BIO
MOST SHARED
- Timeless and Time-Tested Warren Buffett Watch Predictions
- Should Homeowners Be Able To Walk Away From Mortgage?
- Dubai World Set to Restructure About $26 Billion of Total Debt
- Goldman Sachs Party Ban: No Gatherings of 12 or More
- Black Friday Sales Disappoint Investors; Amazon Up
- Nov. 30: Unusual Volume Leaders
- Oil Demand Sees Year-Over-Year Rise, First Since 2007
- Blue Nile CEO: 'We're Having the Best Cyber Monday Ever'
- Notre Dame Fires Charlie Weis After 5 Seasons
- Cyber Monday: The Last Vestige of Dotcom Hype
- Cramer: Dubai Debt Can’t Sink These 6 Dividend Stocks
- Your First Move For Tuesday December 1st
- Web Extra: The Microsoft Trade
- Dubai: Casino Fallout
- Pops & Drops: American Eagle, Amylin
- Bold Call of the Day: Abercrombie
- Chartology – Year End Sell-Off Ahead?
- It's All About Jobs
- Cyber Monday Strategy Session w/ Gene Munster
- Bove: Only 4 Banks Don't Need To Raise Capital If...
RSS FEED
Text Size 
 |
AP General Motors Headquarters |
] is not good for America, and vice versa. I don't object to the government giving GM tens of billions of dollars so it can avoid bankruptcy, or at the very least liquidation.
Just the opposite, in fact!
So what's the problem? In order to stay above water GM needs to follow through with a restructuring plan that includes laying off 47,000 workers and closing five more factories in the United States.
GM needs to fire a ton of people if it's ever going to be a profitable business again. The same goes for Chrysler and Ford [F
Loading...
()
]. All three companies probably need to break the back of the United Auto Workers and dramatically reduce the wages of the workers who they don't lay-off.
We can save the American auto industry.
We can do that by giving GM the money it asks for and giving the company time to fire a lot of people and cut wages. But I have to wonder, isn't there a better use for that bailout money? We have a huge problem with unemployment and falling wages in this country. Couldn't we come up with a way to deal with not-so-big three that doesn't make those problems worse?
Couldn't we do something to save our parents and grandparents who have these jobs? Nothing freaks me out me more than the idea of the older generation being broke and jobless.
Look, if we wanted to, we could give GM, Chrysler and Ford a lifeline that would allow them to continue to operate in their current, totally inefficient forms. Hear me out. This would be great stimulus because it would keep people in their jobs with the same salaries, thus keeping them in their homes. We'd avoid devastating huge swathes of the midwest. And if we bailout the auto workers they can continue to bail out and subsidize their children.
But it would be terrible for the auto-makers. We'd be mandating that they become government financed zombies, little more than conduits for welfare checks that happen to also make cars. We'd be killing the auto-makers in order to temporarily save the auto-workers.
Over time as these workers retire, we gradually phase out the zombie auto-makers. Don't call it a bailout, call it a government sponsored retirement plan for the entire US auto industry. That way we get more bang for the buck. Our parents and grandparents get to keep their blue-collar royalty jobs, but we don't create any new ones. Or we could cut the lifeline as soon as we get out of the current mess we're in.
The autos are doomed. We can help them go out gracefully, causing as little collateral damage as possible, or we can bail them out just so they can thrash around and struggle to survive.
It will probably cost a lot more to go with my "turn them into zombies and keep them on life support" plan, but we'd be buying an extra dose of social and economic stability.
Right now I say that's priceless.
Questions? Comments? Send them to
- Ever wished your cab driver would stop chatting and just get to where you're going? Well, that moment is closer than ever.
- UPS is giving its customers the option to offset its carbon emissions when sending a package.
- Romania's presidential campaign has been rocked by a video that may show the president striking a 10-year-old boy.
- Raising alligators is hard work, and the fickle taste of rich consumers has just made it much harder, says the NY Times.
- A recent issue of ESPN Magazine was one of its top sellers ever, and it only took scantily clad athletes to make it happen.
- The continued real estate boom in China is partially fueled by a generational flood of newlyweds.
Data is a real-time snapshot *Data is delayed at least 15 minutes