I haven't written anything on the proposed bailout of the auto industry, mainly because I haven't been able to decide where I come down on the topic, partially because I didn't have anything significant to say. I probably don't have any more insight than I had before, but I have been motivated to weigh in by the remarkably poor dialog on the two sides.
The argument, of course, is at its base fairly simple: do we help one of the giant industries in our nation, one which is going through some rough times right now, especially since we are assisting the financial industry through its rough patch; or do we let market discipline, which is clearly pointing toward the failure of one or more of the Big 3, do its job and let them go, the way we would any convenience store or graphic design firm?
Out come the advocates on each side, citing statistics, making appeals to our desire to help others, whatever it takes. And so much of what they say is nonsense, or wrong, or beside the point, and they're never called on it. Here's the bottom-line question I want answered: Who is this bailout for?
Proponents say it's for the people, to preserve the jobs of the good men and women who currently build our cars. But then, on yesterday's Meet the Press, Tom Brokaw cites this:
Needless to say, Uncle Tom's guest, Carl Levin, auto industry shill (wait a second, I've just been informed that he's a United States senator, I never would have guessed that), didn't mention that.
Here's the thing. The advocates of the bailout say that's it's all about the three million jobs that are in or depend on the auto industry. So the measure of the bailout plan has to be how much it helps those three million people (actually more like ten million if you start including families).
But the advocates also say the money will be used to "restructure" the Big 3, which as we all know means plant closings and the elimination of jobs. So who is being helped by the bailout again?
A few people have suggested using the existing bankruptcy structure to get the job done. Apparently there are some impediments to that, foremost among them the difficulty the car companies would have obtaining credit. If we could get by that, apparently through an act of Congress, they could move forward with, that's right, their restructuring. The "good" thing about Chapter 11 is that the Big 3 could shed all of those unfortunate burdens that they agreed to, things like pensions and retiree health care (George Will was remarkable on this topic on ABC's This Week yesterday; I plan to write a separate post about Mr. Will). Then they could move forward with a truly clean slate.
This is the United Airlines model of bankruptcy, in which they stiffed their creditors and stockholders, shafted their employees and retirees, did virtually nothing to improve service to their customers, but enriched their executives (8% of the new company stock went right out to upper-rank employees; their CFO, a man who enraged many with his insensitive statements, has now retired at age 50 with a $2.4 million parting gift).
However this would get done, it seems quite clear that it isn't really about the hard-working people of the auto companies, but about the corporation itself and its executives. These companies have spent a couple of decades doing everything they can to move jobs overseas, bust the unions, do more with less. Some of these things may have been necessary, some not (don't you wish they had spent fewer millions on advertising?), but they have not been actions you could call pro-worker. (To be fair, that isn't a major goal of any corporation, it's just sad that so many people think so.)
So a pro-auto company bailout is, by definition, not necessarily a pro-auto company worker bailout, and we should consider that very carefully before we throw billions of dollars into it. Personally, I'd like to see a far more extensive plan for what will happen, how many jobs really will be saved, what the companies will have to do in the way of moving to post-petroleum technologies.
See, I don't really trust the auto executives with all that money. One chairman and CEO took his previous company nowhere during the greatest boom market in its product line, alienated pretty much everyone during his six-year tenure, and walked away with close to half a billion dollars. Another big player, a vice chairman at one of the Big 3, who runs a company based on science and technology, believes that global warming is "a crock of s***." These are silly small men who are supposed to take our money and, despite years of proof that they don't know how to succeed, are going to rebuild the auto industry.
Chances are the first thing these captains of industry will do with our tax dollars is fly off to a "Management Planning Retreat" in some tropical clime, because only golf and massages can help them figure out what to do with all that cash.
I still haven't decided where I stand on this bailout. I'll be very unhappy if it is used to enable more of the same behavior we've seen, if we're just throwing it down a rathole.
But there's the other side, the side that says, "Let them fail, and we'll help the real people on the other side." But none of these wise folks ever have much to offer beside extending unemployment benefits and offering a meager amount of cash for job retraining; I mean, how many hairdressers and chefs do we need? I still haven't seen a plan which isn't, in effect, here's some money, now go away and don't bother us. And that just isn't going to cut it.
So it's a dilemma, and one which is going to cost all of us either way, and whatever facts exist are being obscured by talking points, and I just don't know.
The argument, of course, is at its base fairly simple: do we help one of the giant industries in our nation, one which is going through some rough times right now, especially since we are assisting the financial industry through its rough patch; or do we let market discipline, which is clearly pointing toward the failure of one or more of the Big 3, do its job and let them go, the way we would any convenience store or graphic design firm?
