The free market works. How many loaves of bread to make next year? The government could do studies and create models, instruct bakers on how much to make, and then legislate and enforce the price. This was actually done in China and Russia. But, of course, they were disasters, with massive shortages or surpluses, and rife with corruption.
The alternative is let price determine what should be produced and who should produce it. If no one wants to buy SUVs, why should the government get involved? The free market is democratic, and the people have spoken. Giving GM, Ford, and Chrysler money is like giving money to Croc's when that strange foam shoe goes out of style. Tastes change and companies come and go.
Of course, the market can be brutal. It took a few years for the affordable housing crisis in Calgary to sort itself out and while the market works, people can suffer. This is where the government should be focusing. Put money into retraining and relocating people whose jobs were lost. Invest in new companies (and entrepreneurs) that need help getting started. This insane notion of "trickle-down" economics, that giving GM 15 billion will somehow trickle down to the workers, is an absolute waste. 12 months later, GM will still fail, but the money will be in the pockets of owners, managers, union leaders, etc. and the employees will still have to go find another job, go on EI, etc. Reckless spending on things we can't afford, using money we don't have (the magical "equity in your house"), is exactly the reason we're in this mess. You can't spend your way out of this, hoping that people start buying SUVs again. We need to save. We need to regroup and focus on working hard, creating products that people need.
This is all the stuff our grandparents knew. Hard work and prudent financial decisions is what make a country strong, not granite countertops and trips to Mexico.
