Tag Archives: automakers

Democrats are making a major strategic mistake on the auto bailout.

This is about the point where I end up feeling left out in the cold, completely without representation.  The country has swung so far to the right in so many ways that for years I’ve been the fabled “Yellow Dog Democrat” casting my measly little vote every couple of years to drag the country back, even just a little, toward the center.

Leave it to my fellow Democrats, though, before we’ve moved even a little bit to the center, to go overboard and make a major lefty mistake.

While the banking industry gets $700 billion to do whatever it pleases, with no strings attached, the auto makers, in exchange for $15 in short term loans, are going to get a government oversight board consisting of multiple cabinet level leaders.  The idea seems to be that if we’re giving them money, we have to insist that they actually start building more fuel efficient cars, rework their union contracts, and slim down their dealer networks.

All these things may be true, but I see no reason to believe that high level government leaders are going to be any more likely to be able to solve the problems the car companies have than the car companies themselves.  Frankly, even without the government oversight board, the government has been responsible for most of the car company problems anyway.

Take fuel economy standards, as the most glaring example. Our U.S. car companies have spent millions and millions of dollars lobbying the government not to make stringent fuel economy standards and to write those we do have in such a way as to give them an unfair advantage of foreign competitors.  Shame on them, right?  Right.  But shame on our government representatives, shame on our congressmen and senators for being swayed in their responsible voting by the lobbying dollars!

Can we fault the car companies for lobbying in their self interest when lobbying has proven to be so effective?  Hell no.  What we can do is make lobbying less effective by being hysterically, unreasonably, disproportionately pissed off when our representatives vote for their campaign coffers instead of our best interest.

The car companies have lobbied for free trade agreements, so they can do manufacture and assembly overseas where it is cheaper, and our government has given it to them in spades.  The car companies didn’t have the brains, apparently, to negotiate into these agreements any kind of fair trade practices such as tariffs to balance out the effects of economies that don’t invest in worker safety, environmental protection, accounting practices, or other important things that we force our companies to invest in.  But neither did the people we elected to run our government.  Why do we suddenly expect them to be any more enlightened, or any less susceptible to lobbying, than they have been until now?

The worst outcome of the oversight board isn’t even going to be a raft of questionable business decisions for the car companies, but a major fracture within the Democratic Party.  We are about to pitt the entire Obama cabinet and administration against the unions.  They are literally going to be sitting on opposite sides of the bargaining table.  Great!  Good thinking.  Excellent idea.  Karl Rove couldn’t have come up with such an idea in his wildest wet dream.

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Auto makers, bailout, moral hazard… Pork, pork, pork.

Reporters say it seems very likely that with GM and Chrysler threatening bankruptcy within the next 60 days “something” will be worked out by Congress to help them.  Some in Congress say that the auto makers are playing chicken with Congress.

Does anybody else have a sense of deja vu?  We already know what it takes to overcome skittish lawmakers’ concerns.  It takes pork. Lots of pork.  That’s what it took to get the $700 billion bailout package through, and that’s what it will take to get the $34 billion auto bailout through.

The warnings about a moral hazard were more prescient than we knew.  I assumed they meant things like “if we bail out the banks, next we’ll see the auto companies at the trough.”  What I didn’t think, but should have, is that once Congressional Representatives are in charge of picking winners and losers, we need to remember that their services and decisions do not come for free.  They are for sale to the highest bidder, and the bids don’t have to have anything to do with the matter at hand.  They are as corrupt as the Mafia Dons.

It’s a shame so many of them can’t ever seem to make a decision based on what is right or wrong or what is best for the country.  It always comes down to what fills their campaign coffers.

Shame on them.

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