Why Democrats Are So Eager to Save Detroit Auto Makers

I live in the Detroit suburbs. Practically everyone I know (or am related to) either works for one of the “Big Three” or a supplier. Things are really tough here. They have been for several years. My in-laws depend on their GM pension to make ends meet. Their benefits have been getting cut regularly. They are really worried. They are really hurting.

But, we are all conservatives. We have principles. And we know full well that the unions are largely to blame for the current mess. I can’t tell you how many anecdotal stories I’ve heard over the years of people getting paid lots of money to sit at their desk and pretend to work. Laughing about it. Even getting paid not to work, based on union-negotiated “jobs banks”.

So, as much as this personally is hurting me, my livelihood, my family, and my friends, I feel that the bailout is a bad idea.

Heck, our property values have been hit so hard its tough to see it getting alot worse. We will survive. The unions need to to be dealt a nearly fatal blow. They are corrupt. This might be the only chance for that to happen.

Oh yeah…and there’s this little problem the unions/Democrats’ primary campaign fundraising machine…have with losing their jobs:
http://www.cbsnews.com/stories/2008/11/12/politics/otherpeoplesmoney/main4595068.shtml?tag=topHome;topStories

One of the best reasons why Detroit automakers should not receive a bailout can be found in a General Motors “Jobs Bank” program that, bizarrely, pays employees not to work.

A beneficiary of that program was someone named Jerry Mellon, who worked for GM until his division merged with another in 2000 and he was no longer needed. Except for a brief period in 2001, Mellon received his full salary for not working, which reached $64,500 a year by 2006. Include benefits, and the annual cost to GM exceeds $100,000.

To earn his pay, Mellon was given the formidable task of showing up in a windowless shed, sitting at a table, and doing nothing for eight hours a day for six years, according to a profile in the Wall Street Journal. Jobs Bank employees have the option of attending classes teaching such important manufacturing skills as dealing blackjack and poker. Mellon spent part of his time reading Reader’s Digest, learning how to play Trivial Pursuit, napping on a makeshift bed of chairs pushed together, or simply staring at the wall for hours at a time.

Damn CBS neocons

I know GM doesn’t want to screw over the pensioners, but the UAW has left them no choice. If they declare bankrupty they will have the chance to build quality cars. They don’t have that now.

Hmmmm. Where’s larry?

Scott: Not sure but I bet Obama could buy it with his leftover campaign cash:

Like the name “BM?” As in bowel m…….

Restructuring Bankruptcy isn’t anywhere as easy to do as it is to say. Yet people toss it out like a sure fire fix.

Setting aside the possibility for chasing away a large portion of the customer base for some time, Restructuring Bankruptcies typically need gobs of capital to execute. Since the auto companies have no way of acquiring capital now, they sure won’t be able to do it after declaring bankruptcy. That means outside capital is needed. Where is that going to come from? There’s only one place. Taxes. And likely more money to float through the Restructuring than is being asked for now.

If you really are serious about the union being the cause. Give the auto companies the tools to bust or at least weaken the union. They can get the more aggressive concessions they need to be competitive and the uncertainty that bankruptcy brings is avoided.

To bring competitive parity, you have to strip retirement healthcare and pension from people close to retirement. They have nothing to lose from striking the company into bankruptcy if you try to take that away from them. So getting tough isn’t going to do it, unless the laws are changed to break a strike.

If the Democrats are left to craft the bailout in January, I doubt the union will be weakened by any measure.

Actually the restructuring cost will be well over $25 billion.

They didn’t come to congress to get $25 billion and expect to come back anytime soon.

So there’s a choice here. Give them $25 billion now and temper the terms of the bailout. Or, if they can survive a few months, they’ll probably need a lot more come January in a deal with the Democrats which will seek to control them and create a situation where more money will be needed later. The price will likely be a stronger union and making green products no one wants on the scale of a GM.

A second chance bailout vs. a nationalized auto industry. Which is worse?

The Precedent here is that Chrysler got its bailout, recovered, paid it back, and learned its lessons. So much so they were raided by Daimler. If Daimler hadn’t gutted them, they wouldn’t be in trouble now.

Taking a chance on that is worth avoiding the Democrats getting the government intertwine permanently

Larry, the idea that the US auto industry is critical to national defense is a good one, but it’s complicated by the permitted death of the US steel industry, ironic in the face of Democratic Party reluctance to drill and utilize America’s national resources for national security (rather than fund nations that don’t like us), as well as other examples of scenarios where “critical to national defense” was or is ignored.

Ultimately, I repeat that the Democrats in Congress cannot individually or collectively afford not to give unlimited funds to the big three for if one of them closes, and their union workers are unemployed then the organized labor campaign funds those members of Congress get are reduced=power reduced.

However, every time the Democrats’ Congress gives money to banks, lending institutions, automakers, insurance companies, etc., it reduces the ability of Congress and incoming Pres Obama to do anything with their domestic agenda as there’s less funding for that.

Certainly there’s a conundrum of how to spur investment in a nation where investment is lagging while at the same time increasing taxes on the 5% of the nation that does the most investing and increasing taxes on gains from investing. The two ideas contradict themselves:
invest to make more money
tax investors making it harder for them to make money

The Democrats’ Congress simply cannot do both. They also cannot cut pork from their budgets as that reduces further their individual ability to market themselves as locally advantageous to voters in the next election.

Oh, the big 3 will get their money so the unions keep their power base and the Democrats get their campaign funds, but it’s gonna be REAL REAL REAL interesting when the big 3 come back for yet MORE money in a few months. The well is only so deep, and sooner rather than later the average American (those 95% of us who were promised tax cuts by Obama) are gonna ask why rich people get bailouts, rich people do not get the tax cuts, and instead our cost of living skyrockets and our job security plummets.

Oh yeah, Larry, when it comes to national security, manufacturing, etc., we here in Akron/Canton/Youngstown/Cleveland know a bit about letting industries die despite their importance to national security.

If the taxpayers are forced to bail out the big 3, then everyone will boycott their products because they don’t want to pay twice–once through taxes and a second time through buying the product. At least I will and I think lots of people will join me. So say the goodbye that’s been coming to them for a long time.

And, hopefully, enough public pressure will convince the dems that bailing out their union buds is not a wise decision for their political future.