Why bail out incompetent greedy companies with ‘green’ subsidies?

Last week George Bush announced a $25 bn bail-out loan for US car manufacturers to help them meet the costs of surviving a difficult time for the industry, and to help ease the transfer to producing greener models and technologies that meet new government guidelines on emissions and fuel economy. European firms are already pressing for a similar £30 bn loan over here to match the US’s action.

(For a full outline of the breakdown of the loan structure and the history of the automotive industry’s persistent failure to meet green targets see George Monbiot’s excellent piece at Guardian Online).

Amidst the current talk of $700 bn payouts to the US banking sector and similar proposals here in the EU these figures bizarrly seem quite modest due to the strange distortion of what constitutes ‘a lot’ (in terms of government assistance to failing business) these days.

It seems amid these ‘abnormal’ times its acceptable to rob the taxpayer blind under the excuse that we are experiencing a crisis in which everyone is a victim (including big business, and big finance) requiring the execution of some sort of political ‘executive power’ - which actually equates to throwing huge sums of taxpayers’ money at the problem in order to show how ‘committed we are to doing everything we can’ (Gordon Brown’s daily mantra).

As a public we don’t fully understand the economic problems currently being discussed on the news on a daily basis, but all we do know is that its ‘bad’ and something ‘big’ needs to be done to arrest the slide, hence our willingness to accept measures which otherwise would encounter far more resistance in a more rational climate.

These big decisive actions are increasingly turning out to be little more than taking advantage of the succesful erosion of public resistance to wasting huge quantities of taxpayers’ money to further enrich multinational corporations; the car makers of both Europe and the US being the latest beneficiaries.

The point is that car manufacturers are suffering the economic consequences of irresposible and short-sighted profiteering in recent years.

They gambled on selling big cars with big engines while petrol was cheap with no regard for the environment or for scientific advice on climate change. Why now are we to pay for their greed and recklessness by helping them ease the financial hangover of such a binge? Why should we pay to help them meet the demands of the new marketplace (where most consumers cite economy as the major factor in car choice)?

That is the job of a successful business surely - to judge what consumers want or need and to provide it - not to mis-judge it so badly that they face going under, and then to hold government to ransom for handouts to right their errors.

If I launch an internet start-up selling ice cubes on eBay and then consequently go bankrupt for my stupidity I will be left alone to suffer the consequences of bad business - in what totally upside-down system of values should this not also apply to multinational corporate behemoths?

The point is that (as George Monbiot rightly points out) the automotive industry has stalled and obstructed every single green initiative and research for nearly two decades but, now that public money seems available (everyone else is at it - why not get some for ourselves too?), the opportunist vultures that run these conglomerates have decided that all they really want is go green after all.

As I write this I hope that the EU will somehow resist the urge to be bribed yet again by big business and actually protect taxpayers interests and the really vulnerable victims of this economic mess; the low-level wage workers which do all the actual work for these companies. Why not instead use just a fraction of this $25 bn sum to safeguard an additional redundancy package for economically exposed workers who potentially face (if they haven’t already suffered from) lay-offs?

In other words; protect the actual victims (a much cheaper measure) and let the greedy and hopelessly mismanaged corporations go under. Surely the same economic consequences for messing up should apply to those running global corporations (and pulling in seven-figure salaries) as those simply trying to make ends meet with small scale local business… but then small scale local businesses do not have a multi-billion dollar lobby group in every political centre in the world.

The fact of the matter is that those companies who have set themselves up to face these challenges will suffer least and easily survive the economic downturn. Companies like Honda and BMW had the foresight to put in place strategies for the marketplace of today sometime in the past, and are hence better equipped to deal with the situation. The question is - why let the other inefficient, inept and greed(ier) companies also survive?

After all, the point is that the market is finally working to kill off the most environmentally irresponsible and calous manufacturers - why on earth would we want to pay to subsidise the survival of such damaging organisations?

Let’s hope that our government here in the UK and the EU as a whole sees sense on this matter and resists the pressure to give in to spoiled and greedy demands of big business… we’ll keep you updated as the situation develops.

Dejan Levi

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