Out come the advocates on each side, citing statistics, making appeals to our desire to help others, whatever it takes. And so much of what they say is nonsense, or wrong, or beside the point, and they're never called on it. Here's the bottom-line question I want answered: Who is this bailout for?
Proponents say it's for the people, to preserve the jobs of the good men and women who currently build our cars. But then, on yesterday's Meet the Press, Tom Brokaw cites this:
Most researchers say there are three million jobs nationwide. As you can see there in Michigan, Illinois, Missouri, Indiana and Ohio there are thousands of jobs that are involved. And then if you talk just about dealerships across the country, nationwide there are about 740,000 jobs involved with the Big Three in dealerships alone; General Motors, 325,000 jobs in their GM dealers across America.Far be it from me to tell Mr. Brokaw to do his job as he tries to burnish his Cronkite credentials, but this last "fact" is no help at all. How do I make this clear? Jobs in dealerships are the result of the need to sell cars...people may not be buying cars now, presumably they will again one day...when they do, it really doesn't matter which nameplate is on the car they're buying, the number of people working in dealerships will be pretty close to the same. So these hordes of people won't be selling Big 3 cars, they'll be selling Hondas or Toyotas or Hyundais - the bailout has absolutely nothing to do with these people.
Needless to say, Uncle Tom's guest, Carl Levin, auto industry shill (wait a second, I've just been informed that he's a United States senator, I never would have guessed that), didn't mention that.
Here's the thing. The advocates of the bailout say that's it's all about the three million jobs that are in or depend on the auto industry. So the measure of the bailout plan has to be how much it helps those three million people (actually more like ten million if you start including families).
But the advocates also say the money will be used to "restructure" the Big 3, which as we all know means plant closings and the elimination of jobs. So who is being helped by the bailout again?
A few people have suggested using the existing bankruptcy structure to get the job done. Apparently there are some impediments to that, foremost among them the difficulty the car companies would have obtaining credit. If we could get by that, apparently through an act of Congress, they could move forward with, that's right, their restructuring. The "good" thing about Chapter 11 is that the Big 3 could shed all of those unfortunate burdens that they agreed to, things like pensions and retiree health care (George Will was remarkable on this topic on ABC's This Week yesterday; I plan to write a separate post about Mr. Will). Then they could move forward with a truly clean slate.
This is the United Airlines model of bankruptcy, in which they stiffed their creditors and stockholders, shafted their employees and retirees, did virtually nothing to improve service to their customers, but enriched their executives (8% of the new company stock went right out to upper-rank employees; their CFO, a man who enraged many with his insensitive statements, has now retired at age 50 with a $2.4 million parting gift).
However this would get done, it seems quite clear that it isn't really about the hard-working people of the auto companies, but about the corporation itself and its executives. These companies have spent a couple of decades doing everything they can to move jobs overseas, bust the unions, do more with less. Some of these things may have been necessary, some not (don't you wish they had spent fewer millions on advertising?), but they have not been actions you could call pro-worker. (To be fair, that isn't a major goal of any corporation, it's just sad that so many people think so.)
So a pro-auto company bailout is, by definition, not necessarily a pro-auto company worker bailout, and we should consider that very carefully before we throw billions of dollars into it. Personally, I'd like to see a far more extensive plan for what will happen, how many jobs really will be saved, what the companies will have to do in the way of moving to post-petroleum technologies.
See, I don't really trust the auto executives with all that money. One chairman and CEO took his previous company nowhere during the greatest boom market in its product line, alienated pretty much everyone during his six-year tenure, and walked away with close to half a billion dollars. Another big player, a vice chairman at one of the Big 3, who runs a company based on science and technology, believes that global warming is "a crock of s***." These are silly small men who are supposed to take our money and, despite years of proof that they don't know how to succeed, are going to rebuild the auto industry.
Chances are the first thing these captains of industry will do with our tax dollars is fly off to a "Management Planning Retreat" in some tropical clime, because only golf and massages can help them figure out what to do with all that cash.
I still haven't decided where I stand on this bailout. I'll be very unhappy if it is used to enable more of the same behavior we've seen, if we're just throwing it down a rathole.
But there's the other side, the side that says, "Let them fail, and we'll help the real people on the other side." But none of these wise folks ever have much to offer beside extending unemployment benefits and offering a meager amount of cash for job retraining; I mean, how many hairdressers and chefs do we need? I still haven't seen a plan which isn't, in effect, here's some money, now go away and don't bother us. And that just isn't going to cut it.
So it's a dilemma, and one which is going to cost all of us either way, and whatever facts exist are being obscured by talking points, and I just don't know.
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