Congress decided to put off a bailout for the auto industry? One idea being bandied about is to allow automakers to convert the $25 billion recently given them for research, design and manufacturing of more energy–efficient cars into the “necessary” bailout. That would get the funds into the hands of the Big 3 without a public outcry, and Congress could wait a few months until oil prices inevitably start back up to re-fund the “green” money. Americans, being as dumb as they have been proven to be, will buy this ploy without so much as a whimper.
In the meanwhile, the brilliance of Nancy Pelosi and her House cohorts continues to astound me. One of the biggest reasons that Detroit can’t compete with the likes of Toyota is that Detroit’s union labor is getting enormously high compensation and benefits in comparison to foreign auto makers. The only way that this can be resolved is if the automakers restructure themselves by going into bankruptcy and shedding themselves of these and other huge costs. Pelosi says she will not allow that to happen, so any bailout money given to Detroit will be absolutely fruitless, because it cannot resolve the major fundamental problem.
There are only three remaining avenues. One would be to nationalize and give government a total control over the automobile industry. Another would be to slap a tariff on automobile imports, but Toyota manufactures most of its U.S. cars right here in America. Or, the government could require that all auto workers in the country be paid at the same rate; that would force Toyota to increase its prices and thereby make Detroit more competitive in the marketplace. As a possible fourth solution, there could be some combination of the above three.
The infusion of taxpayer money will have no impact whatsoever on the fact that most foreign cars are better made; Kelley Blue Book has announced its top 10 brands for resale value, and not one car manufactured by the Big Three was on the list. The only other way that Detroit can compete is through outsourcing of jobs to foreign countries, where associated costs are lower. Ironically, that decreases the number of available jobs in Detroit, and Pelosi doesn’t want Detroit to go into bankruptcy and restructure because she wants to protect labor?
Some might try to put the blame for this economic mess on Treasury, or on the Congress. I know that I certainly did. Paulson did a miserable job of steering this economy, as far as I am concerned. The housing loan debacle that precipitated this situation certainly was within the scope of management and oversight of the Congress, but they consciously either ignored the warning signs or they deliberately chose not to do anything about the looming crisis.
So, I blamed those people and it was easy to justify my blame. But, I was wrong. We just went through a painful election process and WE chose not to turn the bums out of office; the blame for this mess belongs on our shoulders, not theirs. And, until WE are prepared to take the responsibility for our own actions, or the lack thereof, we need to learn to just bend over on the Detroit freeway and take what’s coming to us.
Just to add a little salt to the wounds, if you think for one second that the Detroit mess is the last mess we are going to face in this “economic downturn,” you’ve got another thing, or two, or three or more coming. Let’s start with the CitiBank thing. Let’s follow that up with a dismal holiday season forecast coupled with impending mass layoffs and manufacturing and retail bankruptcies, and let’s add a big, fat income tax boost to the picture to try and cover all of this.
As a play on Al Jolson’s famous words, “Baby, you ain’t seen nothin’ yet!”
That's MY AMERICAN OPINION, respectfully submitted.
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