Thick Strings for Auto Bailout?
The Big Three CEOs are back on Capitol Hill, begging for money. My question is this: since a loan is inevitable (this second appearance before Congress wouldn’t be happening if a loan weren’t forthcoming—its purpose is just to get the American people on board… <cough>propaganda<cough>), should we demand the industry cut emissions, double fuel mileage, make vehicles safer, etc, or just treat it like any other loan—set the interest and payment terms, and let it go?
This time they left their private jets at home, but it’s otherwise the same story—if we don’t get a loan, we’ll fail—if we fail, America fails. Apart from the foolishness of setting the precedent that certain industries can’t be allowed to fail (and thus removing much of their incentive to perform), they’re probably right—a dead auto industry would rock our already beleaguered economy. The labor side of the equation has been out in force too, promising to cut worker’s benefits to make the industry more viable, and maybe a loan more likely. A loan is going to happen, good idea or not, but since this is such a huge favor at our collective risk, shouldn’t we demand some collective benefits?
For what it’s worth, I say yes. Since we’re not even pretending to run a free market anymore, if we’re going to selectively help industries, let’s capitalize on the opportunity and achieve some universally recognized good. Everybody wants greenhouse emissions reduced (though some ostriches deny there’s a problem), everybody wants cars with better fuel efficiency (except OPEC, the oil companies, and their minions), and everybody wants safer vehicles. Here’s our opportunity to achieve all three, and with American companies. Goodness knows Detroit isn’t going to do it on their own!
While we’re at it, how about limiting the salaries of CEOs and top management? It’s typically argued that their exorbanant compensation packages are necessary to recruit and retain the best talent. But given the incompetence of a group who has continued to produce inefficient vehicles, despite intimate knowledge of petroleum’s looming death (don’t let these temporary low prices fool you), the CEO salary market seems wildly and artificially inflated.
And how about leaving those auto workers’ benefits alone too? Or at least building in some sort of guarantee that, once the economy’s up and running again, any temporarily forfeited health insurance or layoff payments are returned in full? Rather than letting the fat cats scrape those millions off the top, let’s see to it that the backbone of the auto industry is taken care of first.
So that’s my take. If the loan goes through, lots of strings—lots of thick strings—should be tied to that money. What do you think?