Bailouts are stupid. With very few exceptions, they will only delay the inevitable. I can understand some government injection of money to keep the credit markets from completely freezing up and affecting the ability of businesses to conduct day-to-day operations. I can’t, however, see any rational reason to apply this to businesses in general. Businesses should succeed or fail on their own merit. If you can’t run your business profitably, then you shouldn’t be in business.
Bailing out the auto industry would be a huge mistake. The foremost reason for the auto industry’s current dilemma is labor cost. There’s an article by the Heritage Foundation that clearly and convincingly describes this. It’s almost unbelievable what the typical auto worker is making for a relatively low-skilled job. Overall compensation is almost $75/hour. Their healthcare benefits are beyond belief. For full medical, dental, eye care, etc., they pay only $10/month or $21/month for a family. That’s sickening! And get this. If they’re laid off, they get 95% of their pay not to work. Can you believe that? No wonder they don’t mind getting laid off. They’re basically drawing full pay NOT to work.
So what will giving the automakers billions in bailout money do for them? It’ll let them continue to operate on their current unsustainable labor contracts. Basically, the taxpayer is going to continue to subsidize the outrageous benefits package of the UAW. The Democrats control both Houses of Congress and the UAW and other labor unions own the Democrats. Do you hear any Democrats talking about letting the companies reorganize under bankruptcy law? The Democrats and unions don’t want anything to do with bankruptcy. Bankruptcy will allow the companies to reorganize and become competitive again by renegotiating their labor costs.
All you folks that voted for Democrats can blame yourselves when you see your taxes and wealth being redistributed to your poor old union laborers. Whether you want to admit it or not, you voted for Socialism and now you get to reap its benefits. What was the Democrat’s mantra for the elections, “Change You Can Be Deceived In”?
