Has it really come to this, America?

Cross posted at the Partisan Report

As if the capitalist gods are not already upset with our lawmakers for having shown disdain for the free market system that has produced unmatched wealth and a standard of living to America unseen anywhere else in the world; the Democrats in Congress are really about to bring down the thunder.

To ensure they do not lose vital support of their urban base the Democrats are on the verge of delivering $15 billion bail out plan to General Motors and Chrysler, and Ford will receive help too bringing the total to around $35 billion (I may be off by a billion but does it really matter? It’s only paper money) that will restructure the auto industry.

The money comes with oversight. We will now have a “car tsar,” or a “Minister of Interior Production” if you will. The Democrats are pushing for a seven-member board that will set up guidelines for the auto-industry to operate by. If Ford, GM and Chrysler, or the Big Three as they have so affectionately become known by, falter or do not meet satisfaction the “Minister of Interior Production” will recall the money.

What is wrong with that, you ask?

As I said earlier, union workers and urbanites keep the Democratic Party fed and clothed so there is no way that the auto-industry and its unions in Detroit will disappear. The laws that govern the markets are as perfect as the ones that govern nature. Unfortunately, our lawmakers govern us, and they are very imperfect.

My point is this; we are still going to pay regardless. We will prop up the auto industry whether it succeeds or falls. If it does indeed fall, the federal government will be the owners of the auto-industry. The new CEO will be the “Minister of Interior Production.” We pay. And we pay. Those are the options. That is the decision formulated by the brightest minds in Washington.

Never mind that the economic environment in our country can no longer sustain our automotive industry. It is not even supported by the current economy and consumer choice. Alas, that is where our tax dollars come in. Once again, we pay. Once again, they are the lawmakers.

The Democrats are stipulating that benchmarks will be drafted so that they will have major say so on executive pay, bans on stock dividends while the loans remain outstanding. They would even have to seek government approval for any business transaction of $25 million or more. The new “Minister of Interior Production” can also convene on meetings of stakeholders in the auto-industry.

These are all just concessions, of course. The real problems are not being addressed. That includes our trade policies, where we remain at huge disadvantage, and our corporate tax that handcuffs us in the global market. It’s the second highest in the modern industrialized world. Why, to protect unions so they can make $85.00 an hour of course.

And it is union labor has driven the auto-industry off a cliff (no pun intended). When an average foreign mid-size car be built in the South, where the work force is labor free, and can offer $1200-1800 more in modern features because that money is not used to pay inflated labor cost, pensions, and retirement, it is a no-brainer for the consumer.

I am as patriotic as any American. I buy American products and support America. However, I own two Toyotas — don’t worry they were built by American labor. Furthermore, by me purchasing the Toyotas I helped to feed American families and helped to secure a number of jobs for Americans. I chose not to buy a car with vastly limited features at a higher cost and, best of all, the market provided me that choice.

That is the fundamental problem that is facing our American auto-industry. It is a failed model from antiquity and no amount of money, oversight, or restructuring will change that. The industry must adapt to the demands of the modern consumer or…we will support them, unwillingly, through our tax dollars?

Not quite the desired effect I had in mind.

Sadly, that is the reality of the situation. For years the Democrats bought union workers with handouts and protection. It looks like now we will be buying their support for them.

Comments :

6 comments to “Has it really come to this, America?”
Blueskyboris said...
on 

"That is the fundamental problem that is facing our American auto-industry. It is a failed model from antiquity and no amount of money, oversight, or restructuring will change that. The industry must adapt to the demands of the modern consumer or…we will support them, unwillingly, through our tax dollars?"

Unfortunately your argument gets stuck on the shoals of reality. The Big Three were PROFITING before the dramatic increases in the price of oil. Considering that oil prices were still high just before the finanical crisis, we can comfortably conclude that the Big Three have been whacked with a double whammy. High oil prices = less demand for SUVs. Finanical/econonmic crisis = dramatically less demand for cars and trucks (even Toyota and Honda are hurting).

Blueskyboris said...
on 

"These are all just concessions, of course. The real problems are not being addressed. That includes our trade policies, where we remain at huge disadvantage, and our corporate tax that handcuffs us in the global market. It’s the second highest in the modern industrialized world. Why, to protect unions so they can make $85.00 an hour of course."

And increase the average wage well above where it would be without unionized labor, something I'm sure that you benefit indirectly.

You know what I think. I think your irritation is driven by envy. Envy of those at the top of the labour market making 85 dollars an hour. Envy that their high wages increase your wage/salary high enough so that you can live comfortably.

Blueskyboris said...
on 

"My point is this; we are still going to pay regardless. We will prop up the auto industry whether it succeeds or falls. If it does indeed fall, the federal government will be the owners of the auto-industry. The new CEO will be the “Minister of Interior Production.” We pay. And we pay. Those are the options. That is the decision formulated by the brightest minds in Washington."

The Chrysler bailout was successful. We didn't travel down your logical slippery slope of having to pay and pay and pay. Within five years and after some restructuring, and AFTER REPAYING THEIR LOANS, Chrysler turned a profit.

You guys really need to stop lying.

LoozianaJay said...
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"And increase the average wage well above where it would be without unionized labor, something I'm sure that you benefit indirectly. "

No. Where did you pull that from? I'm not going to research it for you but you should look into San Antonio, Mississippi, South Carolina, Tennessee, etc., and see where the wages are compared to union-labor.

They make a good living while producing a superior product because of the cost on labor can be reinvested back into the automobile.

I really question your mental stability if you think there isn't a fundamental problem with our labor infested autoindustry.

I do agree with your double whammy statement. But am I to believe that is the problem? "Nothing to see here folks. Now move along."

And we're not lying. You should start reading.

Blueskyboris said...
on 

"No. Where did you pull that from? I'm not going to research it for you but you should look into San Antonio, Mississippi, South Carolina, Tennessee, etc., and see where the wages are compared to union-labor."

Are you implying that workers don't move to find better paying jobs? And are you implying that the auto workers in the South aren't demanding the same pay as the unionized labour in the north? Please, give your head a shake. The auto-manufacturers moved South to save on shipping costs for an expanding market and to pay non-factory, supplier workers less. Yeah, if you're a required, skilled worker in an auto-factory in the south you are probably making the same wage as your unionized cousin in the North, but at the expense of everyone else.

"They make a good living while producing a superior product because of the cost on labor can be reinvested back into the automobile."

No, the wages of the non-essentials is being revinvested back into the automobile. They get paid less so that others can make a profit.

"I really question your mental stability if you think there isn't a fundamental problem with our labor infested autoindustry."

Of course you do! You ignore the fact that a) the average wage is kept high because of high paying unionized labour and b) that a loss of that labour would cause a severe depression. You have to attack me ad hominemly!

"I do agree with your double whammy statement. But am I to believe that is the problem? "

Why wouldn't you? Are you denying that the big three were profiting before the double whammy?

Blueskyboris said...
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Those who repeatedly ignore the arguments or repeatedly provide no counter-argument, ARE LYING. They are lying to themselves, because they are not open. They don't want to listen, because they know that their arguments can not stand up.