Thursday, December 4, 2008
A Liberal Bailout Proposal
I'm against any proposed Big Three bailout. Period. As far as I'm concerning, bankruptcy - a modified, pre-packaged Chapter 11 reorganization filing - is the way to go.
Unfortunately, chances are the Democrats - supported in the end no doubt by more than a few Republican (in name only) Members of the House and Senate - will, when push comes to shove, give the car company executives, stockholders, and unions what they want... a bailout.
Faced with a bailout scenario, what should be the terms? What concessions - what give-backs - should both management and labor be required to accept in order to ink a deal that will ultimately pick the pocket of every American taxpayer forced to "invest" in a bailout scheme?
Well... here's one idea...
According to the most current U.S. Census data, real median earnings of men who worked full time, year-round in 2007 was $45,113.
What does this have to do with the bailout you might ask? Simple. I propose that as a stipulation for any proposed bailout of the Big Three no worker - union or management, "worker" or executive - may be paid more than $45,113.
Would this mean pay cuts - huge pay cuts for some? Damn straight. Assembly line workers with 20 years on the job... the new salary is $45,113. Period. Executive vice presidents who started out as management trainees 20 years ago... the new salary is $45,113. No bonus. No stock options. Take it or leave it.
Understand... by definition fully half of American full time, year round working adults make less than this median individual income of $45,113. In fact, when you throw adult women working full time, year round into the statistical mix, median individual income is even lower. Still... for the sake of discussion I chose to use the higher figure - think of it as a rounding up to the benefit of the bailout recipients.
What could be more fair...? What could be more just...? Sure, we're talking pay cuts - no doubt in many cases drastic pay cuts - for those who make their livelihoods off of the Big Three. But folks... the Big Three will no longer be paying the tab - we, the taxpayers, are now being asked... begged... to "rescue" both workers and management of the Big Three. Well, so be it. If Congress decides that this is something they "need" to do, so be it. But by God, if Congress walks this road... there's simply no justification for them to add insult to injury by forcing the half of American taxpayers who make less than $45,113 themselves to subsidize higher salaries than those they make themselves for those they're bailing out! The very idea is ridiculous!
So there you have it. My "Liberal" Bailout Proposal! I can't imagine a fairer, more rational, more liberal proposal. Talk about representing the interests of the working man, the common man, the have nots (or to be fair the have less') against those who would otherwise exploit them - this plan ensures that no exploitation will take place.
Subscribe to:
Post Comments (Atom)
20 comments:
What you're proposing is rather like the Steve Forbes "flat tax" - with a twist. It's not a "liberal" proposal, and it's going to kill the yacht industry! N
It's just an empty symbol, like the CEOs car-pooling down to DC. And, are you going to give UAW members who are making around $30K/annum entry level wages a raise up to the median?
Do people making that median income or less pay income taxes? Perhaps we should have a checklist of services available by the government and have every citizen check off what they really need. Then, if they want a service, we could index their tax rate to cover those services they demand of government (outside the constitutionally mandated ones). Don't want a service?Then you don't have to pay for it; but you will not be able to claim that service at any point. I have a feeling we would end up with a much smaller list of required government services than we currently have. It would be a pay to play system.
Maria--
If you think filing your taxes is over-complicated now, imagine trying to do so under your system. And how do you police it? If I check the box that says I don't want to pay the tax for upkeep on the interstate highway system, who's going to bust me when I drive my Buick down Route 80?
Rob. (*SMILE*) Oh, Rob. (*GRIN*)
First of all, yes, I'm guessing that "car pooling" vs. individual private jets saved a few bucks... tens of thousands of bucks - perhaps more. (*SNORT*)
And what do "entry level wages" have to do with anything? (*SNORT*) What... are you suggesting that $45,113 is too high and that we should lower it to $30K? (*GRIN*) O.K. I suppose we can negotiate that. (*WINK*)
Seriously. While my proposal in indeed partly symbolic, it would also save God knows how many millions upon millions of dollars.
I know you're in favor of the bailout. (*SHRUG*) Why you'd be against a salary cap that would apply to executives, to management, as well as to workers I'm not so sure of. (*SHRUG*)
Continuing...
Maria. Yes. Of course the average median wage earning American pays federal income taxes.
As to your idea...
