Ten Reasons Why the Auto Bailout Is a Bad Idea

Click here.  The following is, in my opinion, the Newsmax piece's money shots:

1. A bailout would provide money only for short-term survival. It wouldn't alter carmakers' flawed business models. GM is running through cash at the rate of $2 billion a month. So $10 billion from the government would give it only five months’ breathing room. Can they turn over their business practices in that period? Please. The temptation would be simply to come back to taxpayers for more.

2. A government handout would allow the Big Three to avoid necessary cost cutting. Because of a strong union, the average GM employee received $70 an hour in combined pay and benefits last year. And it’s not just line workers who are making too much. GM chief executive Richard Wagoner garnered about $24 million a year in 2006 and 2007, while leading his company toward oblivion.

3. Bankruptcy isn’t all bad. It doesn’t mean liquidation. It means taking the painful steps the companies have been unwilling to contemplate to date. The real losers in such a deal are carmakers, equity shareholders and creditors [annnnnd Big Labor]. Bankruptcy would give the automakers the chance to throw out existing employee contracts with their onerous health and pension systems. The unions would be forced to temper their demands if they want the car companies to survive....

However, if the taxpayers are shafted with an endless series of bailouts, inserting the government further and further into ownership of the auto industry like they've already functionally nationalized the financial sector, Big Labor would not be forced into any retrenchment whatsoever.  And they will own Congress and the Brown House lock, stock, and French tickler.  Which is why though this bailout has died for now, it is inevitable next year.

Compare that to simply letting the "creative destruction" process of the free market work its omniscient "magic":

6. Big Three bankruptcies wouldn’t mean the end of auto industry in the United States. Foreign companies, which already have plants here, could pick up the slack and open new factories. Some 78,000 Americans already work for foreign carmakers, a number likely to rise in the wake of any U.S. automaker demise. The depressed South could benefit particularly from increased production of foreign auto companies.

7. Other industries have survived bankruptcy just fine. Most of the major airlines have spent time in bankruptcy, including United, Continental, Delta, Northwest, and US Airways. Their predicament looked particularly dire after 9/11. But the major carriers made it through. And to the extent that they suffered, low-fare competitors such as Southwest and JetBlue picked up the slack, often offering superior service in addition to cheaper prices.

That, gentlebeings, is the REAL "Yes, We Can!"  Tragic it is that sixty-eight million voters turned OUR back on it to follow a socialist charlatan instead.  God willing, they will be the ones who pay most of the economic price for that latest exercise of colossal foolishness.