#63: Bailout for Automotive Industry?


Should Congress Bail Out The Auto Industry?



I must admit, this proposed automotive bailout sounds like another big government handout that rewards bad behavior and fiscal irresponsibility. My husband and I (and many other citizens) work hard for our money, and we spend what we have responsibly. Does it seem fair that our hard-earned tax money will go to greedy capitalists who couldn't keep their spending in check?

Given the current state of the economy, I see why a bailout might be necessary, but I don't have to like it, and I would definitely like to see some MAJOR restrictions placed on how that money should be spent by the industry. These CEOs can whine all they want about government non-intervention (on how the money is to be spent), but they have demonstrated that pure capitalism does not work, that self interest will almost always trump the greater good (which is also why pure communism/socialism does not work either).

President-elect Obama and the Congress had better get this one right; otherwise, in two years, we'll see a political massacre of Democrats in both the Senate and House, and in four years a Republican President-elect. So on January 21, 2009, President Obama had better hit the ground running.

As an ordinary citizen, this is what I would like to see in an automotive industry bailout:

--That this is a LOAN, not another bloated government giveaway.

--A specified repayment plan, with prevailing interest rates; if payments don't arrive on time, then the government should have the power to begin seizing assets.

--Mass firing of the CEOs who took huge incentives and threw big parties at their stockholders' expense and replaced by temporary bean counters whose only job is to lead the company out of its financial morass. These CEOs would be paid well and fairly, but absolutely no bonuses and no golden parachutes should they be fired for a job not done well.

--The bailout plan should have absolutely no pork attached--this should be a clean bill with no special interests embedded. The American people sent a very special message to the powers-that-be by cleaning out the Republican cancer from the Presidency and Congress:


And the voters will not hesitate to send the same message to Democrats. Seriously. Your mandate is predicated on the fact that you're not George W. Bush.

Part of the bailout should be designated for energy innovation and alternative fuels research. For example, why hasn't the industry been working on fuel cell technology?

--The bailout should come with strict government oversight and rules and regulations; every penny needs to documented and accounted for. Government CPAs should be placed on site and be capable of calling for an audit at any time.

--No frills allowed, no lavish parties, no fancy cars and clothes.

--Union workers will also have to tighten their belts (sorry, but you shouldn't get a free pass here). You will be fairly paid and have good health care coverage, but you may have to forgo yearly raises and other perks, at least until this country is out of the recession. But you will still have jobs; the alternative is the unemployment line. We're all going to make sacrifices, I'm afraid.

--If the bailout appears to be failing, the government should not hesitate to step in and take over; after all, it will be OUR tax money being squandered.

Aside from the proposed bailout, the Obama administration ought to consider reinstating the "natural monopolies": utilities, mass transit (train, airline, bus, roads), and the postal service. These areas should have never been handed over to the private sector; they are too huge and too necessary to the common good to be left in the hands of profiteers who see only dollar signs. At the very least, these companies should be heavily regulated.

The Republicans got into this mess, but it will be up to the Democratic majority to get us out.

And if the Dems don't succeed, they will be blamed.

It's just that simple.