A Tale of Two Bailouts
The other night I watched documentarian Michael Moore on MSNBC’s “Countdown with Keith Olbermann” discuss the potential government bailout of the Big 3 auto makers. I agree with Moore’s opposition to the bailout but I got taken in by another comment of his that I then had to back up and reevaluate. Moore touched on the notion that the auto bailout involves some sort of class warfare. He made similar remarks in the Huffington Post:
Two weeks ago, the CEOs of the Big 3 were tarred and feathered before a Congressional committee who sneered at them in a way far different than when the heads of the financial industry showed up two months earlier. At that time, the politicians tripped over each other in their swoon for Wall Street and its Ponzi schemers who had concocted Byzantine ways to bet other people’s money on unregulated credit default swaps, known in the common vernacular as unicorns and fairies.
But the Detroit boys were from the Midwest, the Rust (yuk!) Belt, where they made real things that consumers needed and could touch and buy, and that continually recycled money into the economy (shocking!), produced unions that created the middle class, and fixed my teeth for free when I was ten.
The other way it has been put is if you shower before you go to work you get a bailout. If you shower when you get home from work, you don’t.
I say baloney! The two bailout scenarios are in one way fundamentally different and in one way fundamentally identical in such a way as to make the class warfare cries absurd. First the TARP (Troubled Assets Relief Program) designed to bailout the financials was implemented to stop a cross-industry international disaster. The goal was to prevent a complete financial meltdown which would effect virtually every citizen. On the other hand, the bailout of the “auto industry” is an attempt to rescue three poorly run companies who deserve to suffer the same death as every unsuccessful company in a capitalist society. Will the failure of these companies cause ripples outside the auto industry? Of course, but the ripples will not go out nearly as far as the tsunami created by a complete financial meltdown. This fundamental difference means the solution to the two problems should not be identical. It’s not class warfare, it’s capitalism.
Second, there is a fundamental similarity to the two bailouts that makes the class warfare complaint a non-starter. There is this misconception that while the TARP bailed out rich fat-cats, the auto bailout gives relief to the blue collar working man. Sorry folks, the auto bailout will give relief to the white collar, multi-million dollar salaried executives who ran their companies into the ditch. Guess what each company plans to do after they get the government money? They plan to layoff thousands of workers. This bailout will save the CEO’s asses, none of whom have volunteered to resign if their companies get the money. The blue collar, salt-of-the-earth, shower-after-work guys are still going to get royally screwed.
Interestingly, for all his populist talk, I think Moore ultimately understands this. He knows the problem with the Big 3 is corporate mismanagement and that, not class-ism is the reason the government should not give them a red cent.
I Got Punk’d — NOT
Dead set on not being played a fool like Sarah Palin, Florida Representative Ileana Ros-Lehtinen hung up on President-elect Barack Obama not once but twice.
Obama called her cell phone to congratulate her on her recent election win despite the fact that she is a Republican who supported John McCain. Ros-Lehtinen was convinced that in no political reality that she had ever experienced could such a thing happen. So she assumed it was a prank call from a local radio disc jockey, much like the fake-Sarkozy call that Sarah Palin fell for over a month ago. As Obama introduced himself, Ileana interrupted him, told him she wasn’t going to fall for the prank and then hung up on him.
Obama’s choice for Chief of Staff, Rahm Emanuel then called her. With Emanuel and Obama both on the line, Ileana was not buying it and she hung up again. Finally, her colleague Howard Berman called her to clear up the matter and she made him answer a question that only he could answer before she even believed he was legit. This lady is hard core! Once Berman convinced her that she had indeed been called by Obama, she asked that the President-elect call her one more time. They had a good laugh and no permanent harm was done. Reportedly, Ros-Lehtinen told Obama,
“You are either very gracious to reach out in such a bipartisan manner or had run out of folks to call if you are truly calling me and Saturday Night Live could use a good Obama impersonator like you,”
Apparently, Obama’s truly bipartisan style was change that the Congresswoman simply could not believe in!