We all know how hard it is to get by on tens of millions of dollars a year. That is why the Washington Post was near hysterical in its support of the Wall Street bailout earlier this month. They argued that if we didn't give $700 billion to the banks right away that all hell would break loose.
Those who wanted to put conditions that ensured that the money didn't go into the pockets of shareholders or top executives, or even that the bailout was done the right way through direct injections of capital (as it eventually was) were denounced as reactionary Neanderthals. So, the bailout went through and the Wall Street executives are now getting tens of millions in compensation, courtesy of average taxpayers.
Now the occasion comes to bail out the auto industry and the Post goes ballistic the other way. After all, the average autoworker makes $56,650 a year. That's almost as much as Robert Rubin makes in a day. Who do these autoworkers think they are?
There are serious issues that should be asked about any bailout of Detroit, but it is a bit obscene to see a paper that in both its editorial and news pages was an active supporter of handing tens of billions of dollars to rich Wall Street bankers suddenly turn around and get hysterical about the idea of helping workers making $57,000 a year. And remember, none of these autoworkers are responsible for wrecking the economy.
Instead, Obama needs to support GM with a temporary loan, plus serious restrictions on top executive pay, plus mandated balenced trade. That is all it takes for our auto industry to survive and thrive.
Lets let GM fail but prop up those vampires on Wall Street.
Excellent idea.
P.S. I am very happy with my Chevrolet.
And my girlfriends Chevy got 282,000 miles before she gave it away. Still see it driving around.
GM as an entity will survive for sure. too important for the US economy (counting how many people it employs).
But, why not let it go bankrupt. Allow the BK judge to rewrite previous contracts, shed legacy costs, brands/assets/plants and let GM emerge as a leaner entity.
because that is exactly what you are suggesting.
Imagine lowly workers making a livable salary. With decent benefits.
Yeah, lets get the bankruptcy judge to take that away from them.
The wages of autoworkers is not the cause of the decline of the American auto industry. The fact is that at one time high wages for basic steel workers and auto workers actually promoted increases in wages for workers in the electrical industry and steel fabrication industry. New auto plants in the US by foreign companies have significantly decreased the wages of industrial workers, as have outsourcing and the movement of industries overseas.
The fact is that GM has emphasized its market in China as its highest return. This may provide some balance but will not restore its financial stability. The risk of bailing out GM is the uncertainty of whether or not such an action will it have the desired impact?
One analyst projects: "It is a time to be extremely cautious, because except for the companies with the best balance sheets and liquidity, the risks are very high that they won't survive this downturn. That is true for auto companies as well as suppliers; demand is falling to a level lower than the bottom of the last cycle, in 1991. . So adjusted for size, this is the worst environment we've seen in 50 years. As an investor, notwithstanding all the bad news we've endured, there is still considerable risk out there, particularly for shareholders who, in the case of many of these companies, face the prospect of Chapter 11." http://online.barrons.com/article/SB122488828292068361.html?page=sp
Not that the manufacturing industry should not be supported by the government. I'd argue that there are better ways. Rather than spending by spout, most likely to the 'best friends' only, money should be awarded competively.
It happens every single time.
WAPO is just one more MSM outlet that needs profit, and the only way to get it, is to do as the Repubs say to do, and thats to have no integrity and promote a GOP agenda, then they'll fund them.
Sure theres a lot of jobs being lost in the financial sector, but those folks make more money, they have higher educations, and can pretty much get a job anywhere else for high pay. Autoworkers do not have high pay, and the line workers often dont have college degrees so the chances of them finding decent paying jobs after being laid off are slim.
Besides, someone has to force these buttmunches in Detroit to get back to producing GM EV1s and Ford ThinkCars which worked fine until they recalled them with no reasons except there wasnt any demand.
Go ahead and bailout Wall Street but not Detroit. Forget about America' love affair with gas guzzlin SUV's and blame the auto exec's for bad decisions. Stand by and watch JPMorgan horde their bailout money rather than free up the loan market.
As goes General Motors, so goes the nation.
Let me tell you, the view from Detroit is not pretty, and I'll take no pleasure as the rest of the nation follows our lead.