Time.com is reporting that retail sales really aren’t so bad…if you ignore car sales and gas sales.  Justin Fox writes:

Except that the hardest-hit category by far, gasoline stations–down 12.7%–was down largely because gas prices were down. It wasn’t that consumers were cutting back. It’s that they were saving money. Take gas stations out of the equation and the retail spending decline is 1.5%. Take gas stations and cars (motor vehicle & parts dealers) out, and the decline is 0.5%. Then again, if you take all the stuff that went down out of the equation, retail sales were up. Which means precisely nothing at all. (Source Time.com)

This begs the question, why are we bailing out auto manufactures who cannot currently compete?  In fact, the United States auto industry has been dead in the water for the last three decades, so why fix a problem that has been broken for so long?  To answer that question, I don’t think that we should.  The economist John Kenneth Galbraith is said to have remarked in the early 70’s that all of New York Cities problems could be fixed if we just doubled the budget.  A few years later the budget have more than doubled, and the problems were worse than ever.  If we bailout the auto industry, I predict that 10 years from now they will be just as bad off, and at the cost of our taxpaying wallets.

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