Robert Reich talks sense on the car bailout:
GM just announced it was laying of 21,000 more of its workers, as a means of assurring the Treasury Department the company is worthy of more bailout money. A Treasury official was quoted as saying approvingly that the goal is a “slimmed-down” GM.
What? Having General Motors or Chrysler cut tens of thousands of jobs in order to be eligible for a government bailout reminds me of “saving” Vietnam by bombing it to smithereens. Aren’t we giving these companies billions of taxpayer dollars to save jobs? If not, we’re just transferring money from taxpayers to GM and Chrysler bondholders and shareholders.
I agree with those who say the United States needs an auto industry. But there’s no point spending tens of billions of taxpayer dollars for an auto industry that’s a tiny fragment of what it was before. We could achieve that objective by doing nothing.
Well, that’s right. But the object here is a grand experiment in union-statism, or whatever you want to call the alliance between the Obama administration and the new management at Chrysler, and likely GM, — which is the UAW. (Gives “union bosses” a whole new meaning.)
This is likely to be extremely unpopular with the voters who don’t like bailouts one bit. But we’ll also see the grand experiment plays out before our eyes. A company with fewer employees run for and by unions with a huge taxpayer subsidy. — wow! If you didn’t know better you’d think Big Labor’s political influence trumps all other considerations in this administration.