Some questions for Mr. Diersen on the Automaker Bailout Mess

by Eric Kohn

I've been receiving Dave Diersen's news clips for a few years now.  I read them every morning, as they are an excellent and informative conglomeration of the day's happenings.  I don't always agree with Mr. Dieresen's editorial point of view, but I enjoying consuming and computing it every day along with his regular news digest.  His regular defense of conservatism is, at the very least, always noble.

My primary source of consternation in the presidency of George W. Bush - and from what I've been able to gather, an aggravation shared by most conservatives and limited-government advocates - is the incessant government interventionism in economic matters.  The recent bailouts of financial giants, the banking industry and others that seem to have done little but artificially forestall their inevitable further downturn, if not full collapse of these entities, all with the average taxpayer picking up the bill.  It other words, it’s just costing us more to eventually arrive at the same destination.

We keep hearing an array of individuals parrot the idea that these businesses are just "too big to fail".  Frankly, I don't think there's any business that's too big to fail.  Failure of business when it becomes too inept to effectively and efficiently function is a part of the free-market economics to which American conservatives and the Right allegedly subscribe.

So, which this in mind, I've found Mr. Diersen's thoughts on the financial troubles of the auto makers and the efforts of Congress to make them the next recipient of a federal, tax-payer funded bailout to be, at the very least, a little perplexing.

Stemming from his elucidation today of items that 'are not planks of the national or state GOP', I can't help but be left a little befuddled and with a few lingering questions:

(My questions follow Mr. Diersen's statements and are in italics)

-- Demonize/denigrate GM, Ford, and Chrysler; demonize/denigrate their products; demonize/denigrate their employees; demonize/denigrate their retirees; demonize/denigrate their suppliers; demonize/denigrate their stockholders; demonize/denigrate those who sell their products; demonize/denigrate those who own their products; demonize/denigrate those who service their products; demonize/denigrate etc.

I think calling it "demonization" and "denigration" is a tad over the top, but I get what Mr. Diersen's driving at here (pardon the pun).  While perhaps there are some fringe voices whose intention are the bad-mouth and put down the Big Three, I certainly don't think that's representative of the mainstream of opposition to the current, government-driven course of action in this mess.  My question is this: are these corporations beyond reproach and immune to criticism of the manner in which they've chosen to run their businesses?

-- Drive GM, Ford, and Chrysler into Chapter 11 bankruptcy and then into Chapter 7 bankruptcy

Why does Chapter 11 bankruptcy exist if not for the ability of businesses to effectively reorganize themselves when they've essentially managed their institutions into a financial corner?  Chapter 7 - which is not the stage we're at in this, anyway - not withstanding, why shouldn't the Big Three file for Chapter 11 if they've been terribly financially mismanaged and are in debt up to their eye-balls, and thus take advantage of the opportunities that exist under Chapter 11 to reorganize into fiscally viable entities, all while avoiding the wasting of more taxpayer dollars to prop-up institutions that are undeniably in a downward spiral?

-- Demonize/denigrate all unions, demonize/denigrate all union members, but especially demonize/denigrate the UAW and its members

Again, I think "demonization" and "denigration" are over the top, but is the UAW also really beyond reproach and immune to criticism when the average UAW worker makes $74 per hour - a rate sizably larger than those employed by the more financially sound foreign auto makers?  Do you not think that these artificially inflated wages and the UAW bear any culpability in the fiscal downfall of the Big Three?

-- Argue that the design, engineering, production, distribution, marketing, and servicing of the vehicles that America needs is NOT vital to America's national security

Ironically enough, I heard Rep. Dennis Kucinich making the exact same argument in support of the congressional bailout of the Big Three.  Inasmuch as I consider Kucinich a good bellwether of really bad ideas (and usually ones that originated with Karl Marx or V.I. Lenin), I'm a little wary when I see a known conservative advocating the same positions as the Congressman from Mars.  I have a questions related to this point, but in the interest of consolidation, I'll let it flow from Mr. Diersen's next comment...

