Otherwise, we’d have rampant government intervention in private industry. The Bush administration says it is committed to sliding billions of dollars to the domestic auto companies regardless of the fact that the bailout failed to make it through Congress last night. The administration’s only recourse, presumably, is to shift TARP money to the automakers, something Bush once rejected out of hand.
The dishonesty surrounding the auto bailout issue is encapsulated in the first paragraph of the AP story linked above:
With Congress gridlocked and the economy floundering…
Congress isn’t “gridlocked.” The bailout failed to pass because it didn’t get enough votes.
…the Bush administration declared Friday it would step in to prevent the “precipitous collapse” of the U.S. auto industry…
We’re talking here about three of the ten companies that manufacture automobiles in the United States. The alternative to a government bailout is not “precipitous collapse,” it is Chapter 11 bankruptcy. Most or all of the major airlines companies have been through Chapter 11. They didn’t “collapse,” they restructured their financial obligations and emerged stronger. What could collapse is the United Auto Workers union, but that would be a good thing.
…and the disastrous loss of hundreds of thousands of jobs sure to follow.
Nonsense. GM, Ford and Chrysler sell a great many cars and they need employees to make them. Their problem is not the money they pay to existing workers, it is the legacy payments to retired workers and their widows that are forcing the companies into bankruptcy. Those legacy payments will be reduced or terminated in a bankruptcy court; existing workers will continue making automobiles.
To me, the most disheartening aspect of the current bailout spree is the spectacle of executives from the banking, investment banking, insurance and auto industries begging the government for cash like teenagers who have blown their allowances and are abjectly asking their Daddy for more money. The government as Daddy–wasn’t that supposed to be a liberal concept?
To comment on this post, go here.