Or, let Exxon and OPEC bail them out!
By Jack E. Lohman
So now the auto industry wants a handout, even after driving itself into the ground with some of the stupidest executive decisions ever. And if it’s not a good private investment — which it isn’t — then it’s not a good public investment either.
It’s bad enough that incompetent CEOs still have their $50 million jobs and bonuses, especially after their brilliant business decisions. But now congress wants to bail them out even while they move more manufacturing north to benefit from Canada’s health care system. They are screwing over their American workers, maybe Canada can bail them out!
This fact is clear: There will not be as many American cars sold in the future, and even fewer manufactured in the U.S.. Bailout or no bailout, somebody has to go!
As Robert Reich noted, we have a system for companies in trouble. It’s called Chapter 11 Bankruptcy. It allows companies to regroup and re-emerge in the marketplace. That is, if they are viable in the first place, and there’s many who feel GM isn’t. They can even renegotiate their union contracts at that time (which may turn off the Dems supporting the unions). But the workers may welcome this.
People are not going to quit buying cars if GM goes belly up. Ford and Chrysler will gain both new sales and new workers (many from GM), which will strengthen those companies and their suppliers and workers.
No company is too big to fail, as we learned with TWA, and in this case allowing one to go down will save the industry and the taxpayers, and actually help mitigate the financial crisis.
GM can easily sell off its profitable models to different ownership, or even merge. That’s what you call free market capitalism, don’cha know?
Spending good resources on a bad investment is foolish, and this one will not increase car sales. But like all government decisions this one also revolves around political money. The auto unions give great sums, tend to favor the Democrats and the UAW gets a lot in return. But the workers must look beyond this to a sound economy. Even they may be better off with GM gone.
This financial crash would not have occurred had politicians not taken campaign cash to back off of regulations that made sense. Everywhere. In banking, credit and finance, and corporate governance. When government decisions are made, campaign cash should not flow to the politicians making the decisions. That is, simply, bribery and corruption.
Wouldn’t it make sense for the government to spend our $700 billion establishing our own taxpayer-owned lending operation, for both homes and cares? The banks we’ve loaned the money to don’t want to lend it, because they prefer paying for CEO bonuses and retreats.
And while we’re at it, let’s get those wealthy folks investing in US treasury bonds that can be used to bail out America and give them a return-on-investment at the same time.