Michigan Gov. Jennifer Granholm referred to the Senate vote that stymied the auto industry bailout as “un-American.” We’re not certain what calculus Granholm applied to reach this conclusion, but we’re positive that partial nationalization, bailouts and top-down Washington control of private industry are no measure of patriotism.
The auto industry bailout that won’t die found new life this past week when the White House, reversing its objections to the idea, began to consider tapping funds that were never meant for the auto industry.
When Senate negotiations broke down after the United Auto Workers refused to offer salary concessions to its current contract — instead pushing back any negotiations until 2011, when the contract expires — it effectively ended any chance of a Detroit bailout this congressional session.
The union immediately demanded that the Treasury Department release financing from the Troubled Assets Relief Program (TARP) — formerly known as the bank bailout — to “prevent the imminent collapse of the automakers and the devastating consequences that would follow.”
President Bush to the rescue.
Until now, the White House had resisted efforts to redirect money from the estimated $700 billion in financial bailout funds. Bush is about to set a terrible precedent.
The auto bailout has numerous problems, as we’ve noted in these pages before. Any bailout merely will delay the fundamental changes needed to restructure the auto industry, a reality it will have to deal with sooner or later. A few of those changes can be done more easily through bankruptcy.
What does have an “un-American” ring to it is a government-anointed “car czar” who disburses taxpayer funds to industry and relies on Congress to discern the demands of consumers. Congress, on balance, is an institution with a historical problem running its own finances, much less that of a massive private-sector venture.
Moreover, despite the UAW’s obstinacy, Washington has no business playing the role of arbiter in the negotiation of salary, either for those in management or rank-and-file union workers. These are issues better negotiated between the parties involved.
As for TARP, it was created to relieve banks of distressed stocks and mortgages. It’s not a public trough for private enterprises. The auto bailout is a unique issue and it should be treated as such by Washington.
We all remember the frightening rhetoric from politicians of both parties about the imminent collapse of financial institutions if they didn’t approve the first massive bailout immediately. Since then, that money has not been allocated in the manner the American people were promised. We have little idea, in fact, where the TARP funds have been spent.
Now, congressional Democrats and the president want to use this fund for a wholly new purpose.
It is unacceptable.
