Applause For Richard Shelby’s Filibuster Threat Against “The Bridge Loan To Nowhere”
Should we bail out the Big 3 automakers? If we do bail them out, how do we know they won’t be back for more money? Is the bailout a fix for their problems or just kicking the can down the road to help the unions? How deeply should the government become involved in the day-to-day operation of the Big 3? If we do bail out the Big 3, what other companies do we bail out?
Those are all questions that should be irrelevant because the government isn’t supposed to be in the business of picking winners and losers in the market place. If the Big 3 can’t hack it, they either need to be sold to companies that can, go into bankruptcy so that they can reorganize, or go out of business. That’s how capitalism is supposed to work.
Richard Shelby understands this and that’s why he’s threatening to filibuster a bailout for the Big 3.
With job losses mounting and Detroit’s Big Three automakers facing a battle on Capitol Hill over emergency federal aid, President-elect Barack Obama on Sunday predicted more hard times for the U.S. economy before it starts to turn around, and Sen. Richard Shelby (R-Ala.) threatened a potential filibuster of any attempt to bail out the automakers.
…Levin said he was “confident” that Congress would consider a bailout bill for the auto industry, but stopped short of predicting whether it would pass. Democratic leaders in the House and Senate are considering a $15 billion “bridge loan” to help out the automakers.
“I think they’re very close to a deal, I think there will be a deal and that will happen in 24 hours,” Levin told host Chris Wallace. “Obviously, that’s a much more complicated question of whether the votes are there. What I’m confident of is that a bill will be introduced.”
But Shelby, who also voted against the $700 bailout bill for the financial industry, called it a “bridge loan to nowhere,” and said General Motors, Ford and Chrysler have to undergo a fundamental restructuring of their operations rather than look for federal help.
He also predicted auto industry executives would soon come back to Washington looking for more money, beyond any assistance they are given now.
“This is a down payment on many billions to come,” Shelby warned. “This is not something that happened overnight. This is 30 years in the making. These companies basically have failed or are failing. They probably need, according to some people, about 60 percent of the management to go, and about 40 percent downsize of the workers.”
Shelby also threatened a filibuster of any auto aid agreement, but was unsure whether he had the votes to sustain it.
Americans should want to see the Big 3 automakers not only stay in business, but thrive. That would be good not just for the Big 3 automakers and their employers, but for the country.
Let me tell you what’s not good for the country: zombie automakers, that would be dead in the free market, that can keep moving only by being fed billions of dollars in taxpayer funds.
That’s what we’re on track to get right now because there is absolutely no way that the Big 3 automakers can be competitive over the long term as long as they’re paying out $2000 more per car in salaries and benefits to current and former union workers. Unless that changes, all a bailout will do is delay the inevitable at an enormous cost to taxpayers.
PS: I’m generally opposed to a bailout on principle, but as a compromise, I would say that conservative legislators should support a bailout if….
#1) The union contracts can be renegotiated so that the cost-per-car disadvantage can be largely wiped out.
#2) If it was a low interest loan that the taxpayers would actually be paid back (with a small profit) as opposed to a “loan” that would simply be spent before the companies stagger into oblivion because they can’t become competitive again.