I been thinking a lot about the Big3 Bailout, as if you could avoid it. At first your instinct is that we must save these jobs. Justifiably and with sympathy, we think about the life altering trauma and uncertain futures that too many families will be facing. Unemployed and Uninsured puts you on the door step of the Great American Nightmare.
Then I think about businesses, not only the Big3 but all those ripples of economic activity, from the suppliers all the way down to that gay bar where some of the factory worker get together on Friday night. slapping each other on the back saying "hey, your just in time for my inventory!" Sorry about that. I just can't resist a good supply chain joke.
In the case of the Big3. There is no player in this game that doesn't share the blame. The companies for generations of short sighted leadership. The government, more specifically the Bush tax cuts accelerating the write off for capital investments for businesses. Which can be a good idea but in this case it became, for small business owners, The Great Hummer Tax Deduction. The Joe the Plumbers of the world would buy a Hummer or some other ultra huge SUV "for the business" and use it as a tax deduction. When it comes to taxes, nothing gets you off like a Hummer.
Blame is also is shared by the Unions. Now I have always been a fan of unions. I think they are for the most part good for the worker. They give a unified voice to a company's work force and offer a more equal footing in the relationship between labor and management.
In the case of the UAW when I heard about some of the extremes of their contracts like pay for no work for like ever or at least a couple years. My first instinct is to say "you go girls!". But then the realist kicks in and I think this paradigm is not sustainable. The American Auto industry can not continue at the competitive disadvantages they now suffers and it must change.
One quick diversion here because this brings up something that I will never understand. You would thing that businesses, big and small, would be all for a universal health care system. Imagine the boom for companies relieved of the burden of providing health care.
Giving the Big3 $25 billion at this point would be like throwing it into a burning building hoping it will put out the flames. At best it will just delay the inevitable. Sooner or later one, two or all of the Big3 will have to go into bankruptcy protection and reorganize their business models.
Maybe from the governments point of view, rather then trying to prevent the storm we should be preparing for the aftermath and recovery.
So here's what I think we should do. The Auto Industry already has $25 billion allocated to retool for more efficient vehicles. I don't see them using that money anytime soon especially while they're reorganizing. So we take that $25 billion add to it the $25 billion the automakers wanted to hold them over. Now put that money into a fund for displaces autoworkers. Use that money for tuition assistance or worker retraining. Use some to buy out worker nearing retirement and offer them early Medicare, offer low interest loans to prevent foreclosure. Do what is necessary to mitigate the trauma and pain to the workers, the families and the communities who by no fault of their own are facing a financial Katrina
