Sam: 'Trickle Up' Worth a Try for Auto Industry?

Nov. 6, 2008 — -- The following is a commentary by ABC News' Sam Donaldson. Click here to view a video version of his latest essay.

When it comes to bailing out Detroit, why not "trickle up" rather than "trickle down?"

Listen, one of the age-old debates about the right way to manage the economy is over which way to "trickle."

Do you help business and industry so they can create jobs and sell goods and the money thus "trickles down," as the Republicans prefer? Or, do you help workers and consumers so they can buy the goods and the money thus "trickles up," as the Democrats prefer?

Putting aside the partisanship of the two approaches, I heard a commercial on the radio this morning advocating "trickle up" for the auto industry and I found it appealing.

A man whose name I didn't catch said he had bought time on the radio to advance this proposal -- instead of the federal government giving the Detroit big three billions in bridge loans, give the same amount of money to customers who would buy the cars.

If you buy an American-made car within the next year or so for the best price you can negotiate with the dealer, you get a check for $10,000. That keeps the dealer in business and the auto manufacturer in business. I ran the math in my head and believe me, if you gave me $10,000 I would trade in my 2002 Detroit-made auto for a new one -- even if that money is taxable.

But, you say, if Detroit could sell its present gas-guzzlers there would be no incentive to change the economic structure of the business and to speed up a transition to fuel-efficient cars. Oh, yes there would.

When the year or so was up -- the same time of a direct federal bridge loan -- there would be no more $10,000 checks to car buyers, and Detroit had better have gotten its house in order or it would once again face bankruptcy. And, there would be no second time around with Uncle Sam.

There may be problems with this approach, but have you noticed how wonderfully efficient and effective the government's efforts to bail out the economy with "trickle down" have been so far?

It's hard to see how a new approach could be much worse -- "trickle up" could be worth a try.

Sam Donaldson, a 41-year ABC News veteran, served two appointments as chief White House correspondent for ABC News, from 1977-1989 and from January 1998 to August 1999, covering Presidents Carter, Reagan and Clinton. Donaldson also co-anchored, with Diane Sawyer, "PrimeTime Live," from August 1989 until it merged with "20/20" in 1999. He co-anchored the ABC News Sunday morning broadcast, "This Week With Sam Donaldson & Cokie Roberts," from December 1996 to September 2002. Currently, Donaldson appears on ABC News Now, the ABC News digital network, in a daily show called "Politics Live."