Auto Bailout Fails – Common Sense Prevails

The bill before the Senate to bail Detroit failed yesterday in a vote of 52 to 35, with 12 “not voting”. Of those 35 Nay’s, 4 Democrats broke ranks and voted with the Conservative Republicans. The 12 who did not vote were a mixed bag of well-known Democrats and Republicans including, Biden (D-DE), Graham (R-SC), Hagel (R-NE), Kennedy (D-MA), Kerry (D-MA), and Sununu (R-NH). (Source: US Senate)

The Bill, supported by Barney Frank, Nancy Pelosi, Harry Reid, President George Bush and President-Elect Barrack Obama, was defeated over two sticking points that, for all intents and purposes, seem reasonable, considering it would be the people paying for several generations for an industry that has consistently failed to become competitive. The stumbling block – Republicans called for pay and benefit cuts slated for the Auto Workers Union in 2009. One has to understand that a machinist belonging to the Detroit Auto Makers Union makes an hourly wages that is disproportionate to others performing the same functions in any other industry in the United States. The average machinist can expect to earn approximately $18 to $22 per hour, while the UAW worker can anticipate an average of $73 per hour (which includes rich benefits and pensions.) Additionally, those that have been laid off, fall under this bail-out umbrella, and would continue to receive an average of $31 per hour. There are, articles aplenty, regarding the “myth” of the $73 UAW worker, referencing sources such as The New York Times and the UAW, which, may not be entirely subjective when the auto-industry is ready to feed off the public trough.

Needless to say, The New York Times is blaming those pesky Republicans for dashing the dreams of Detroit. However, where was the Bay State’s Junior Senator, John F. Kerry, Obama’s biggest pre-election cheerleader, in all of this? Surely his extra vote could have helped out Obama and Reid? Perhaps he could have persuaded those four Democrats who voted “Nay” to go along with Reid and Company. Or perhaps Kerry decided to sit this one out as the bailout was not popular in the Bay State. Most likely, he was absent with better things to do.

All this aside, the idea was simply reprehensible to the American Pubic. Constant bailouts of industry, with an eye towards partial state ownership, rankles conservatives, libertarians and anyone who takes a common sense approach to the ups and downs of business and its exclusion from government. Our economy has been, as far as anyone can tell, capitalist – which seems to have worked out fairly well to date. It appeared this concept came into contempt beginning in 2006 when the Democrats gained control of the House and Senate, and now the idea of Government Owned everything runs the Hill. That said, the worst case: Detroit will fall into bankruptcy, have to retool, perhaps along the lines of Toyota,Honda and Nissan USA, whose employees earn on average $48.00 per hour, and who, are economically sound. Recovery may be slow, but it is sure, and it is also tax-free.