The country has had a little bit of time to digest what an epic train wreck of an idea these bailouts are. They finally got one right: the auto bailout was shot down. Tennessee’s Bob Corker has been all over this morning. Here’s his 3 part plan:
- It would have required the two firms closest to bankruptcy, General Motors and Chrysler, to reduce their debt by two-thirds. Bondholders would have “plenty of incentive to make sure that the debt is reduced by two-thirds” or risk losing even more if the firms go into Chapter 11, where their bonds might be further discounted, Corker said. “We’re going to force them into bankruptcy if they don’t do this,” he said bluntly.
- He also would have required that the Voluntary Employee Benefit Association, the entity created by the car firms and the UAW to handle retiree health care benefits, accept stock in lieu of half the cash payments due. The carmakers had agreed to fund VEBA but can no longer afford to do so. “If a company goes bankrupt, these future payments are never going to happen anyway,” he said.
- Finally, Corker’s bill would have forced the UAW to lower its members’ wages to the level of employees at Honda and the other foreign-owned car manufacturers operating in the United States.
The best part? He fought appointing a “car czar”. We’ve already talked about how much I hate that term.
At some point we’ve got to cut the bleeding. This particular bailout hits closer to home for a lot of people, as there are millions of jobs in the US that depend on this industry. Shouldn’t that be all the more reason to make sure that it’s functioning properly? For an industry as large and important as the auto industry is, shouldn’t it be IMPERITIVE that they function efficiently? As long as they are opertaing with a UAW handicap, they will struggle.
Harry Reid expressed his profound sadness for our nation. I know I’m not alone when I want to punch him in the face. (No, I don’t really want to punch him.)
Majority Leader Harry Reid, D-Nev., called the bill’s collapse “a loss for the country,” adding: “I dread looking at Wall Street tomorrow. It’s not going to be a pleasant sight.”
And guess what. He’s right. Why? Because people value immediate security over a long term solution. Ugh. Why are American’s so short sighted?
