The Theory Of Market Economies Emphasizes Freedom

Government InterventionName:Institutional affiliationGovernment InterventionThe bailout of U.S. automakersThe auto industry has received two major bailouts in the American history, first in 1979 and the second in 2009. In the 1970s, Chrysler, General Motors and Ford were under immense pressure to produce fuel-efficient cars. After the Second World War, Japan made the recovery of its auto industry its priority. A positive post-war relationship with the US ensured that America provided the financial and intellectual resources needed for the modernization. However, the Japanese manufacturers such as Toyota and Nissan learned the inefficiencies of the American manufacturing system and created an improved system. During the Iranian Oil Crisis of 1979, the demand for American cars dropped drastically leading to the bankruptcy of major manufacturers (Wall, 2010). The congress was forced to impose quotas on Japanese cars in addition to taxpayer bailouts to American manufacturers to protect the American manufacturers from liquidation and the consequent loss of jobs and revenue from taxes. The American car industry flourished once again with the introduction of smaller low consumption cars. However, when the oil crisis ended in the early 1980s, the manufacturers regressed to the old