I was directed by a Snopes article to a commentary written by Ben Stein at Yahoo Finance about why America needs to bail out the big 3 automakers (Ford, GM and Chrysler). I do recognize both sides of the argument (for and against the bailout), and Ben articulates the reasons FOR the bailout fairly well.
In brief, here are some of his main points:
To allow our largest heavy industrial component to fail at this delicate moment is suicidal. To put a couple of million more Americans into unemployment is just not sensible. Mr. Barack Obama is talking about public works projects to employ hundreds of thousands of Americans -bridge building, school building, airport building. These projects take time to start, disrupt local community life, and are famously wasteful.
Why not be smart about it and NOT LET AMERICANS GET UNEMPLOYED IN THE FIRST PLACE? (Please pardon the shouting.) There are millions of Americans already hard at work making great American made cars and trucks. Why not keep them on the job? Wouldn’t that be smarter than allowing the whole upper Midwest to fall into oblivion and then rescue it over a fifty year period?
I didn’t actually think of it this way in relation to Obama’s job creation goal. Granted, it still doesn’t answer the question of whether we should let the market create jobs (and run on its own) or the government, but we ARE in dire times economically here and something needs to be done by someone. And when you can save millions of jobs in one fell swoop versus having to create them one-by-one, then I guess it does make sense. The next question is HOW to do it so you don’t make companies dependent on the fed (much like welfare can (and does) make some people dependent on the government rather than self-sufficient).
Stein then counters arguments by professors by pointing out that schools get hefty tax breaks on donations, but I think he was speaking directly to some critics and left out some key information for the average reader. He then went on to question the fed’s decision to fund bailouts for the financial sector, operations in Germany, and of course Iraq and other war-torn countries, but not provide aid to our own fellow countrymen.
Ben then counters one of my own arguments regarding why the UAW won’t make concessions regarding line worker pay and retirement benefits. I do think changes should be made to future workers, but Ben points out an interesting question if we went and changed/canceled the benefits for current retirees and workers:
And what about the retirees? They get the benefits they were promised. If those can be taken away, then whose benefits are safe? And do you think it will be cheaper if the government takes on those costs directly?
I guess I wouldn’t want to sign on to a company or federal agency in part for their benefits, only to have them pulled away when I need them the most. The automakers and UAW made their financial mess years ago, but the DID make a promise to those employees. The question is whether they will learn from those financial mistakes and change for the better. Will the automakers and UAW actually slim down so they can remain competitive in today’s economy?
Well, with Bush’s new aid package, they only have about 3 months to prove it.