The GOP's Sham On The Auto Bailout
by Deacon Blues
Several GOP senators think it would be better for the Big Three automakers to go bankrupt and reorganize, than get help from the government. Two of them, Senators Jon Kyl of Arizona and Richard Shelby of Alabama are dead set against any bailouts for the American automakers.
Sens. Richard Shelby of Alabama and Jon Kyl of Arizona said it would be a mistake to use any of the Wall Street rescue money to prop up the automakers. They said an auto bailout would only postpone the industry's demise.
"Companies fail every day and others take their place. I think this is a road we should not go down," said Shelby, the senior Republican on the Senate Banking, Housing and Urban Affairs Committee.
Sure, companies that employ millions of Americans fail every day. Yup, let's let the markets work, huzzah, huzzah. We can't have corporate welfare now, can we? But it's OK to dump $10 billion a month into Iraq.
"They're not building the right products," he said. "They've got good workers but I don't believe they've got good management. They don't innovate. They're a dinosaur in a sense."
Added Kyl, the Senate's second-ranking Republican: "Just giving them $25 billion doesn't change anything. It just puts off for six months or so the day of reckoning."
Too bad neither of them feel that way about shoveling billions into fraudulent contracts in Iraq.
Note that Kyl had no hesitation shoveling $700 billion of taxpayer money to Wall Street for their misuse because he obviously though it would “change” something in their behavior, but now doesn’t want to help prevent the loss of millions of auto-related jobs for a fraction of that amount. At least Shelby is being a little more consistent here. But neither one are being truly honest or smart here. Both see bankruptcy as a way to destroy the United Auto Workers, and yet neither see a danger from foreign investors swooping in to buy up these American assets and gain control of this manufacturing capacity.
And for the record, no matter what Barney Frank cooks up on this, the outgoing Congress should not be rushing to do any bailout of the Big Three until the incoming Obama Administration has the ability to dictate the terms of what is expected of Detroit in order to get any federal help. Obama has already said that any short term and longer term help is contingent upon building the right cars that fit into our energy and environmental future.
Separate from his differences with Mr. Bush, Mr. Obama has signaled to the automakers and the unions that his support for short-term aid now, and long-term assistance once he takes office, is contingent on their willingness to agree to transform their industry to make cleaner, more energy-efficient vehicles.
Yet going after the Big Three to force them to do the right thing is only part of it. We also have to go after the other culprit here, and ram a real energy reform bill down Big Oil’s throats as well so that this unholy and destructive marriage between Detroit and Big Oil stops driving our energy, national security, and industrial policies.