Detroit gets skewered, Wall Street bankers get easy bailout
December 4th, 2008 at 12:49am Chuck Sweeny
Have you thought about this? When the Wall Steet banks and investment houses were cratering, their leaders went to Washington and Congress authorized $700 billion to bail them out, few questions asked. They were not asked to come in with a plan, they were just showered with money. Some firms were bailed out without Congressional action, and treasury secretary Hank Paulson became, briefly, the most powerful man in America.
There were no stories about how the bankers traveled to Washington. Corporate jets? We don’t know.
But when Detroit’s big 3 automakers came begging for cash and loan guarantees, whoa! Not only were they humiliated for doing a dumb thing — taking those multi - -million dollar jets to the capital city — but they were admonished for not having a more detailed plan for what to do with the $25 billion they wanted. At this date, we still don’t know whether Congress will help them, or tell them to go fishing.
Michael Moore was talking about this on Keith Olberman tonight. He echoed something I’ve long thought — the D.C. crowd cares little or nothing about U.S. manufacturing. They’d prefer to shower their attention and cash on people who say they can make more money out of money.
But folks, that’s how we got into this mess. Manufacturing is the source of our wealth, not banks.
Admittedly, we can’t just give the Big 3 money without demanding they do a much, much better job managing their companies. That said, the U.S. would invite disaster by just allowing the companies to bite the dust. Millions of support jobs depend on the industry, indeed, because like it or not, we have built our modern economy based on the automobile.
the only way we can truly save American manufacturing is to provide universal health care and drive down the so called legacy costs. The reason there are nearly a dozen auto assembly plants in Ontario, Canada is because the companies don’t have to provide health insurance, saving them considerable money on the cost of building a car.
Entry Filed under: bailout
4 Comments Add your own
1. dudessabides | December 4th, 2008 at 5:00 am
“the only way we can truly save American manufacturing is to provide universal health care and drive down the so called legacy costs”. Wow, Mr. Sweeney! It is a tragedy that our economy had to tank for this part of the employer-based healthcare system problem to become obvious. You made another good point about manufacturing being the source of our wealth, not banks. Dudess_abides
2. jerry_thinks | December 4th, 2008 at 7:43 am
This is all true about the banks not supporting the income of America, and showering them with money was not and is not the best idea without a plan. In my opinion NAFTA has been the what has caused the problem. Ross Perot was right. . . we did get hit with the giant sucking sound of jobs leaving the country.
The big three need to trim the fat. They are making WAY to many brands and models of each brand. GM needs to shed Buick and Pontiac. Their hybrids are in name only. In order to get the 30 mph they claim, you best drive like you have an egg under the gas pedal or your going to get 24 miles per gallon, the same cars got 60 years ago. For this they want $30,000?
The Chevrolet Volt not out until 2010 get 40 miles before recharge or switch to gas, and is $40,000! This is a rich man’s toy, This is way congress is asking questions. . . they don’t trust these people, and for good cause. The money they get, IF they get it, will NOT be enough and they’ll be back. Bad investment.
Let them do what other have done, file bankruptcy, reorganize, make their company more efficient. It worked for United Airlines and others, and they are for the better now.
3. Milton Waddams | December 5th, 2008 at 9:48 am
The difference between United Airlines and the Big 3 is this: United doesn’t build anything, they don’t have thousands of suppliers who only make things for the auto industry. I didn’t agree with the bailout for the banks and don’t really agree with a bailout for the auto industry, but the ripple effect of a big 3 bankruptcy would be massive. As I said, I don’t agree with the bailouts, but the Big 3 are MUCH more deserving of one than the financial industry. As Chuck and Dude said, wealth is not created by shuffling paper around and skimming some off the top. It is created by manufacturing and innovation.
4. Milton Waddams | December 5th, 2008 at 9:54 am
The volt actually makes pretty good sense for its intended customer. The majority of people drive less than 40 miles per day. They would be able to run on electricity almost all the time. Incentives could be developed that would encourage businesses to make outlets for charging available to employees, which would allow for recharging at work, effective doubling the range. It has a high initial cost, which is its one downside. It makes much more sense than the people who drive around a $40,000 truck (getting 12 MPG) everyday as their daily driver because they pull a boat twice a year.
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