Why Wall Street but not Detroit?

I for one cannot help but be struck by the contrast between our government’s ‘generous’ distribution of massive amounts of money to various financial institutions, much of which has gone to pay dividends to investors and supply executive compensation instead of what the politicians hoped but did not require the banks to use it for, and the relative stinginess of Washington to lend, much less give, money to the American automakers.

Perhaps part of the problem is that the American groupmind has long accepted American automakers as producing inferior products and services, even while they may have corrected this fault, while the people want to believe American financial institutions are hale and merely going through a rough patch. Detroit has a bad reputation, whether it still deserves it or not, and we desperately want Wall Street to have a good reputation whether it deserves it or not.

Are there other possible explanations?

Steve Sailer has an interesting suggestion about why.

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2 Responses to “Why Wall Street but not Detroit?”

  1. People can more easily see the quality of the product pushed by automakers. It isn’t so easy with financial services, a complicated industry.

  2. True, but I’ve read many people in the last weeks arguing that the quality of American cars is now equivalent to those of foreign automakers.

    It’s hard for me to determine whether that’s really true, but for the sake of the argument let’s accept that as a given. It seems clear that American automakers still labor under the weight of their reputation, which was certainly well-earned in the past fifty years. It is also clear that they’ve focused on large, heavy, oil-guzzling cars and trucks, which puts them in a bad odor with many people.

    Given that those financial organizations are crashing and burning even more severely than American automakers, the difficulty in evaluating them doesn’t seem *that* great. But Congress didn’t even safeguard the money they gave away by binding the banks to use the money in specific ways, whereas they’re raking the automakers over the coals to produce plans and guarantees.

    Your point is a good one, but it doesn’t satisfy me.

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