The New York Times On Opposition To The Big 3 Bailout
The New York Times has up a fascinating piece on the negative reaction to the Big 3 bailout. Of course it’s fascinating as much because of what the NYT left out, than what was actually in the piece, but what do you expect from the Times?
It begins like so,
When the leaders of the three Detroit auto companies and the United Automobile Workers union travel to Washington to make their case for a federal bailout, they will be flying into stiff headwinds of public opinion.
Thus far, much of the commentary in Washington, in the pages of major newspapers and on the Web, has been against providing financial support for the companies, which they will say they desperately need in hearings beginning on Tuesday.
The waves of criticism have been so strong that Susan Tompor, a columnist for The Detroit Free Press, was moved to write on Sunday’s front page: “I never knew Detroit was a dirty word.”
It is a remarkable shift for an industry that has long wielded considerable clout in Washington.
But that support has dwindled for many reasons, leaving backers of a bailout, including the House speaker, Nancy Pelosi, and Senate majority leader, Harry Reid, having a tough time making their case that Detroit should be saved.
First off, it’s worth noting that if Harry Reid and Nancy Pelosi support the bailout in a Democratic controlled Congress, it has as good a chance as not of passing, no matter how much public opposition there is to it. If not now, then when Obama gets into the White House.
From there, the Times goes over a litany of reasons why the Big 3 automakers don’t have as much swing in DC these days. Some of them make a lot of sense,
Some Congressional support has also dwindled because the automakers closed plants in other states, like Alabama, Georgia, Louisiana and Delaware, and consolidated their operations closer to home.
Meanwhile, foreign auto companies have built plants across the South, picking up lawmakers like Senator Richard Shelby, Republican of Alabama, who now are more allied with the foreign car companies.
Some of the reasons not so much,
The carmakers, for example, fought hard in recent years against two Congressional efforts to raise fuel economy standards, at a time when Americans were struggling with more expensive gasoline and had become more environmentally conscious.
However, what I found most intriguing were the reasons that the public might be sour on a bailout that the Times DIDN’T mention.
#1) The public has buyer’s remorse over the $700 billion dollar bailout.
#2) The Big 3 Automakers have already been given a $25 billion dollar loan.
#3) The government shouldn’t be in the business of bailing out companies in the first place.
#4) Given that we’re in tough economic times, it’s hard for the average American to muster a lot of sympathy for workers at the Big 3 automakers when all of the companies pay out over $70 per hour in wages, pension and health care benefits.
#5) If we bail out the Big 3, there will surely be dozens and dozens of other companies lining up for free taxpayer money. Where does it stop?
#6) A bailout would do nothing but kick the can down the road for the Big 3. There is no reason to think that it would get them back to profitability.
#7) It’s entirely possible that a restructuring under Chapter 11 bankruptcy could actually do much more to help the Big 3 become healthy long-term than a bailout.
Last but not least, two more thoughts…
#1) Once again, the American people’s opposition to this bailout just highlights how strongly many of them opposed Bush and Paulson’s 700 billion dollar swindle and emphasizes that if John McCain would have had the political courage to oppose the bailout, he might be our next President.
#2) I do think the Big 3 automakers are very important to the country. I don’t want them to fail. However, unless something changes, another bailout would do nothing more than kick the can down the road a few years at the cost of billions of dollars. There’s little to be said for that.