It looks like Congress is likely to pass a bail out for the Detroit 3. I'm not sure that is what we should do, but I also don't feel I have enough economic training to make a truly informed decision. I doubt many typical Americans do. What I do believe is that we should not repeat our mistake with the banking industry. We cannot just hand the auto makers a free check to do with what they will. We should not have done that with the banks. We gave them the money with the intention that they would release lending, but that has not happened. Bastards, one and all. If we are going to pass a Detroit 3 bail out then we must:
- Make them repay it.
- Require them to invest heavily in energy-efficient alternatives.
- Kill outrageous CEO pay stubs and bonuses.
- Require a real business model that will compete globally. (related to #2)
- Have oversight and ability to retract money for noncompliance.
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Minimize union involvement. Non-unionized auto plants are flourishing, not asking for handouts, the workers do not go on strike with grievances - they work in states outside the snares of union dominance and apparently they are treated well for they continue to work there. The unionized workers have salaries $130,000 per annum for a line worker whether he is working or retired that of course includes benefits. Since he can not be fired he works, not at the job description, but instead in a cozy room where he can watch tv, play video games etc. and that is what we are to bail out. Sheeesh. And I have to buy their goods, only when their is no other choice. As far as their medical benefits they should be nationalized, now there is an idea let the unions pay for all our medical expenses. They seem to have the ability to extract money, even from the government AKA our taxes we pay especially if they receive the bailouts. Argentina is going to bail out the auto industry in a novel way. First they are seizing all retirement funds, 401k equivalent et al to place in the Social Security system to be shared by all. Then they are requiring the auto industry to sell their 2 most basic autos at cost only, what an incentive to produce, and the government will fund this bailout with - guess what? Newly acquired money from the Social Security System. That is government for you.
OP CIT
http://www.reuters.com/article/newsOne/idUSN0632016920081206
Everything the Auto Makers need can be accomplished by giving them nothing.
1. They will repay $0 very easily.
2. If investing in energy efficient alternatives is the right strategy, then the winning company will have done so.
3. The CEO's will lose their jobs if the company goes bankrupt.
4. Competition is what's already driving them out of business.
5. No oversight needed because they'll be gone.
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