This is the stupidity that government intervention in markets engenders: Cerberus Capital Management LP, which owns Chrysler, is refusing to put more money into its failing company because competitors Ford and GM are not taking similar measures to save their rotting empires. This is an absurdity, and our tax dollars should have no part of it. Here's a snippet from CBS News:
Congress urged Cerberus to infuse Chrysler with capital earlier this month, but the company rejected the plea, noting that Ford and GM were not being asked to inject more capital into their flailing operations, the Journal reported.
Here's a simple question from a simple man: If the Big Three's own investors are refusing to put more money into their operations, why should the government contemplate putting taxpayer money into it?http://www.cbsnews.com/stories/2008/12/18/business/main4675171.shtml?tag=topStory;topStoryHeadline
Would you be optimistic if someone who had burned down their house playing with matches offered to light your furnace for you?
General Motors Corp. Chairman and CEO Rick Wagoner emerged Thursday from a six-hour hearing before the Senate Banking Committee optimistic that a deal can be reached in Congress to help his company survive a critical cash shortage.
Ever heard the phrase "brilliant minds think alike"? Well, so do dumb minds:
Wagoner said many of the questions and suggestions from committee members were compatible with the viability plan GM submitted to Congress on Tuesday in an effort to obtain up to $18 billion in federal loans.
GM and congress agree on a plan? It's doomed.
In the liberal failed state of Michigan, US Automakers and the UAW have created a monstrosity that is collapsing about them, and here comes congress with broom handles and plaster, trying to keep the creaking eyesore from caving in on us all.
So the inept Washington DC pols who brought us the Fannie Mae and Freddie Mac debacle that tipped our economy over now want to show Detroit automakers the path to destruction.
I think I saw this in a Three Stooges movies once.
Here's the Pelosi solution: "Take taxpayer money, build electric cars nobody will buy, cut executive pay, and ignore the union giveaways that have destroyed you." That's their plan. But what do you expect from the crowd that tells us there's nothing wrong with Medicare and Social Security?
Thankfully, Minority Leader Boehner is taking a hard line. No more double eye-pokes to the taxpayer. No more Congressionally-administered citizen slaps.
Somewhere, somehow, somebody in this great country must be allowed to fail and pay the piper for the stupid decisions they have made. Ford, GM and Chrysler need to file for bankruptcy and dismantle the financially impossible workers paradise they've created. Let the unions howl; they helped create this financial fantasy land.
This can be done in a controlled manner that keeps the factories operating and people working. They need to restructure themselves so they can finally become competitive in the new millennium. Anything less delays the inevitable and wastes taxpayer money.
Anyone who seriously thinks government intervention will help this situation doesn't just need his head examined; he deserves to have his head knuckled by Moe.
So the Big Three are asking for a government handout... You should write your representatives and ask them this question:
Why are the Big Three going broke and asking for taxpayer money while Toyota USA is expanding?
Ford, GM and Chrysler have become as sclerotic as the liberal states that host them. Like the failed state of Michigan, the Big Three promised goodies to the masses and now they have the gall to ask the American taxpayer to fund their generosity. Note to nanny-state liberals (in government and on corporate boards): It's not generosity when you do it with other people's money!
If you want to get mad, go read this WSJ article about how GM pays people to not work. Speaker Pelosi is worried about excessive executive pay when she should be focusing on excessive executive stupidity.
So why isn't Toyota in trouble? Pro-union folks will tell you it's because down south they are able to exploit their workers. Well, maybe Detroit didn't exploit its workers, but it's now extorting money from the entire country as a reward.
Despite what Democrats tell us, our nation does not have one uniform economic policy. Each state and locality employs distinct taxation, employment and business laws that affect employment rates and wages. We can study these various economies to learn what works and what doesn't. People in Illinois, Ohio and Michigan can tell you that things ain't workin' there. Is it President Bush's fault, or is it the fault of corruption, high taxation, and business unfriendly state governments?
Professor Phil Gramm points the finger at dysfunctional state governments:
Business conditions were better in the successful states than in the lagging ones. Capital and labor gravitated to where the burdens were smaller and the opportunities greater.
No one should let Michigan politicians blame their problems solely on the decline of the U.S. auto industry.
Yes, Michigan lost 83,000 auto manufacturing jobs during the past decade and a half, but more than 91,000 new auto manufacturing jobs sprung up in Alabama, Tennessee, Kentucky, Georgia, North Carolina, South Carolina, Virginia and Texas.
The facts show that soak the rich policies, over-regulation, and yes, overreaching unions, destroy jobs. States like Ohio and Michigan have only their failed liberal policies to blame. And the same can be said for the welfare queens who run the Big Three: They overpromised and undersold on pensions and benefits. You can pile the goodies sky high, but somebody has to pay the bill. Toyota knows this, as does Texas, Tennessee, and Florida.
Liberal Democrats and the press (but I repeat myself) will be trying to convince you otherwise. Arm yourself against their economic nonsense by going here and reading the entire article on state economies. I also recommend you read everything written by the erudite and highly entertaining economics professor Walter E. Williams. Here is a quote from his web site:
"We hang the petty thieves and appoint the great ones to public office."
-- Aesop
Walter E. Williams home page:
http://www.gmu.edu/departments/economics/wew/
Gramm Article on State Economies
http://online.wsj.com/article/SB122126282034130461.html?mod=opinion_main_commentaries
