Wednesday, November 12, 2008

Democrats Seek Help for Automakers

I stole the title of this blog post from this morning's New York Times. I don't get it-- we're going to send money to the same people who have consistently opposed higher fuel economy standards and decided to invest in lobbyists and building more SUVs and trucks instead? I thought the Democrats were AGAINST corporate welfare; maybe I'm misremembering.

No, here it is, in the official Democratic Party Platform, 2008 edition, page 25:
We have let the special interests put their thumbs on the economic scales. We do not believe that government should stand in the way of innovation, or turn back the clock to an older era of regulation. But we do believe that government has a role to play in advancing our common prosperity: by providing stable macroeconomic and financial conditions for sustained growth; by demanding transparency; and by ensuring fair competition in the marketplace. ...To make our communities stronger and more livable, and to meet the challenges of increasing global competitiveness, America will lead innovation in corporate responsibility to create jobs and leverage our private sector entrepreneurial leadership to help build a better world.
Giving billions of dollars to three big companies sure sounds like a special interest putting their thumbs on the economic scales.

As does propping up companies that have failed to match the innovation of their competitors. How is that "ensuring fair competition in the marketplace?"

As for corporate responsibility: we'll get responsible corporations when we require them to bear the cost of their failures. Let them go bankrupt.


Anonymous said...

Hmmm..... let me guess. You have no relatives in the auto industry.

You have pointed to some of the problem here. But you have glossed over the complexity of it all, as if we were all free agents in this economy, free to come and go from employers if and when, and just before, they screw up.

There are millions of people along for the ride when these corporate execs make mistakes. Detroit executives were told for years that they were going to have to adjust, and they blew it off. The taxpayer will be paying for their hubris, incompetence, and lack of vision no matter what happens, whether in bailouts or public assistance to laid-off workers.

But there's another kind of hubris that needs an adjustment: this popular fantasy that we really have a free market in this country. We never have.

Like revenge, libertarianism and free market capitalism are "dishes best served cold", not when the humans who will get run over by these theories are standing right in front of you, screaming for help.


Gavin Andresen said...

No, I have no relatives in the auto industry. But even if I did, the chances would be good that they worked for Toyota or Honda or Kia or Nissan or one of the other "foreign" carmakers that have been building cars here in the US and kicking GM/Ford/Chrysler's butts.

Megan McArdle had a fantastic post yesterday on the plight of the autoworkers.

I'm "mostly libertarian"-- I think we're rich enough to afford to pay for social "safety nets," and I think that doing so makes the world a better place.

Extending unemployment benefits for the autoworkers (and parts supplier workers and car salesmen and everybody else who will lose their job in the recession) is a good idea.

But giving or lending lots of money to three particular companies and hoping that they use it wisely-- nuh-uh.