I think it would be a terrible mistake to simply write a check to the auto industry without demanding major, major restructuring of its labor contracts. Without that the money will simply go down a rat hole and the automakers will just be back again in a year or two asking for more money.Mark Perry, who is somewhere to the right of
Obama has a strong hand to play here and I hope he uses his leverage. With bankruptcy as the only alternative to federal aid, he can drive a very hard bargain with the auto workers. If he caves and just writes a blank check, everyone will know he can be rolled and he will pay a heavy political price for it. If Obama shows toughness on this issue, I think it will pay enormous dividends for him down the road.
[Italics mine-Buce]
Update: And in case you need any reminders of why we should not mourn for Detroit, go here, and H/T Perry again.
1 comment:
The question we should be asking is not why autoworkers are making $70-something an hour (not a great fortune) but why CEOs, CFOs, bankers and others are drawing $2,000 an hour and in some cases much more, thus drawing off funds that could be used to
•staunch losses
•pay stockholders for their investments
•Fund research and development that would make the U.S, owned auto industry more competitived
One change should be made in worker benefits: Their medical insurance should be federalized, as should the medical benefits of all Americans. This would relieve business of some of the huge burden of medical insurance and redistribute healthcare costs more equitably.
Crankily yours,
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