Good God, when will the corporate welfare to automakers end?
Posted by sanityinjection on October 28, 2008
Last month I blogged about the $25 billion in loans that Congress handed to domestic automakers. I criticized this bailout as corporate welfare disguised as a jobs provision, and watched helplessly as the Democrats in control of Congress – the very same people who usually complain about corporate welfare – shepherded it into law, without much opposition from the GOP either.
Now it appears that $25 billion is not enough. GM and Chrysler are asking the feds for an additional $10 billion to help facilitate a proposed merger between the two auto giants. Part of that would include the government paying off $3 billion in pension obligations owed by the companies to their retirees. Are you kidding me?
Everybody knows that mergers, while they may be necessary in order to keep companies afloat, always mean job losses. The people who would benefit from this merger are the companies’ investors, including their CEOs, as well as all the companies that do business with the automakers. But why should the federal government pay to keep them fat and happy? Here’s a thought: What if the automakers actually had to live with the consequences of their failures? Maybe they would be forced to make changes that would allow them to become competitive again, instead of being sheltered and coddled by the government.
Let me be very clear: I am not against a GM-Chrysler merger. I am against having it paid for by the taxpayers while the CEOs ride off into the sunset with preferred stock options and golden parachutes and workers lose their jobs. Have we learned nothing from the behavior of the execs at AIG? How many more times will the taxpayers be robbed to reward incompetence?
The worst part of all is the significant possibility this will sneak through without sufficient media attention, just like the last one did. Then later when the whole thing fails and we, the taxpayers, are on the hook for it, the new Congress and Administration will blame it all on Bush and the previous Congress.
Aren’t we tired of this?