GOP Must Say No To A Detroit Bailout

I just wanted to say that the Scottish Right blog is officially and adamantly opposed to any bailout of Detroit automakers that doesn't involve a managed bankruptcy.  This is a gut-check vote for Republican legislators who supposedly believe in free markets.  It would be beyond disappointing for GOP "leaders" to cave into the Democrats and UAW on such a significant issue. Furthermore, any GOP votes in support of a multi-billion dollar loan to "buy time" should be viewed as nothing other than an inexcusable lack of principle.

Now there's bailout money for transit agencies in the House version of the bill?

Democratic Sen. Max Baucus of Montana announced he was against the measure because of a provision to bail out transit agencies. The bus and rail systems could be on the hook for billions of dollars in payments because exotic deals they entered into with investors — which have since been declared unlawful tax shelters — have gone sour.

This is a typical government spending orgy and an outrage!  Good to see that the Senate Republicans are holding firm...for now anyway.

Here's an even bigger outrage:

At the White House, Deputy Chief of Staff Joel Kaplan told reporters at a late-morning briefing that the administration had yet to read the fine print of its "conceptual agreement" with congressional Democrats.

However, he indicated clear support, saying Bush would personally lobby Republicans.

Nice attention to detail.  Oh well, they were going to support it anyway!

A "Managed Bankruptcy" Fits The Bill

A President-elect Romney would sound very good right now.  

Governor Romney is exactly right on how the federal government should approach the U.S. auto industry.  The opportunity for what is essentially a "do over" on labor and personnel costs is key and should not be passed over.  From the op-ed:

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.

That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.

Any large-scale bailout of the Big Three would be nothing more than a sop to the union at a very great expense to the American taxpayer.  Governor Romney's prescription would make the American auto industry competitive again -- a state of affairs that would truly address the long-term interests of both American workers and consumers.