creators.com opinion web
Liberal Opinion Conservative Opinion
Daily Editorials
24 Apr 2014
Stoned Toddlers, Pot Mayhem Are Colorado's Wake-Up Calls

As Colorado's free-for-all marijuana experiment becomes increasingly embarrassing, the state's House of … Read More.

24 Apr 2014
Progress Toward Colorblind Society

The Supreme Court's ruling Tuesday upholding Michigan's ban on race-based preferences in state university … Read More.

23 Apr 2014
A Mental Health fix That Merits a Chance

After every mass shooting, every inexplicable attack by one stranger on another, and every time a mentally … Read More.

Give Automakers Help That Works

Comment

The collapse of the automobile industry isn't just a Detroit problem anymore. February sales reports were devastating for automakers worldwide. The once invincible Japanese duo of Toyota and Honda saw their monthly sales drop nearly 40 percent, joining Ford, General Motors and Chrysler in posting results that one industry executive, in a tremendous understatement, called "unsustainable."

Overall, the market for new cars fell by more than 1.1 million vehicles from February 2008, or a 41 percent decline.

Whether or not they work in the auto industry, the dismal posting is of concern to all taxpayers. The federal government is now a full partner in GM and Chrysler because of the more than $17 billion in government loans to those two companies. The government isn't doing enough to protect that taxpayer investment.

The most important thing the Obama administration could do to boost auto sales is to pursue a more effective policy for thawing the credit markets. Too many would-be buyers are being turned away from dealerships because they can't get car loans.

The Obama administration, like the Bush administration before it, has attacked the credit crisis in fits and starts but has yet to find the right formula to restart the money flow. Nothing it could do would have more impact on the economy than to find a fix for the credit markets.

U.S.

Reps. Thad McCotter, R-Mich., and Gary Peters, D-Mich., called on the Treasury Department Wednesday to assure that some of the $200 billion targeted to free up consumer loans actually makes it into car dealerships. They are concerned that banks are reluctant to loan the money to dealers, considering them too high risk.

The White House also missed an opportunity to help automakers in the recently passed stimulus package. The nearly $800 billion program includes tax deductions for sales taxes on new automobile purchases.

But it allowed Congress to strip out a broader tax deduction for the interest payments on auto loans. Allowing both the sales tax and the interest deductions would have made new car purchases more affordable and enticed wary buyers into dealerships.

Germany bucked the trend of plummeting auto sales in February largely because the government there offered car buyers a tax break of nearly $4,000 for trading an old car in for a new one.

Obama has taken the approach that the solution for what ails the domestic automakers is a heavier federal hand in running the companies and shaping their product line-up.

But the universal wheezing of the industry indicates there's nothing unique about the Big Three's troubles. The entire industry is on the skids.

What's needed from Washington is not more advice on making cars, but more attention to breaking the credit freeze and giving consumers stronger tax incentives for buying vehicles.

REPRINTED FROM THE DETROIT NEWS.

DISTRIBUTED BY CREATORS SYNDICATE.



Comments

0 Comments | Post Comment
Already have an account? Log in.
New Account  
Your Name:
Your E-mail:
Your Password:
Confirm Your Password:

Please allow a few minutes for your comment to be posted.

Enter the numbers to the right:  
Creators.com comments policy
More
Newspaper Contributors
Apr. `14
Su Mo Tu We Th Fr Sa
30 31 1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 1 2 3
About the author About the author
Printer friendly format Printer friendly format
Email to friend Email to friend
View by Month
Linda Chavez
Linda ChavezUpdated 25 Apr 2014
Patrick Buchanan
Pat BuchananUpdated 25 Apr 2014
Scott Rasmussen
Scott RasmussenUpdated 25 Apr 2014

30 Oct 2008 Don't Rewrite Blue Cross Law In Lame Duck Session

31 Jan 2009 Price too High for So Little

22 Apr 2010 Ashy Pall Over Commerce