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Friday, December 12, 2008

My dilemma with the auto bailout

Ok, so I haven't been happy with Democrats, Republicans, or really bloggers on the issue of the auto bailout and I agree with all of them on some of their points. Let me elaborate.

1. I tend to agree with Democrats and bloggers that we need to do something. Bankruptcy may be a market solution that would serve the corporation right but it would be brutal to the work forces of the Detroit area (not like it hasn't screwed them already)

2. I agree with Republicans that Democrats are pushing too fast with a no, or very few, strings attached BS bailout that doesn't adequately change their business model. Unfortunately Republicans also think the only problem is union salaries. The two major problems are (in order) the Big 3's business plan and strategy, Executive pay.

3. I agree with the bloggers that the workers are the most important thing to protect in the situation but I disagree that we need to save the industry at all costs (essentially in its current form) to do that. That's exactly how those corporate snakes want you to think. They keep enough Americans employed so that if something like this happens they scream "but you don't want to hurt the autoworkers do you? so you need to bail us out"

Here are my thoughts on the subject. Centralizing an industry may seem like a good idea at first but it's pretty much the worst idea ever because if that industry needs to move or go away because of competition or technological advances it will destroy an area of the country (read: Michigan). If this industry were spread out better across the country any one area wouldn't be hit as hard and could absorb the shock. So any bailout that doesn't help move A LOT of the American auto industry away from Detroit is a terrible idea.

And as far as unions go, I love unions, I wish we had more of them and I wish they were stronger and more intelligently run but I don't think that something like the UAW should be fighting to make sure that the auto industry always exists in Detroit and always pays high wages. I think their goal should be that AS LONG AS the auto industry exists it should be paying its workers good wages with good benefits (hell, that should be true for every job and every american). But industries have to move and progress. We lost a lot of textile jobs over our history when we became so developed it didn't make sense for us to be producing them on a large scale. We employ less workers in many factories because we can automate the jobs and make them more efficient and use our human resources in other areas. Here's what the auto industry bailout (and larger economic policies) should be based on:
1. Protect the workers (not their current jobs): Social protections, safety nets, education, job retraining, relocation assistance should all be used (in this situation and our society in general) but flat out protectionism of their jobs is BS
2. Make the executives of the Big 3 suffer as much as possible. Offer them no protection, take their money, sue them for negligence to get more, take their positions, and even execute them if you need to (this applies to financial executives too). They created this problem and they should pay for it
3. Encourage the diversification of ALL regions. One industry towns and regions are dangerous. Even if you make Detroits Big 3 manufacture Hyrbrids, Plug in Hybrids, and Electric (which we should) they should not be so centralized.

I'll rant more on this later but I just had to get that off my chest.

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