It would be a crime to let the American auto industry fail, and any politicians responsible for such a disaster should be impeached. I’ve heard a lot of moaning and groaning from Republicans who want the car makers to declare bankruptcy, and it is inconceivable to me that a pack of pampered “fat cats” would show such disregard for the consequences of that eventuality. If the auto makers fail, at least three million American jobs will be lost, and that would be just the beginning. The ripple effect would finish off the country’s teetering economy. And the shock waves would not end there; the effects of a disaster of this magnitude would be felt around the world.
Some opponents of the proposed auto industry rescue package say they are “sick of bailouts.” But that’s just plain dishonest. Saving the automobile industry is completely different from the financial bailout in which the Bush gang distributed trillions of dollars to selected banks. That bailout has done no good for the working men and women of America. And it will do no good for anyone but the financial wheeler-dealers involved.
The financial system is an artificial structure. Its only purpose is to provide an environment in which capital can be assembled and distributed to corporations. Now that the American government has shown it can provide capital without the assistance of the financial system, you might ask why it hasn’t been doing this all along. They will say that’s Socialism. And it is. But that barrier was broken when the government bought shares in the banks. Now, we have to determine how our new Socialism will evolve.
It was the financial system that failed the car companies. The companies and the Auto Workers Union had just agreed on “reforms” in which wages and benefits were reduced to match those paid by foreign companies building cars in America. Plants were being retooled and management streamlined to meet the demands of the Twenty-first Century. And that was when the financial system collapsed.
The industry desperately needs cash to make the reforms pay off. This is no time to dig up old grievances and Monday-morning quarterback the industry. Sure, the auto makers have done a lot of dumb things. They have been self-serving and greedy. They fought innovation and killed off the railroads. But that was then and this is now.
The government should lend them the $25 billion they need to stay afloat. It would come with strings, of course. The companies would have to show how the money will be repaid, and the business plan would have to be convincing. And they would have to agree to meet environment-friendly standards. But refusing to lend them the cash they need would be bone-headed and self-destructive.