Originally Posted by Machjo

Yeah, Canada's been doin' lots of bailouts too. Not as much as you guys, mind you (man the US is in bad shape!), but still.

And everybody's convinced that if the auto sector falls, it'll be the end of the world as we know it. Fer cryin' out loud, let 'em fall altready, and enough of the corporate socialism.

As far as I'm concerned, the most we should help is to offer to pay for any staff training, and that I believe is legitimate on the following grounds:

A company could be hesitant about retraining a worker out of fear that another company could poach him (though granted this is not likely to be a major issue in a recession, but still legitimate under normal conditions). Yet if the company doesn't train him, then the country ends up with low-skilled labour. So how to we get companies to give their workers the training they need to develop without fearing poeaching by other companies? Clearly the free market can't deal with that one. Sure the company could make the worker sign a contract prohibiting him from going to the competition for a set number of years after training, but what if life circumstances require him to leave his job and the competition is the only place hiring? Then should we expect him to go on forced welfare even though he could easily find work with the previous employer's competition?

As far as I'm concerned, this is a major flaw in the free market system that government intervention could rectify quite simply. If government re-imburses all training costs of a company, then the company might not mind as much if a worker leaves to go to the competition because in essence society paid for the training, not any one company. So this would put all the companies on an equal footing, with no company able to unscrupulously benefit from other companies' training generous worker training by poaching the workers of another company.

And in a recession, if the govenrment offers to re-imburse the training costs of any company, it ensures that the govenrment woud be helping growing companies, not failing companies (after all, failing companies are busy laying workers off, not upgrading their skills). This subsidy would also put all companies on an equal footing since unlike bail outs, it would apply to all companies across the board. Even the local mom and pop shop could get training costs re-imbursed. This would also encourage them to hire more workers since worker qualifications and training costs for under-qualified workers would no longer be a barrier to the growing company.

In addition to this, government re-imbursements of training costs would be money put into th economy, but more wisely and strategically than random bailouts. It would also ensure that worker qualificaitons increase thus making the US more attractive to foreign investors owing to a more qualified labour pool.

Beyond that, though, i would say let the companies fall.