Why Nobody Wants to Bail Out Automakers, Except Bureaucrats

by Kaz Vorpal

One thing you’ll notice about the debate over bailing out the automakers is that, even more than in general, everyone’s against it except corrupt politicians, panhandling automakers, and monopolistic union officials.

That’s because it’s a lose/lose situation if we do, but things might actually get better if we don’t.

First, let’s consider the big, fat lie that three million people would be put out of work.

We’ll ignore (for a moment) that bankrupcy will actually keep them in business and let them become more efficient.

Let’s pretend, instead that the automakers would actually [poof] ceased to exist. Only a couple hundred thousand workers, not three million, actually are employed by those car companies.

If the companies vanished, then all other 2,800,000 workers would not only continue to have jobs…

They claim three million jobs are at stake, but the bailout would actually cost jobs, and make a few union management types rich

…but probably end up with better versions of their jobs. Why? Because people wouldn’t stop buying cars, they just would be buying DIFFERENT cars. Cars that need dealers, mechanics, parts sellers, and all the other jobs that the car companies are dishonestly counting as “three million jobs”. If you don’t buy a car from the Big Three oligopoly of panhandlers, you’ll buy one from someone else, instead.

Of course foreign cars often don’t need repairs and parts as often as American cars, but THAT would represent a savings for americans in general, that would create more jobs.

But, of course, the Big Three are in ZERO danger of magically vanishing.

Instead, they’d have to file for bankrupcy “restructuring”, which would be a way to allow them to fix a lot of the stupid inefficiency that laws and bureaucracy have trapped them with, WITHOUT them having to steal twenty five billion dollars (a number that will grow) from you and me, and then have Big Brother socialize them with mandatory “changes” that don’t represent what we consumers want, anyway.

And…well, really, that’s it. There are no other excuses for squandering $500 from the pocket of every middle-class family on yet another socialist bailout. Just “three million jobs” that is really only a couple hundred thousand jobs that would not go away, anyhow.

Sure, I could point out how restructuring, instead of a bailout, would break the back of the UAW monopoly, which forces American car companies to pay nine times as much for labor as foreign car companies. And how the UAW is therefore bribing the Democrats the way the Big Three automakers are bribing the fake-Republican neocons…which might just happen to be why they are all for the bailout, when everyone else is against it.

But, really, it boils down to “three million jobs is a lie”.

In fact, it boils down to the fact that americans would probably GAIN jobs from letting GM file for restructuring, while we will LOSE jobs by squandering more money on the bailout, which will ultimately come out of YOUR pocket, and mine. When the government wastes money, we lose the opportunity to spend the money on actual, productive things that employ people.

We need more economic freedom, to regain true American prosperity, not more handouts lifted from our own pockets.


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0 Responses to Why Nobody Wants to Bail Out Automakers, Except Bureaucrats

  1. ramjaw November 23, 2008 at 5:23 am #

    You’re being slightly disgenuious with the jobs conclusion you make. While I agree that bankruptcy is the best option, somewhere around 3 million jobs would be lost in the short term because infastructure is simply not there to accomodate the change from one parts supplier to another. Restructuring will probably create more jobs in the long run but “beaurocrats vote for a bailout because they don’t want to see this recession getting significantly worse. I think the best compromise is somewhere in the middle: government assisted bankruptcy.

    Also, the mean pay per hour is significantly inflated for domestic auto companies because a lot of that pays retired workers, which younger foreign manufacturers don’t yet worry about. The median is much more accurate to show average worker salary.

  2. Kaz Vorpal November 25, 2008 at 1:31 am #

    You could argue that, in the very short term, some portion of the other 2.8 million jobs would be lost, but it’s absolutely silly to pretend all, or anything close to that, would.

    And that’s only if the automakers vanished. In reality, people absolutely would buy cars from the three companies during the restructuring, despite the fact that they do not /deserve/ to have cars bought from them. In fact, sadly, people will probably go out of their way to buy them, because they would want to “save” the companies by “buying American”, however unamerican the entire Buy American form of affirmative action may be.

    And no, the media is not average, because the ridiculous average /should/ include the laughable amount of pay given to retired workers, workers who are laid off (who get up to 90% of their pay, while laid off), et cetera. A restructuring would free the companies of much of that nonsense, again better for them.

    Meanwhile, the bailout will MAKE the recession worse. Guaranteed. Socialism always harms an economy…and, in this case, as with the housing bailout, it will be like leaving a gangrene-ridden arm attached to the body, when it NEEDS to be removed.

  3. thepoliticalcat November 27, 2008 at 5:40 pm #

    Vorpal, your arguments don’t hold water. The auto industry is one of the last remainders of the manufacturing sector, and, as ramjaw points out, the claim that these workers make $70 an hour has been thoroughly debunked. On average, they make $28 an hour, which makes the industry the last blue-collar industry with decent wages. Moreover, the number affected is under, not over-estimated. In addition to the suppliers and parts manufacturers who are enmeshed with the auto industry, the big 3 will definitely seek to layoff older workers (who, with their higher skillsets, earn higher wages AND are more expensive in terms of health care). Retirees might well lose their pensions and benefits and laid off workers will be covered under the new agreements which would strip them of health care (and give them COBRA instead, which means 18 months of paying for benefits that they might not be able to afford and certainly won’t be able to replace when they expire as they are unlikely to find other jobs that pay as much). Add the impact on towns in the rust belt as many workers slide towards recession and poverty, causing local industries to crash and burn along with them, and you barely have the outline of the nightmare. Socialism works just fine in Scandinavia, don’t you think? So, just whose “peace, freedom, and prosperity” are you espousing? It certainly doesn’t seem like the working person’s.

  4. Kaz Vorpal November 29, 2008 at 1:49 am #

    First, the $70 an hour includes all of the benefits the workers are forced to take in lieu of money, by the UAW monopoly.

    When a worker is laid off, he gets up to 80% of his pay while he sits idle, a ridiculous situation that burdens no other industry.

    When a worker retires, the auto industry itself continues to pay him for the rest of his life, again a ridiculous situation that burdens no other industry…in fact, TWO retired workers are sitting around soaking up automaker profits, for every one that is actually working…NOT COUNTING the laid-off layabouts.

    This is not “decent wages”, it is laughably extravagant wages, making for overpriced, low quality automobiles produced by unprofitable companies.

    And no, the older workers are not being paid more because of “higher skillsets”, but because of a worse-than-meaningless pay structure based on seniority, instead of skill and performance. It’s like a teacher’s union, except it’s cars being made stupid, not children.

    And no, socialism works horribly in Scandinavia…Sweden suffered its own Great Depression throughout the nineties, while we were thriving, because they had huge socialist programs, and we were reining ours in.

    And we have been suffering economically, in the last eight years, because WE have been expanding our socialism, while Sweden has had a mild recovery, because they reined theirs in.

    Socialism is a tyranny that ALWAYS makes things worse. History bears this out with almost perfect correlation.

  5. awwwwwcrap January 3, 2009 at 1:48 pm #

    the bailout is an illusion – its all about this one controlling power in our government restructuring its position in the good ol us of a with taxpayer money, it fully controls the economy and has created this economic uncertanty for its own gain, how do you get bodys for a volutier army with say iran? easy, cause high unemployment, this is simply a payoff for future auto industry layoffs, – and back to the government bailouts, simply restructuring its financial positions for more power, paid for with taxpayer dollars. i

  6. Paid For Opinions July 5, 2009 at 6:45 am #

    What a awesome find! I’m glad I found this The Peace Freedom & Prosperity Movement » Blog Archive » Why Nobody Wants to Bail Out Automakers, Except Bureaucrats blog.

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