Monday, December 08, 2008

Lobbying Against Auto Bailout?

Sen. Bob Corker, along with outgoing Congressman David Davis and incoming Congressman Phil Roe, are not happy with a proposal to "bailout" the nation's automakers.

Maybe they have good reason -- the question on my mind is how many companies in the state of non-U.S. auto and auto parts manufacturers are lobbying these good folks from Tennessee to reject such a program?

Both Rep. Davis and Rep. Roe offer views based more on anecdotes than economic policy:

Rep. Davis: "
I do think we need to do something to help the automobile industry, but I think they need to help themselves first. One of the things they could do is move those jobs to the South where it is more labor- friendly and a good work ethic here in Tennessee and across the South. They could build a car cheaper, and it would put them in a better footing in the world market."

Rep. Roe: "I’m about stimulated out,” said Roe, Johnson City’s mayor. “Sooner or later you’ve got to swallow the poison pill and get off this credit card ride we’re on and start paying our bills. I look at my grandchildren, and I’m thinking ‘What we’re doing is mortgaging their future so we can maintain the standard of living we have right now.’ “I understand we have car manufacturing and car dealers here. I’m not insensitive to that, but sooner or later you’ve got to build a car that somebody wants to sell at a price they’ll buy it for."

Meanwhile, Senator Corker says any loans must be intensely detailed and moderated:

These are the same types of conditions a bankruptcy judge might require to ensure that these companies become viable and sustainable into the future, and if they will agree to these terms then we have something to talk about. The process I have suggested would allow them to avoid the problems and stigma that accompany a formal bankruptcy, while forcing them to do the things they need to do to be successful companies."

All these comments seem aimed at protecting foreign car-makers in Tennessee than they are concern for the national economy as a whole. What might be best for them is not likely to be the same as what is best for the Big Three car-makers.

Adding to the current confusion over what to do -- the constantly repeated myth of how much workers are paid in the U.S. to make cars. It is not $70 an hour, it's more like $24 per hour.

There is an enormous balancing act for economic growth in the U.S. and on the global scale. I can't see a robust response which eyes the future and the present coming from Washington. It's more like watching those old stage acts where a dozen plates are spinning away on the tops of little poles in defiance of the laws of gravity. Sooner or later, the act has to end. Does it end with a crash or a flourish of accomplishment?

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