If you were willing to spend tens of billions of dollars on aid to auto companies, that would help people living in the rust belt. But by the same token, if you agreed to buy tens of billions of dollars worth of cereal that would also help the Michigan economy. Or what if you spent it on this:
High-speed rail could cut travel time between Detroit and Washington from nine hours to three — just a smidge longer than the train ride from Washington to New York, from downtown to downtown. And you’d never have to take your shoes off, unless you wanted to. High-speed rail would also cut a five-hour drive from Detroit to Chicago to just over an hour. Detroit to Cleveland? Just under and hour. Detroit to Pittsburgh? About an hour and a half.
High-speed rail would, in other words, turn Rust Belt distances into northeast corridor distances, while also shifting the Rust Belt closer to the northeast corridor. It would increase the return to doing business in every city in the region. It would be the Erie Canal and the original railroads on steroids.
And here’s the thing — California is estimating that its 800-mile high-speed rail network will cost it about $45 billion over twenty or so years. The actual cost will probably be higher than that, and a Midwest network would be larger and therefore more expensive, but the total cost is in the same ballpark as the $50 billion in aid automakers are begging for (which wouldn’t even be spread out over a period of years).
I think after what’s just been done for Citigroup, nobody — myself included — has much of a leg to stand on in opposing giveaways to car companies or anyone else. But it’s still the case that money could be better spent on public investments that would both directly create demand for industrial products and also build productive infrastructure for the future, than simply on covering the operating costs of industrial firms and hoping for the best.