-- Turn over control of the design, engineering, production, distribution, marketing, and servicing of all the vehicles that America needs to foreign companies, that is, to foreign countries

Are you opposed to free trade and the right of the American citizen to seek the purchase of goods from any manufacturer and retailer of their choice?  And, in turn, are you advocating protectionist policies such as the type that, in part, brought about and prolonged the Great Depression?  While it might have been true a few years ago that the vehicles manufactured by the Big Three were inferior to foreign-made models, I'll cede that this really is no longer the case.  That being said, due to the inflated prices of the American made vehicles that stem from the higher cost of labor and production associated with the manufacturing of these vehicles, is it not well within the rights of every American citizen to seek both the best product AND the best price available, be that from an American manufacturer or a foreign one?

+++++

I have as much sentimentality for the paragons of American development and innovation as manifested in our automakers as the next patriotic American.  But I'm not going to let my sentimentality override my principles of limited government, free minds and free markets.  If the Big Three automakers and the UAW have brought themselves to the brink of failure through their own fiscal ineptitude, why is it incumbent on the average American citizen to prop them up and, in reality, only forestall what is mostly likely their inevitable demise?

If we believe in the free market, then we should let it work and end this preposterous interventionism.

Cross-posted at EricKohn.com

Comments

[rightwinger]

I don't want to speak for Diersen, but it's probably because he's pro-American. He believes in American companies and the American worker. As do I. That is a conservative trait. What you are saying is mostly libertarian. Although conservatism and libertarianism are often the same or at least very similiar, in cases like this they split.

Now, had Wall Street, etc. NOT got a bailout, I would probably be on your side. However, since they got one, you're damn right the Big 3 should get theirs. It's only fair or since Wall Street et al got a bailout, fairness is off the table.

Furthermore, the $74/hour is wages + benefits and not just $74 in wages alone. You know what I say, big deal. Who doesn't want to make more money. Do I agree that they should be moved to a 401k instead of a pension and take up more of the medical costs as retirees - yes I do. But, before you and others start calling and blaming the unions for being greedy please do the same for Wall Street, the ones who put us in a bigger mess than the auto industry.

I say this as a white collar worker too. I refuse and always will refuse to sh-t on the blue collar worker.

[Scott B.]

I will pay anyone seven cents if they can cite for me the constitutional authority for ANY of these "bailouts". Anyone?

[rightwinger]

Make it 7 dollars and I'll tell ya. Just kidding.

I agree. And in general I'm against them. BUT my point is, if Wall Street got one you're damn right BIG 3 get one too. I would've prefered no bailouts for anyone but that horse left the barn.

[Eric Kohn]

Rightwinger - So, are you contending that since we made the mistakes of bailing out those financial institutions, we should continue to to sink more and more taxpayer money into every company who comes groveling to Capitol Hill until we've taken our federal deficit to the ump-teen trillion dollar range and fully condemned our fiscal future (assuming we haven't done that already)?

The horse may have left the barn, but at some point don't we have to get off our duff, round that horse up and put him back in the barn? Or are we just supposed to let him run wild uninterrupted until he's lost for good?

eric

[Scott B.]

WWHCD?

What Would Hugo Chavez Do?

We do not even feign reverance to our founding ducuments anymore. Why are so many people on "our side" allowing themselves to be distracted by trivial arguments and not addressing the constitutionality of our governments actions? This is all disgusting.

It's the Constitution, stupid.

[rightwinger]

I will always disagree with the bailout of the financial instituitons. That should never had happened. Saving the BIG 3 is much more important for this country. I can't think of another industry that I would save, so I have no problem with this being the last one.

[rightwinger]

Also, before anyone starts calling me (and Diersen) a protectionist, I say fine I have no problem with that label. Furthermore, the so called "free market" people (not necessarily the ones on this board) who say that's what they are but yet had their hand out and wanted government intervention i.e. bailouts, lost all credibility and will never have a leg to stand on again. What they did was protectionism and at a higher cost than any other protectionism ever could have cost. Like I've always known and said about the Wall Street slim, it's the free market when it's our jobs on the line (outsourcing and importing of cheap labor) but when their ass is on the line, then government intervention (welfare and corporate protectionism) is ok and a must. Screw them!

