Posts Tagged ‘Auto bailout’

Bailout Fail

Friday, December 12th, 2008

When progressives have attacked Democratic leadership in Congress over the past two years, my instincts, by and large, have been to cut them [leadership] some slack. After all, it’s pretty hard to do much governing when the other party still controls the White House, and is also deeply unserious about governing from top to bottom. And God bless em, Senate Republicans sure went to bat for me:

An eleventh-hour effort to salvage a proposed $14 billion rescue plan for the auto industry collapsed late last night as Republicans and Democrats failed to agree on the timing of deep wage cuts for union workers, killing the legislative plan and threatening America’s carmakers with bankruptcy.

“We’re not going to get to the finish line. That’s just the way it is. There’s too much difference between the two sides,”  Senate Majority Leader Harry M. Reid (D-Nev.) announced after 10 p.m., concluding a marathon negotiating session that ended in gridlock. Reid warned that financial markets could plummet when trading opens this morning.

The crux of the problem, no joke, is that Democrats, UAW, and the Big 3 firms were looking to cut wages in a phased program to be completed by 2011, while Richard Shelby, Bob Corker, and Jim DeMint are demanding they do it now. So apparently, raising taxes on the wealthiest Americans during a recession is insane, but slashing middle class wages is just sense. Or something like that. John Judis has more:

Here’s what bothers me. Japanese companies, which for years have benefited from one-way deal by which they could sell cars in the U.S. while U.S. companies were stymied in selling cars and trucks in Japan, set up non-union plants in low-wage, low-education, right-to-work states where they can pay less wages and benefits to their workers. Of course, in Japan, these same companies recognize and work with unions, but not here, where they have a chance to undercut American firms that work with unions. Corker and these other great patriots want to allow these Japanese companies to dictate the wages and benefits that American companies pay their workers. It’s despicable. Imagine, for a moment, American companies being allow to operate in this manner in Japan or South Korea. It would not happen.

Country first, you betcha.

 

They Sux

Wednesday, December 10th, 2008

Patrick Appel, filling in for Andrew Sullivan writes:

It’s not the bureaucrats fault that the media market fundamentally changed. The big three stopped making a product Americans wanted to buy.

This last part, the idea that the Big 3’s problems stem from the fact that American cars suck, is just not true. Yes there was a period from about the mid 80’s to the late 90’s in which American cars were quite crappy, but that era has long since passed, and there’s quite a bit of demand for their automobiles. The F-150 is the best selling truck on the road, GM still has quite a bit of market share, and so on. Lots of people like GM and Ford made cars. Lots of people like Toyota and Honda made cars. The problem for the Big 3 is that the contracts made between management and labor in the 1970’s were predicated on the idea that the Big 3 would own a monopoly on the market forever, and that people would continue to buy their cars because they had no other choice. And if it didn’t wind up working that way, oh well, it sure made the bottom line look good th next quarter, and they’re long since gone. Let someone else deal with it if your insane assumption turns out to be, well, insane.

 

Wither the Hacks

Sunday, December 7th, 2008

Why do people take Larry Kudlow seriously?

[Sen. Bob] Corker wants Detroit to have the exact same compensation levels as the Japanese transplants in the non-union Southern states. That means moving hourly labor costs down from roughly $70 to $48. It means reopening the UAW contracts that have created the huge pay-gap between Toyota and GM. It means putting an end to excessive pension and healthcare benefits.

Sounds really serious right? Well, not so much. After all, hourly labor costs for American companies aren’t $70, indeed they aren’t all that much higher than Honda and Toyota’s labor costs, and the reason Toyota and Honda have lower healthcare costs is in large part a result of Japan’s system of socialized medicine, that effectively subsidizes a lot of those costs. But that doesn’t stop Kudlow, and indeed it shouldn’t, since he’s merely engaging in a conscious effort to muddy the facts of the matter and attack unions.

And wouldn’t ya know it, Jennifer Rubin swallows it whole.