Daily News Editorial
Wall Street proved it didn’t like uncertainty Wednesday when the Dow closed down 411 points after the federal government announced it was not going to buy bad mortgages from banks.
While many financial analysts might agree that’s a smart move by the federal government, many of the same analysts agree that the uncertainty of how and what the government is going to do to keep the country from sliding into an even more severe recession has investors running scared.
Now the automakers are standing in line with their hands out, hoping the government will bail them out from a quagmire that Detroit itself helped create.
Hopefully by now, people realize the era of the gas-guzzling SUVs is over. We’ll probably know for certain, though, if gas prices stay low enough for people to start buying monster trucks again. Unfortunately, the public, Detroit and the federal government all have a very short-term memory when it comes to remembering what got us into this mess to start with.
If the federal government decides to help out the automaker as it did with Chrysler in the 1980s, and that’s a big if, it has to be with a consistent and cogent energy policy that takes future petroleum supplies into consideration.
If any government loans are given – and they should be loans and not gifts – they should be to help develop and build cars that are more fuel efficient. No more loans to automakers that ignore future petroleum supplies or the environment. Period. End of discussion.
Interestingly enough, development of many petroleum resources in the U.S. has been put on hold while gas prices remain low. The reason? Developing those resources will cost more than it does to buy gas from other countries.
Well that’s an old bait-and-switch trick as old as time itself. Just as soon as the consumer takes the hook and gets addicted to high usage of gas again, the price goes through the roof.
We need to continue to develop those domestic sources to the point that we can cut down the timeframe it takes to get the gas and oil out of the ground. If the government could at least encourage exploration and make the location of known domestic petroleum reserves as much of a criteria as developing the strategic petroleum reserve, that would cut months if not years in accessing new petroleum resources.
At the same time, more emphasis than ever needs to be placed on development of ethanol, biodiesel, wind, solar and geothermal energy sources.
High gas and oil prices in fact exacerbated our current economic mess. The mortgage debacle wasn’t a matter of people just deciding to walk away from their homes. It was a matter of people trying to decide between buying gas to get to work and paying their mortgage. In many cases, they decided to buy gas.
The federal government can do much to ease the current Wall Street uncertainty by developing a comprehensive energy policy that is vast and pervasive. And now is the time to do it, when energy prices are low enough that we don’t have to react to the vicissitudes of the petroleum markets.
And that policy needs to be the steel cable – not string – that’s attached to any bailout of Detroit.