A bunch of reasons NOT to support the Big Three bailout

By Jennifer J. Foster

Published: November 22, 2008

After my column  about the Big Three bailout appeared in the Opelika-Auburn News this morning, I got e-mails from three readers of the print edition.

One reader:

Your Saturday (11/22/08) article on the “Big Three” bailout was dead on.  Good job.

Another reader:

Thank you for that great column today.

The other e-mail was a link to the New York Times’ editorial in support of the bailout.

Click here to read the editorial.

Editorials are meant to influence public opinion. Graded on how influential this editorial is on swaying public opinion in favor of the bailout, I’d have to give it a big fat F.

If I wasn’t against the bailout before I read the Times’ editorial, I sure would be when I got done reading it.

As I told my reader, even if I agreed with the premise of the editorial, the reasoning on which it is based would still be some of the worst I’ve ever heard.

Let’s take it apart:

Congress has given Detroit’s flailing automakers less than two weeks to come up with a restructuring plan that would justify giving them tens of billions of taxpayer dollars and ensure that they have a reasonable path back to profitability. We hope it is a good plan, because the lame-duck Congress does not have a choice.

The Times argues that Congress should fork over the money, regardless of whether there is even a reasonable plan for spending it. With an attitude like that, perhaps the Times’ editorial writer is planning his own run for Congress. And why not? He’s already comfortable giving away other people’s money.

Michigan’s three car manufacturers have said that they would go bankrupt this year without an infusion of taxpayers’ money. Failing to provide it would be a truly irresponsible act that could obliterate one or more companies, potentially causing other bankruptcies and costing many hundreds of thousands of jobs.

No one argues this. But as I said in the column this morning, so would – so ARE – the slow bleeds and failures of other companies causing “other bankruptcies and costing many hundreds of thousands of jobs.” Journalism, construction and real estate are just three examples of industries that are hemorrhaging jobs.

Unpalatable as it seems to underwrite the proven record of failure of Detroit’s automakers –

Hold it right there. “Underwrite the proven record of failure”? Was the editorial writer somehow impaired when he wrote this?

Underwriting a proven record of failure isn’t just “unpalatable.“ It’s ludicrous. In fact, it’s so ludicrous that only the federal government would consider doing it.

– Congress must provide sufficient money to shore them up until the Obama administration takes office. Then, the new president and new Congress can decide how to manage either a rescue package with tight strings attached or a bankruptcy process that ensures the fallen companies have a reasonable shot at picking up the pieces.

So the Times advocates bailing out the Big Three if even only for two or three months, and bankruptcy – and all the things they are saying would be disastrous now – might still happen anyway? So basically the Times is advocating pouring $25 billion of taxpayers’ money down a hole simply to delay what they themselves admit is likely the inevitable.

Hello, McFly?? Is anybody home?

Burning $25 billion taxpayer dollars? How is that in any way defensible?

I reiterate that the question of the Big Three bailout is a philosophical quandary, not a practical one. If Congress bails out the Big Three, then there is precedent for Congress to bail out a dozen or more other industries. Is that the direction we want to go as a country?

Maybe some people do. Maybe a lot of people do. I don’t.

But regardless of what your personal feelings are on the bailout, my point in the column was that if we go in that direction, we can’t call ourselves capitalists anymore.

Finally, I appreciated all the e-mails. I appreciate all interactions with readers, regardless of what they have to say about my work. It’s just nice to know people are reading it.