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The Credit Cruncher was conceived to help you to keep up to date with credit crunch and recession developments, it provides some helpful credit crunch advice and it addresses personal debt. The Credit Cruncher also seeks to explain how the credit crunch started and shed some light on the worldwide recession. Recently, we have begun to look at how BREXIT will affect the UK economy. Please feel free to leave comments where relevant.

12 Dec 2008

Has the automobile had it's day?

Don't get me wrong, I love cars, I enjoy driving and have been driving for more than 25 years - yet I have only really owned cars that were convenient - apart from one that I bought for my wife, other than that, the other eight cars I have owned were cars of convenience rather than ones I had researched and hunted down for their particular characteristics. This is simply because I have always understood that automobiles make very little economic sense.
The standard family cars deteriorates and depreciates rapidly, not only that but they cost a packet to run - very few people can genuinely afford to run the cars that they have...
In the world we now live, the amount of transport options shows up cars as being both dangerous (it has long been acknowledged that planes are safer than cars), and as grossly detrimental to the planet itself. In the long term the hydro-carbon powered vehicle is unsustainable however attached we are to the concept.
This is the mindset we must adopt to put the proposed bailout of the auto-industry into perspective. The bailout of financial houses is one thing - arguably both political and economic at the same time. In contrast, the proposed bailout of one specific industry whilst ignoring all others is purely political, there are no economic merits to sustaining a commercial industry which cannot sustain itself.
There is a justifiable fear that job losses and impact on the economy will cause many knock-on problems in related industries, but the question has to be posed: where does this intervention end? At some point we will have turned ourselves into the thing we in the West believed we had triumphed over after the Berlin wall fell - and economy controlled not by the free market, but by the bureaucrats in government. For those in the US, those of us in the UK can tell you what sort of cars you can expect from a nationlised auto-industry. Gentlemen, we give you the Austin Allegro:

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