(*CHUCKLE*)
BILL
Bill,
It's a good idea, except for one problem: IT'S STILL A FRIGGIN BAILOUT!
No matter how many strings you attach to it, we can't afford it, and it won't work. Period.
Let the Big 3 die. Seriously. Although I honestly don't think all of them will. I suspect Ford would survive regardless of a bailout. GM will die, but they deserve to die, as one of the most mismanaged companies of the past half century. Chrysler is on the fence.
Ed,
Thanks for stopping by! Great to hear from you. (*NOD*)
I hope you call your congressman and both your senators and tell them what you just told me.
BILL
Why you'd be against a salary cap that would apply to executives, to management, as well as to workers I'm not so sure of.
I'm not. And I didn't suggest that I am.
My predication is that if the Big Three are allowed to die, the Honda and Toyota (etc) plants currently operating in the U.S. will also go away. Why should they pay even the wages necessary to employ non-union auto workers in this country, when they can get the same work done cheaper in the Third World, if they have no competition in this country?
It should not go unmentioned, either, that countries all over the world are making capital available to their automobile industries. This mess is not entirely the fault of bad planning by the Big Three.
My predication is that if the Big Three are allowed to die, the Honda and Toyota (etc) plants currently operating in the U.S. will also go away.
Once again, Dear Rodak demonstrates why a liberal arts undergraduate or graduate degree is a total waste of time and money without economics or math courses ...
We'll see.
Presumbably, btw, all of the bizzniss whizz kidzz who put us where we are today took all the requisite economics and math classes at Harvard, Yale, Chicago, etc.--and aced 'em too!
Rodak,
The only flaw with your theory is the foreign automakers still have to compete with each other. Hence it's more economically feasible for them to have plants in the U.S., although I could see the argument for possibly relocating to Mexico.
Shipping cars from overseas is an expensive proposition, even if you get cheaper labor there.
The only flaw with your theory is the foreign automakers still have to compete with each other.
If it's cheaper to assemble the cars in Mexico than in Tennessee, then that's the competitive choice. It's also cheaper to truck new cars from Mexico to, say, Oregon or Maine, using Mexican drivers, than it is to truck new cars from Flint using Teamsters.
The foreign companies built factories in the U.S. to compete with Detroit.
What this discussion is doing is exposing the fatal flaw in global capitalism, as seen from the perspective of the First World: the only way to stay competitive is to come down to Third World standards of living. Without unions, workers are hired on a take-it-or-leave-it basis, and since they have to eat, they take it.
Rodak,
Once again, your world view shows it's own flaw: it's static. You assume worker A can only do job B. But if worker A can't get job B, or it doesn't pay him what he thinks he's worth, he will go and do job C instead, or move someplace where job B will pay him better.
You also ignore the laws of supply and demand. Where there is a shortage of workers for a specific task, those workers tend to make more if demand is constant. If demand goes down, that means we, as a society, don't require that labor, and workers who remain in that line of work risk making less.
Ed--
Right. You just restated what I said in your own words. Bravo.
Demand for workers making a wage that will allow them an "American" standard of living has gone down because there is now a copious supply of workers in other countries who will do the same work for much less money, and whose governments will not allow them to organize to demand more. American workers are s.o.l., no matter what kind of work you are talking about.
The rest of the world has caught up with America in terms of everything but some kinds of high tech, which are not labor instensive. If an auto worker ends up making $8 hr., what do you think that a clerk at Wal-Mart will make? What will an office worker make?
The American standard of living is not a guaranteed gift of God.
re: Rob; December 16, 2008 5:09 a.m.
Right you are, Rob.
Rob... I'd like you to meet Patrick J. Buchanan.
(And Ed... I'd like to introduce you to President Ronald W. Reagan.) (*WINK*)
http://www.humanevents.com/article.php?id=29926
(BTW, I just came upon the above. In other words, I only read Buchanan's views AFTER posting my own on this general topic - as it relates specifically to the American auto industry - on the above thread, titled, "Please Allow Me To Introduce...")
Anyway... EXCERPTING Buchanan...
