Yet another Federal "bailout" in the works
The Federal government is about to
stage yet another “bail-out” of a business which is “too
important to fail.” This time the target will be Detroit's Big
Three automakers, beginning with General Motors. We are hearing the
now familiar drumbeat of predictions of horrible economic
repercussions if any of the U.S.-based automakers are allowed to
fail. The American people are being told that millions of jobs are
at risk of disappearing and that it is essential to our economy that
there be a U.S. automobile industry. Finally, we are being told that
allowing these companies to go through the traditional and legal
process of seeking chapter eleven bankruptcy protection is
inappropriate given the turmoil our economy would supposedly be
thrown into should one or more of General Motors, Ford, or Chrysler
to go out of business.
President-elect Barak Obama has stated that he is in favor of
“loaning” the Detroit automakers at least $25 billion. Nancy
Pelosi, the Speaker of the House, is in favor of calling a lame-duck
session of Congress specifically to consider just how much more
taxpayer money is to be given to yet another set of special
interests. President Bush has said that he would consider signing a
bill giving the obviously incompetent management of a major industry
more money. Michigan Senator Carl Levin is proposing that the
Paulson Wall Street bail-out bill be amended in order to allow the
automakers access to their share of the $700 billion that was
originally intended to go solely to Wall Streeters.. Finally, the
leaders of the United Auto Workers is campaigning hard for government
assistance in order to save high paid manufacturing jobs, which are
supposedly fundamental to our nation's economy.
None of this makes any economic sense, though it makes a lot of
sense when one considers the politics of the situation. Once again,
a set of special interests is to be allowed to feed at the public
trough because they were incompetent and drove their companies into
financial ruin. Incompetence, greed, and unwillingness to change are
going to be rewarded on a scale that would have been unthinkable
prior to September of this year. And, again, the Constitution is to
be ignored; apparently it no longer matters what the Constitution
says if the “emergency” is grave enough – the power of the
State to deal with the situation is to be expanded at all costs, and
issues of Constitutionality are simply ignored in the rush to feed
Leviathan's ever-increasing appetite for power.
The incompetence is present in management, labor, and government.
Management has had over thirty years in which to take steps to
manufacture small, high quality, fuel-efficient vehicles, yet it has
failed to do so, repeatedly. Likewise, the UAW has done its best to
maintain pay rates that are simply unsustainable in the face of more
efficient, less costly overseas labor. The Federal government is
also not blameless in this as its ever-growing list of regulations
governing everything from safety, to fuel efficiency, to the type of
materials that may be used in the interior of vehicles has helped
drive up Detroit's cost to a level that has made an entire industry
uncompetitive on a global scale. Yet, all three of these groups are
about to be rewarded for their incompetence and, worse, the bail-out
will do no good as it will not address the underlying problems of the
industry, though the parties involved will loudly trumpet the minor
changes that will be made as major breakthroughs that will save the
businesses, and the jobs, and will result in the Statist Utopia that
the Federal government has been promising ever since the
implementation of the New Deal in the 1930s.
What is going unsaid in all of this is that the bailout is going
to be done by the upcoming Obama regime in partial repayment of its
political debt to the United Auto Workers for its support during the
recent presidential election campaign. It is more important to Barak
Obama and the rest of the “Social Justice” wing of the Big State
Party, known colloquially as the Democratic Party, to pay their
political debt than it is to allow the market to function as it
should. Rather than allowing these inefficient companies to go
bankrupt and make their assets available to other business that could
make better uses of them, yet another large chunk of the American
economy will be nationalized. Another sector will be taken over by
State bureaucrats who will dictate the details of its operation in a
manner reminiscent of the central planning done in the former Soviet
Union. The State will gain yet more power over the lives of its
subjects and the Constitution will fade further into the background,
a document supposedly revered by our political leaders, but, in
reality a piece of paper that is increasingly viewed by them as an
impediment to the further expansion of Leviathan's power and reach.
It is particularly ironic that the Federal takeover will be done
almost immediately following Senator Barak Obama swears to “preserve,
protect, and defend the Constitution.”