Bailout or Handout? Depends on Point of View

Maybe it’s because I live in the “blue” state of New Jersey, but the unscientific impression I get from what I’m reading locally and online, is there’s more public sentiment in favor of the U.S. auto industry bailout as a synonym for saving jobs and avoiding a depression, than there is in favor of letting the car companies go broke.

Both sides of that argument cite the earlier, $700 billion bailout of the financial-services industry. Those in favor of the automotive bailout say, “If we gave a much bigger amount to the banks, who goofed up worse than the car companies, we should be able to give a much smaller amount to the car companies. At least they actually produce something.”

On the other hand, Senate Republicans who killed the automotive bailout last week as it was then proposed, pointed to the hasty bank bailout as a reason not to make the same mistake with the auto industry.

Predictably,  The Wall Street Journal editorially pinned a medal to the chests of Sen. Mitch McConnell, R-Ky. and Sen. Bob Corker, R-Tenn., because they barred the bailout in the Senate.

Again, both sides tend to cite the same factors, from opposite viewpoints. Opponents of the bailout claim it was what they see as the featherbedding UAW that killed the deal. Supporters say the Republicans used the bailout debate as an opportunity to stick it to organized labor.

One good thing that’s come out of this discussion, in my opinion, is that there’s a newfound appreciation that newly hired auto workers are not earning much more than non-union workers. I heard Rush Limbaugh say something to that effect on the radio on Friday. He went on to say a lot of other things I disagreed with, but he did have that right. It’s not so much the active UAW workers that are expensive, it’s the fact that there are so many UAW retirees for every one active worker.

Interestingly, both sides of the debate seem to agree that the bank bailout was a mistake. It’s yet to be seen how that plays out politically.