STOCKHOLM, Sweden — Nobel economics prize winner Paul Krugman said Sunday that the beleaguered U.S. auto industry will likely disappear.
[From Krugman: US Auto Industry Will Probably Disappear]
What I'm wondering is, if we're going to bail out the auto industry - as we surely, to some extent, will - why can't the government do to it the same thing it did to the old Bell System? Why not break the three big companies into a bunch of smaller enterprises - maybe Chevy, Inc. and Buick, Inc., for example, or Ford Engines Inc. and Ford Transmissions Inc., however it works out? Some might fail; would others have a better chance to survive?
For the record, I'm not one who thinks the breakup of Bell was an unqualified success. But there's no question a vibrant telephone industry has survived, and while the telcos are encountering problems at the moment (isn't everybody?), it's highly unlikely the whole industry will just go away.
Sure, there are other problems to be solved - trade rules, environmental problems, fuel problems, and more. But keeping a significant part of the auto industry not only alive but flourishing could buy a little more time to solve them.
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