Friday, December 12, 2008

About Bail-Outs and Loans and Speaking With Forked Tongues

I don’t know if helping the auto industry is the right thing to do or not. It does appear, however, that the government loan may not go through and, unless Bush acts with money already approved, many thousands of autoworkers will likely be losing their jobs.

Several things about this mess bother me.

GM and Chrysler were asking for a loan of 14 billion dollars, while the Bush Administration gave $150 billion to AIG. That’s ten times what the car companies asked for!

Opposition to the automakers loan comes from Republicans in the Senate. The most vocal of these are Senators Richard Shelby of Alabama (top) and Mitch McConnell of Kentucky (bottom). Note, please, that both of their states are home to huge auto plants run by foreign automakers like Toyota and Volkswagen. To attract those companies, Alabama and Kentucky offered big tax incentives because of the jobs they would provide.

And that begs the question: Why is it OK to give up tax dollars through incentives to create jobs in Alabama and Kentucky, but not OK to use tax dollars for loans that will save jobs in Michigan and Ohio and Indiana and Illinois?

Could it be because the southern autoworkers are not unionized, while those working for GM and Chrysler are members of the United Auto Workers? Well now… there’s a thought!

With unmitigated gall (because they know it to be untrue), Senate Republicans continue to lay much of the blame for the financial problems of GM and Chrysler on the wages being paid to the union workers. In fact, when you combine wages and bonuses, the non-union workers in the South are making slightly more that the union folks working for GM and Chrysler.

It would appear that Shelby, McConnell et al have seen an opportunity to damage or even break the United Auto Workers, and are willing to let many thousands of union families pay the price to do it.
Merry Christmas, y’all.

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