Thursday, December 18, 2008

Orderly Bankruptcy for Auto Industry


This has nothing to do with geology, but is an intellectual problem, equivalent to nuclear plants. All this talk about n-plants being too expensive, and we have the cost of several of them going to the auto industry. What are they going to do with it? There is no risk of 'cost-overrun', the fear of which has seized up all action on the nuclear front, but rather there is the risk that all this money is going into a big black hole.

The best thing to do is what we did with an unwanted nuclear plant, which is to 'mothball' the thing for a year or two, until it becomes clear what to do with it. But how can we mothball the auto industry?

Still, it's a better option than letting things run, destroying wealth like old Soviet factories, producing things that nobody wants. Are we going to end up melting down all these brand new giant pickup trucks? That's why I'm for the orderly bankruptcy, with mothballing, as the best way to preserve wealth. Somebody will eventually figure out what to do with all those factories!

You might now say that we don't need any new nuclear plants if we give up on all industry in Ontario, but I don't think that will happen. Now is the best time to build nuclear plants, absorbing the people from the car industry, and using cheap oil. And these guys love to buy ugly pickup trucks! Ontario should just build the plant using the old method of government-backed bonds, and absorbing the cost overruns. Or estimate the dang cost right the first time!

The preceding has been a dream, assuming rationality in government. The reality is that they will waste money on the auto industry, and waste money doing all the wrong things for nuclear plants.

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