Polemic®

There are several things wrong with this, but they all share the same common denominator, and it’s one that seems to underly the same several things that are wrong with just about every Republican idea these days: it completely ignores the lessons of the last 20 years.

First—I’m certainly not opposed to canning the management and leaving the shareholders and bondholders with nothing. But let’s say we have a “managed bankruptcy.” Without some kind of special loan facility with the government (does any of this violate the WTO?), the reorganized companies will not be able to get cash cheaply. So, the $2,000 per car that Romney says is extra labor costs on the car could just as easily end up being debt service costs.

If the reorganized companies can’t get cash, they won’t get off the ground and they will be swallowed by other automakers, or simply killed by them. So, for that to work, there still needs to be something like a “bailout.”

Second, the Republicans are blaming labor. Funny that the whole economy was running smother when labor was stronger, isn’t it? Merely lowering the labor costs a little bit isn’t going to make American labor affordable. Even if other countries paid their workers the same amount, their employers have less overhead because their safety requirements are virtually nil. But they don’t. They pay way less. They can externalize more costs into the environment and on to the workers. Worse, in more advanced countries, the employers don’t pay for health care!

Third, profit sharing for the workers? That idea died with Enron and its corpse is burning in the fires of the recent stock market. What good are stock options to line employees who have virtually no control over the management of the company. Their incentive for good work is not to get fired. If part of their income is controlled by board members looking for short term earnings over long term gains, they’re screwed.

The only way to make that work is to make the companies a German-style corporation where the workers get seats on the board. (In Germany they get the seats WITHOUT owning shares. Here, they theoretically would have to.) Do you really think that the Republicans would support that, given the precedent it would set? Haha.

Fourth, the UAW workers are only a small portion of the people that would be impacted by the collapse. Everyone employed by a dealer, supplier, or vendor would be hurt or wiped out. Everyone who lives in a community whose economy is driven by the foregoing would be hurt. The only representation those people have in any of this is through the government.

Is this to say they should be bailed out with no strings attached? No. They should be bailed out on the condition that they agree, not as a tree-hugger issue, but as an issue of national security, that they work to immediately maximize the fuel efficiency of their cars, continue to recognize their labor agreements, maybe even let workers on the board like we were talking about.

Oh, and it wouldn’t hurt to take away the responsibility of health care from employers, would it?