Once begun, it was clear the \u201cbailout train\u201d would keep running through Washington, with one industry after another demanding, \u201cYou helped the banks, now it\u2019s OUR turn.\u201d <\/p>\n
Thursday Nov. 6 it was Detroit\u2019s automakers, battered by the economic crisis and appealing to congressional leaders for an additional $25 billion in federal loans to make required payments to employee health care trust funds incurred as part of a 2007 labor deal. The car makers also want lawmakers\u2019 help in winning access to the $700 billion financial bailout being run by the Treasury Department and to low-rate emergency borrowing from the Federal Reserve\u2019s discount window, normally available only to banks. <\/p>\n
(If the automakers default they could end up being owned, in effect, by a weird partnership of The Big Unions and our quasi-governmental money-issuing bank. Or maybe that\u2019s not so weird. We could just start calling the Fed chairman \u201cIl Duce.\u201d) <\/p>\n
Talks with House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., came as General Motors Corp. and Ford Motor Co. were poised to announce billions more in losses and further job cuts Friday, and as GM\u2019s president for North America said the next 100 days would be critical for his company and the industry. <\/p>\n
GM said the additional federal support would allow \u201ca competitive\u201d auto industry \u201cto contribute to our nation\u2019s economic revival.\u201d <\/p>\n
But that\u2019s like taking your ailing daughter to Count Dracula and asking if there\u2019s a way he can \u201cget her back on her feet.\u201d Once the fiend has sunk in his fangs and your loved one has joined the legions of the walking dead, she may continue to LOOK young and healthy, but she\u2019ll never again be free of the ghastly form of \u201clife support\u201d to which you\u2019ve condemned her, sucking the lifeblood from others. <\/p>\n
\u201cLet\u2019s not kid ourselves that a taxpayer rescue would be anything but a down payment on a never-ending bailout,\u201d warned business columnist Holman Jenkins, Jr. in the Nov. 5 Wall Street Journal. <\/p>\n
Congress already approved $25 billion in low-interest loans for domestic automakers and suppliers to retool plants to build fuel efficient vehicles, just a month ago. Now they want more. <\/p>\n
President-elect Obama expressed support for an additional $25 billion in loans … providing the money would go toward helping the industry build \u201cfuel efficient\u201d cars, only. <\/p>\n
But that\u2019s just more of the government meddling that caused this whole problem, in the first place. <\/p>\n
Detroit\u2019s job is to sell cars, creating profits for stockholders and jobs for everyday Americans — not to serve as a Petri dish in which the federal government can try its hand at manipulating Americans\u2019 taste in modes of transportation. <\/p>\n
A better solution would be to ask Detroit if they could stand on their own two feet if Congress simply got out of their way, allowing them to build and sell only the types of cars American consumers want to buy. <\/p>\n
The automakers could probably make good profits without taxpayer help if they were allowed to de-unionize, hiring competent labor at going rates on the free market — even if they had to offer existing union employees handsome buyouts. But that\u2019s made nearly impossible by federal labor laws that perpetuate the wealthy and powerful unions — something unlikely to change with union-financed Democrats in charge of both Congress and the White House. <\/p>\n
Alternatively, Detroit could probably turn good profits without a taxpayer bailout if they no longer had to meet the arbitrary \u201cCAFE\u201d fleet fuel economy standards set by Congress, which require them to manufacture a certain number of tiny, \u201cfuel-efficient\u201d cars consumers don\u2019t want, sapping the profits from their popular lines of muscle cars, trucks, minivans, and Jeeps. <\/p>\n
In fact, as Mr. Jenkins of the Journal noted Wednesday Nov. 5, Detroit might even make a go of it without a bailout of Congress were merely to repeal the current, nonsensical \u201ctwo fleet\u201d rule, which requires automakers to meet the mileage standards separately with their \u201cdomestically\u201d and \u201cnondomestically\u201d produced fleets — a transparent sop to the unions, designed to keep the firms from making more auto components offshore. <\/p>\n
\u201cFor 30 years, to make and sell the large vehicles that earn their profits, the Detroit Three have been effectively required to build small cars in high-wage UAW factories, though it means losing money on every car,\u201d Mr. Jenkins reports. <\/p>\n
What kind of sense does that make, if these giant engines of American blue-collar employment are headed down the tubes? If it\u2019s impossible to simply repeal the CAFE standards — though I don\u2019t see why — how about just allowing the manufacturers to meet CAFE standards with any mix of domestic and imported cars they please, Mr. Jenkins asks. \u201cDetroit would finally get what every foreign competitor and just about every other business has — normal leverage over labor costs.\u201d <\/p>\n
Why not correct the market interventions that make American auto manufacturing unprofitable in the first place — something that can be done at zero cost to overstressed taxpayers? <\/p>\n
The Democrats promised \u201cchange.\u201d Here\u2019s a chance to show they\u2019re willing to think \u201coutside the box.\u201d <\/p>\n
Or, alternatively, will they kowtow to the special interests that bankrolled their campaigns, even if it drives taxpayers — along with GM and Ford — to the poorhouse? <\/p>\n","protected":false},"excerpt":{"rendered":"
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