Dec 12 2008
Where do we go from here?
I don’t have too much today. I was pleasantly surprised at the failure of the bailout in the senate, along with George W. Bush’s agreement to possibly use portions of the TARP money (financial bailout money) to bail out the industry anyways. This to me seems like the best short term solution (In the sense that the industries won’t collapse until Bush isn’t the one controlling this mess) but it is not going to be enough by far.
I’ve voiced my displeasure with the auto bailout proposals, but that doesn’t mean I don’t think the Big Three need help. Virtually every economist says keeping them afloat will be vital to getting out of this recession. World markets collapsed on the news of the senate’s rejection. Something does need to be done.
My fear is that, similar to the financial bailout that failed in the house, earmarks that have nothing to do with the auto industry will be thrown in to gather enough votes.
The senate doesn’t return until January 6th. Hopefully over these next holiday weeks our congressmen will be hard at work thinking of a more progressive proposal for restructuring the Big Three.
Just as long as it’s made clear which people are holding out, and their reasons for doing so. And if I’m not mistaken, it was the same bunch of small government, fiscal conservatives that couldn’t back the Wall St. bailout unless it was loaded up with pork.
Just a thought. If the Big Three were located in, say, Atlanta instead of union-infested Detroit, how would the southern conservative congressmen respond then? Or, if the whole thing was being advanced by a politically popular president rather than a dead duck one? Finally, if this was October and these congressmen — who I should remind you have no qualms about accepting campaign contributions from billionaire CEOs, yet seem to think unions are ruining our country — had to face re-election, would that affect how they vote? Finally one other issue that doesn’t to get mentioned by the anti-bailout crowd. The auto bailout would cost at minimum $14 billion. Let’s say we let the Big Three crash and burn. How much will that cost in food stamps, welfare, unemployment, insurance, health care and other expenses tied to an economic meltdown? (Which is not to say we shouldn’t insist on immediate changes and a major investment in hybrid, energy-efficient cars from Detroit. In fact, I just thought of another question: Why is it we never hear our southern gentlemen complain that there aren’t enough hybrid cars? Why is it they only complain about unions?) With all the costs associated with not helping the Big Three, and its resulting impact on our economy, isn’t this a situation that an old car repair commercial used to say: You can pay me now or pay me later?
How accurate are the wage statistics, $40 for union auto workers vs. $18 for non-union auto workers? In Dayton, many newer auto workers make signficantly less than the older workers. The unions negotiated a two-tiered system. Blaming the unions is a convenient canard for conservatives, a pretty tired one at that.
Is it because of union contracts that the big three neglected to build fuel efficient cars and focused instead on gas guzzling SUVs? Is it because of unions that the big three are late to hybrid technology?
We need to bail out these companies as much as Wall Street. Too many communities, suppliers and auxiliary companies will go under otherwise. Evidently, I agree with the Bush White House here.