You would think I’d think a socialist style bailout of an industry where the workers make good wages with good benefits would be a great idea. But I just don’t see it helping. And for some reason it makes me mad that these companies set themselves up for this kind of failure again and again throughout their histories.* For a company that’s losing $1bil a month, I am unsure of what a bailout would do for GM. I await their proposed plans that are due sometime in early December. And I hope they do come up with an excellent plan that has a great chance of working. But I just don’t think it can be done.
* I read this evening that after WWII, a form of centralized/socialized pension was proposed, but the fear of communism was so great that the companies themselves said they’d take on the costs themselves instead. After that, we’ve had our Michigan Democratic Representatives and Senators (some of whom I vote for, so I guess I’m part of the problem), namely John Dingell (who has been in office since 1955), who has fought hard for the car companies and against regulation of any kind (I’m mostly talking fuel efficiency/emissions here), which automatically gets the car companies stuck in their ways, while the foreign companies continue to innovate. I don’t blame the UAW a whole lot here, because I feel like they took what they could get when it was available. I do blame the arrogance and shortsightedness of management though, in offering things without thinking about the future repercussions. Things like offering healthcare to employees in retirement was a way to avoid giving a wage increase, which in turn, made their numbers look better from one quarter to the next. The notion that this would become a crazy Pyramid scheme type situation never occurred to them, apparently. We should probably also investigate what kind of crazy compensation management gets. When Rick Wagoner states, upon being asked if he could give up his $2.2 million for $1 for a year, “I really hadn’t thought through that yet. I do have a son in college I have to pay for somehow,” I am highly confused by the state of things here. First off, does he really use his entire $2.2mil every year, and basically live paycheck to paycheck like the average working person, without having saved at least a little of that for his son’s college tuition? Secondly… well, I don’t know… Like I said, I am confused and a little bit weirded out that I’m siding with going for Chapter 11 bankruptcy here. I did hear a quote recently: “Capitalism without bankruptcy is like Christianity without Hell”… so, if we claim to be a free-market society, then all these bailout actions make absolutely no sense without allowing for intense government regulation and oversight. Otherwise, what’s the punishment for running your giant corporation into the ground? The solution to this needs to be giant systemic changes in the way things work (as far as government involvement in industry and universal healthcare), it seems, and it seems pretty impossible in our country.**
** I haven’t cited many sources here, but if you really want (feel free to ask), I’ll Google for the stuff I’ve read about these topics recently and give you a link.
