Robert Reich, former Secretary of Labor under the Clinton Administration and supporter of Barack Obama, as reported by Bloomberg writes that any package for the Big 3 Automakers, and their suppliers must follow Chapter 11 Bankruptcy conditions, including concessions on wages and benefits by the U.A.W. The rub comes in that President-elect Obama received $80 million dollars in campaign contributions from unions, and will have to consider this condition as a quid pro quo measure in order to pass the Employees Free Choice Act (EFCA), abolishing the secret ballot, which the unions feel give management and owners greater influence to prevent unionization, for a system of card checks.
Many congressional leaders are recognizing the error of giving a blank check to Wall Street without conditions. Strict conditions as to how these monies are to be used and with a reasonable timetable must be imposed for any investment by the taxpayer in the auto industry. Some, including U.S. Senator Shelby of Alabama, want the auto industry to be treated like any other businesses with enormous losses and file for bankruptcy. All agree that in normal times, this is preferable to government intervening. However, with the economy in such dire straits, the question comes down to whether it can take another major hit with an additional 3 million workers laid-off. Reich believes that following Chapter 11 Bankruptcy guidelines would provide some assurances and accountability to the taxpayer, and would prevent the projected $178 billion dollar negative ripple effect that would happen with the demise of the Big 3 if no intervention by the government occurs.
But As For Me…
It is doubtful that the Lame Duck session of Congress will be able to pass this funding, and projections are that GM will run out of money by the end of the year. At that time, we may see if what the Democrats predict as a major “negative shock” to the economy occurs. The only thing that GM, Ford, and Chrysler have going for the deal lies in the fact that when Chrysler was faced with going under in 1979, the government made a loan that revived it, and the government not only was repaid, but actually made money from its’ aid to Chrysler. The German Finance Minister Peer Steinbrueck, calling them “crisis freeloaders,” is advocating letting the division of Chrysler in Germany face the music and not receive any further government subsidy or aid. This funding issue may wait for the inauguration of President Obama, so that he will own whatever happens, good or bad. You can be sure that any further requests for assistance by the financial institutions and private business will not be given without plenty of strings attached. Sometimes doing nothing is better than doing something in haste and without deliberation.
In the last analysis, the question that both parties must ask themselves is: “How do you want to spend your political capital?”
POULAR POSTS:
- The $750,000 Government’ Employee Pampering Scandal
- FED BAILOUT TOPS $7.4 TRILLION – $54,371.79 PER TAXPAYER
- Chrysler to match ‘cash for clunkers’ incentive
- Stephen Baldwin Files for Bankruptcy
- Obama Administration Details Its $100M in Spending Cuts
- A Different Kind of Stimulus: Uncle Sam Funding Porn?
- Palin blasts bailout expansion before GOP governors
- Jobless Report Is Worse Than Expected; Rate Rises to 9.8% — 17% Rate Including Laid-off Workers Taking Part-time Work or Given Up…
