Much of the commentary on the proposed automaker bailout has focused on the injustice of bailing them out. Conservatives have blathered about autoworkers making $70 an hour. Liberals have pointed out how badly managed American auto companies are, how they doubled down on gas guzzlers at a time when cheap oil obviously could not go on for much longer.
If you don't think that was obvious, particularly if you think it's still not obvious, here's rhetorical question: Do you really think the Chinese and the Indians are going to stick with bicycles just so you can tootle down the block in your Hummer for a half gallon of organic milk?
Commentary about justice, including my own, misses the point. The decision whether or not to bail out the automakers is, like all the previous bailout decisions, about national self-interest. Would spending the money repay us in the long run? Would the bankruptcy of these companies contribute more to the bankruptcy of our entire economy than the cost of saving them? That's what GM wants Congress to think:
"It's about saving the US economy from a catastrophic collapse," GM chairman Rick Wagoner told the Senate Banking Committee.Even though it's short money compared to what we've already done, I'm not convinced, especially not under the management of the Bushists. I might consider a bridge loan to get us to Jan. 20 and a competent, much less crony capitalist administration.
Last, a few meta-comments:
- As usual, the conservative viewpoint is viscerally anti-union, and it gets its facts wrong. Autoworkers don't make $70 an hour. They average $28 per hour, or $56,000 per year if there are no furloughs and no overtime hours. The $70 per hour number includes the overhang from retired workers. Most of that is health care and would come off the companies' balance sheets if the U.S. had single payer health care.
- Government intervention in the marketplace can work, can improve our lives. The Clean Air Act and the Clean Water Act are good examples, even though they did not use efficient mechanisms that most economists, probably rightly, prefer. Both attempted to remove from profitability the exploitation of a common resource through price externalities. No, this isn't a non sequitur. If only the federal government had enacted stricter CAFE regulations, GM, Chrysler, and Ford wouldn't be in as deep a hole as they are now.
- The upshot: Industry lobbyists are never focused on the long run, or the carmakers and the UAW wouldn't have opposed single payer and CAFE the way they have. Don't listen to them!
Wagoner said the loans were essential to provide a bridge that can get the automakers safely across "the financial chasm before us," and promised "we will repay the taxpayers' faith many times over."it's bullshit. He can't possibly know this.
Update (11/24): Here's the straight info. Propagation of the lie continues unabated, of course.