-- In a good year, Americans buy 17 million cars. A more populous EU probably buys as many. Three billion people in India, Southeast Asia and China, four times as many people as there are in the EU and United States, are moving toward the middle class. They, too, will be wanting cars. And millions of them love American cars. Is the Republican Party so fanatic in its ideology that, rather than sin against a commandment of Milton Friedman, it is willing to see America written forever out of this fantastic market, let millions of jobs vanish and write off the industrial Midwest? So it would seem. "Companies fail every day, and others take their place," said Sen. Richard Shelby on "Face the Nation." Presumably, the companies that will "take their place," when GM, Ford and Chrysler die, are German, Japanese or Korean, like the ones lured into Shelby's state of Alabama, with the bait of subsidies free-market Republicans are supposed to abhor. In 1993, Alabama put together a $258 million package to bring a Mercedes plant in. In 1999, Honda was offered $158 million to build a plant there. In 2002, Alabama won a Hyundai plant by offering a $252 million subsidy. "We have a number of profitable automakers in America, and they should not be disadvantaged for making wise business decisions while failure is rewarded," says Sen. Jim DeMint of South Carolina. DeMint is referring to "profitable automakers" like BMW, which sited a plant in Spartanburg, after South Carolina offered the Germans a $150 million subsidy and $80 million to expand. Be it BMW, Honda, Toyota, Nissan, Mazda, Mitsubishi or Hyundai, the South has become a sanctuary for foreign assembly plants, for which Southern states have been paying subsidies. Fine. But why this "Let-them-eat-cake!" coldness toward U.S. auto companies? General Motors employs more workers than all these foreign plants combined. And, unlike Mitsubishi, General Motors didn't bomb Pearl Harbor. Do these Southern senators understand why the foreign automakers suddenly up and decided to build plants in the United States? It was the economic nationalism of Ronald Reagan. --
* ED!!! PAY ATTENTION!!! We're talking The Gipper here!!! (*WINK*)
-- When an icon of American industry, Harley-Davidson, was being run out of business by cutthroat Japanese dumping of big bikes to kill the "Harley Hog," Reagan slapped 50 percent tariffs on their motorcycles and imposed quotas on imported Japanese cars. Message to Tokyo. If you folks want to keep selling cars here, start building them here. Fear of Reaganism brought those foreign automakers, lickety-split, to America's shores, not any love of Southern cooking. Do the Republicans not yet understand how they lost the New Majority coalition that gave them three landslides and five victories in six presidential races from 1968 to 1988? Do they not know why the Reagan Democrats in Pennsylvania, Ohio and Michigan are going home? The Republican Party gave their jobs away! How? By telling U.S. manufacturers they could shut plants here, get rid of their U.S. workers, build factories in Mexico, Asia or China, and ship their products back, free of charge. Republican globalists gave U.S. manufacturers every incentive to go abroad and take their jobs with them, the jobs of Middle America. And, for 30 years, that is what U.S. manufacturers have done, have been forced to do, as their competitors closed down and moved their plants abroad in search of low-wage Third World labor. --
* ED...?!?! YOU STILL WITH US - me and Pat Buchanan and... err... I guess ROB to a certain extent...??? (*CHUCKLE*)
-- In today's world, America faces nationalistic trade rivals who manipulate currencies, employ nontariff barriers, subsidize their manufacturers, rebate value-added taxes on exports to us and impose value-added taxes on imports from us, all to capture our markets and kill our great companies. And we have a Republican Party blissfully ignorant that we live in a world of us or them. It doesn't even know who "us" is. We need a new team on the field and a new coach who believes with Vince Lombardi that "winning isn't everything. It's the only thing." --
* COM'ON, GUYS... JOIN ME...
* USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA!...
BILL
Rodak,
So our auto workers are overpaid, based on world-based values for auto workers. So you think we need to artificially inflate the wages they're paid?
Bill,
I have two words for you: Smoot-Hawley.
That said, if another country chooses to subsidize their products, or put tariffs on ours, I agree with you 100%. But if they are just beating us at our own game on a level playing field, isn't it our responsibility to make better products?
Ed,
You really need to learn more words.
(*WINK*)
Here...
Dick... Jane... Spot... Run... See...
(*GOOD NATURED ELBOW TO THE RIBS*)
Here's some light reading for you:
http://findarticles.com/p/articles/mi_hb5730/is_/ai_n29450142
We're committing national suicide and you say "Full Steam Ahead."
(*SHAKING MY HEAD*)
BILL
Post a Comment