U.S. economy would benefit more from retraining ex-car industry employees. Tom Sowanick is CIO of Clearbrook Research, part of Clearbrook Financial, a Princeton, N.J.-based wealth-management service provider.

U.S. House of Representatives speaker Nancy Pelosi has fallen in line to support General Motors (GM), stating that the company is too large to fail. Perhaps this sad logic should be turned on its head to ask, |image1| "What is the benefit of providing life support to the largest U.S. producer of non-competitive autos?"

GM, Ford, and Chrysler employ about 240,000 people domestically, but the Center for Automotive Research estimates that total job losses would hit 2.5 millionif GM failed.

In one view, it would seem irresponsible for the government to stand by and allow so many people to lose their jobs without doing anything to help them -- as, be it noted, they were quick enough to do for Wall Street. But then it has to asked how productive, so employed, these 2.5 million people are for the needs of the twenty-first century.

Better spent

I think the high cost of absorbing retiree and healthcare costs isn't sufficient reason to keep these bumbling companies alive. It makes more sense to cleave off these costs and let the government absorb them. We need to stop companies from producing inferior products and creating more under-funded liabilities. At least in this scenario, taxpayers would be able to see the end to their role in supporting a failed industry.

The U.S. economy would receive a huge lift if the 2.5 million people associated with auto production were retrained and retooled. This would take time, but wouldn't the benefits be greater if the U.S. government spent $25 billion to $75 billion -- the ranges of costs bantered about to bail out U.S. car makers -- to train engineers, support infrastructure projects, and work in the much neglected alternative-energy space?

Wind-farm projects have been halted in recent weeks because of the collapse in oil prices. The price of oil should have very little impact on the need to explore the benefits of alternative energy sources. Furthermore, a 2.5 million person labor pool would do wonders for the much needed upgrade of our infrastructure needs. These jobs may be be less glamorous than auto-related positions, but then they may also be of greater value to the overall economy. -FWR

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