[rightwinger]

One more thing (sorry we can't edit previos posts). I agree with Scott B. However, if we're going to have socialism in this country (which make no mistake we have had for years and just now everyone is realizing), then lets a have real socialism and give to the poor from the rich. Not the middle class to the rich. That's reverse socialism. At least give to the little guy. If that sounds ridiculous, it is but that's what's goin' on.

[rockdalian]

This is an example of the scope of the problem the automakers have agreed to for years.

22 Pounds of UAW Rules and Regulations

"Ever wondered what a UAW contract looks like? Here is all 22 pounds of it (in this case, Ford’s 2,215 page 2007 master contract; Coke can is for scale and because I was thirsty)."

http://laborpains.org/2008/12/12/22-pounds-uaw-rules-and-regulations/

Let them go bankrupt.
And it doe not take a seer to see that the retirees and all associated costs will be foisted on the federal government, oops, I mean the taxpayers.

[Will from NYC]

this is all about union busting.. in writing.
Saved for the next election.

a memo the GOP released internally:

From:

Sent: Wednesday, December 10, 2008 9:12 AM

To:

Subject: Action Alert -- Auto Bailout

Today at noon, Senators Ensign, Shelby, Coburn and DeMint will hold a press conference in the Senate Radio/TV Gallery. They would appreciate our support through messaging and attending the press conference, if possible. The message they want us to deliver is:

1. This is the democrats first opportunity to payoff organized labor after the election. This is a precursor to card check and other items. Republicans should stand firm and take their first shot against organized labor, instead of taking their first blow from it.

2. This rush to judgment is the same thing that happened with the TARP. Members did not have an opportunity to read or digest the legislation and therefore could not understand the consequences of it. We should not rush to pass this because Detroit says the sky is falling.

The sooner you can have press releases and documents like this in the hands of members and the press, the better. Please contact me if you need additional information. Again, the hardest thing for the democrats to do is get 60 votes. If we can hold the Republicans, we can beat this.

[Don Castella]

Big labor bears a significant share of the responsibility for the inability of US automakers to effectively compete in the US market. State and Federal Governments also bear responsibility for their draconian regulations and crushing tax burdens.
Nevertheless, absent complicit industry management the Big Three automakers might still be healthy or at least viable.

The notion that the GOP memo above is a smoking gun might be laughable if it weren't so utterly absurd. Labor has been a wholly owned Democrat subsidiary or vice versa for decades.

[Nancy]

I want to bail out Dierson. I agree with him 99.9% of the time, and so do most of my Christian friends. Can I say 'Christian' on a blog?

Common sense tells us that we can't loose the auto industry. Think about it.

Common sense tells us we can't kill 50 million innocent babies and still have a thriving economy. Think about it, where are the 'children' of the 50 million dead, how many trillions did we kill?? We lost control 35 years ago when the Supreme Court declared themselves 'God', ruling who should live and die. Constitution . . please! You think killing innocent babies is in the constitution? You've got to have a whole in your head if you think this county is going to outlive billions of Muslims.

You guys are so far off the mark! PEOPLE are our greatest resources! Pick up the Bible! I know, there's no money in it. FAITH my friends.

God is 'pro-life'. Let me quote you a German from B4 WWII: A man, whose family was German aristocracy prior to World War II, owned a number of large industries and estates. When asked how many German people were true Nazis, the answer he gave can guide our attitude toward fanaticism. ‘Very few people were true Nazis,’ he said, ‘but many enjoyed the return of German pride, and many more were too busy to care. I was one of those who just thought the Nazis were a bunch of fools. So, the majority just sat back and let it all happen. Then, before we knew it, they owned us, and we had lost control, and the end of the world had come. My family lost everything. I ended up in a concentration camp and the Allies destroyed my factories.’

We are told again and again by ‘experts’ and ‘talking heads’ that Islam is the religion of peace and that the vast majority of Muslims just want to live in peace. Although this unqualified assertion may. . . continued on www.catholicconvert.com