Listen to Senior Research Fellow Richard Ebeling's November 22, 2008 interview on the Inside Track radio program in Arizona. He discussed the proposed automobile manufacturers bailout.

This past September, Congress already approved a $25 billion subsidy to the Big Three under the guise of investing in improved fuel-efficiency technologies for the next generation of cars and trucks. The Department of Energy soon will disperse these funds.

The Detroit automakers no doubt expect they will also receive billions more. After all, they’ve paid for it. According to OpenSecrets.Org, which tracks lobbying expenditures by special interest groups, the Big Three auto companies have spent millions winning friends and influencing people in Washington.

Just in the first half of 2008, for example, GM spent $7.3 million on Washington lobbying activities. Ford shelled out $3.8 million and Chrysler some $3.3 million. In the last 10 years (1998-2008), GM, Ford and Chrysler spent a total of $228.4 million — nearly a quarter of a billion dollars — lobbying Washington. Out of the total, GM spent $92.9 million, Ford more than $78.6 million and Chrysler $56.9 million.

Fast on the heels of the $700 billion bailout for America's banks and other financial institutions, the U.S. auto industry is now begging, cup in hand, for a similar handout from Washington. Detroit's Big Three probably feel they've earned it, having paid out tens of millions in lobbying costs and campaign contributions in recent years to acquire political friends.

Richard Ebeling's OpEd on the auto industry bailout recently appeared in the Philadelphia Inquirer:

Fast on the heels of the $700 billion bailout for America's banks and other financial institutions, the U.S. auto industry is now begging, cup in hand, for a similar handout. Detroit's Big Three probably feel they've earned it - having spent tens of millions of dollars on lobbying and campaign contributions to make political friends in recent years.

In another instance of an industry's declaring itself "too big to fail," senior executives from General Motors, Ford and Chrysler want the American taxpayer to cough up $50 billion or more to cover the industry's losses. While they met some resistance in Congress this week, they also seemed to be getting plenty of sympathy in the nation's capital.

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Still, the price decline could definitely be beneficial. The typical consumer spends about 18 percent of his or her money on transportation-related costs, estimates the American Institute for Economic Research (AIER) in Great Barrington, Mass. Of that 18 percent, about 28 percent is spent on gasoline and motor oil.

When gasoline was $2.94 a gallon, it cost about $6,320 to operate a small sedan 15,000 miles. The drop in the gasoline price reduces that to about $5,730 – a savings of $590, calculates AIER.

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Richard Ebeling featured in the Detroit News:

Fast on the heels of the $700 billion bailout for America's banks and other financial institutions, the U.S. auto industry is now begging, cup in hand, for a similar handout from Washington. Detroit's Big Three probably feel they've earned it, having paid out tens of millions in lobbying costs and campaign contributions in recent years to acquire political friends.

In another instance where an industry is claiming it's "too big to fail," senior executives from General Motors, Ford and Chrysler want the American taxpayer to cough up $50 billion or more to cover the industry's losses.

Read the full article

Senior Research Fellow Richard Ebeling was quoted in The New York Society of Security Analysts' first issue of The Investment Professional:

Richard Ebeling, PhD, senior fellow at the American Institute for Economic Research, believes neither candidate is facing reality in terms of curtailing entitlement programs, which will be the major engine fueling the budget deficit and spending, in his opinion. ' The deficit means that the government has to borrow money to make up the difference between what it takes in as taxes and what it spends as expenditures for these programs.'

'Where does the borrowed money come from?' he asks. 'It either comes from the savings of private individuals in the United States of it entails our increased reliance on private individuals, companies, and countries abroad. Eventually we'll either have to pay that back or bilk those who have lent the government money.'

Ebeling went on to say:

For free-trade proponents, the issue is clear, as Ebeling sees it. 'Which candidate understands that we are in a global economy? Which sees that borders, while they still remain as lines on a map, are increasingly imporant?' he asks. 'The market boundary is now the world. Do we want to participate in and benefit from this global territory that leaps over and goes under and ignores these artificial political boundary lines? If so, then we need the candidate who is most willing to follow open and competitive trade policies. That candidate will benefit the financial markets and the citizenry as a whole.'