of a $25 Billion low interest loan. Her analysis:
Yes, I favor intervention when it looks like there’s a risk of a really severe recession. But there is no such rationale here, not even arguably. It’s pure pork, with a soupcon of economic nationalism thrown in. If the Big Three can’t make autos people want to buy, then they should liquidate and open up the market to those who can.
The big three auto makers have built lobbying for roads and freeways (and the resulting way of life) part of their business plan. While other global companies make cars to fit more compact cities and higher fuel prices, the big three lobbied for cities to be built around the car. Here we go again.
Second, the banking bail out may also involve propping up suburban living — that’s where the houses in default are. If the tax payers become stake holders in a bailout, they may collectively become owners of thousands of distant suburban homes that only have value if automobile travel and highways remain subsidized by the US.
Have I had too little sleep lately, or is anyone else seeing an implication for cities of these plans?

