Jon Stewart: Give the Auto Industry Money; Paul Krugman: US Auto Industry Doomed

Jon Stewart says it needs to be done. Our Guest Voice, journalism professor and author Walter Brasch, says it needs to be done. CBS says the Dems and the White House have agreed on a deal. And the Sunday morning bobble-heads all seemed to agree that it will be done.

But Nobel economics prize winner Paul Krugman says, bailout or no, the U.S. auto industry will probably disappear:

“It will do so because of the geographical forces that me and my colleagues have discussed,” the Princeton University professor and New York Times columnist told reporters in Stockholm. “It is no longer sustained by the current economy.” [...]

Speaking to reporters three days ahead of the Nobel Prize ceremony, Krugman said plans by U.S. lawmakers to bail out the Big Three automakers were a short-term solution, resulting from a “lack of willingness to accept the failure of a large industry in the midst of an economic crisis.”

Sticking with the strange bedfellow theme… James Joyner says Krugman’s probably right:

Presuming he’s talking about the Big 3 continuing to make cars in Detroit, he’s almost certainly right. Presumably, Ford and GM will continue to make profitable cars overseas and Chrysler’s Jeep brand (all that’s left of the old American Motors) will survive in some fashion. Nor is there any reason that the highly profitable “foreign” firms manufacturing cars in the American South will fail any time soon.

I do think we’ll soon see the day when Western firms get out of the economy car business, ceding it to China, India, and Korea.  We’re simply not going to be able to compete on the basis of cheap.  I think we’ll see the end of cars as we know them before we see the demise of luxury and sports cars being made by Western, including American, firms.