Thursday, November 20, 2008

Handouts and Chutzpah

I have to admit, I am not certain how to think about the myriad and complicated bailout plans both passed and proposed. On the one hand, I am wary of giant corporations that clearly screwed up royally suckling at the teat of federal largesse when they will reject government oversight or regulation whenever possible. On the other hand I worry that not providing federal help will make a nightmare economic scenario all the more intractable. I keep remembering the unseemly way that the airline industry after 9/11 ran to get handouts while the smoke was still wafting from the charred remains of those horrible attacks despite having resisted federal oversight and despite security malfeasance by the airlines and airports having contributed to the perilously unsafe situation we faced.

Now we are considering helping out the Big Three automakers. I am not theoretically averse to this, though I do hope that any of this support comes with serious strings attached. Let's see a few austerity demands, not to mention provisions for the common good (hello electric car!) come with any federal support. But it becomes a lot more difficult to sympathize with an industry that sent the three CEO's to Washington on private corporate jets or that at least one of the CEOs earned @28 million last year.

As Anne Kornin writes at the Set America Free Blog:

I am reminded of Nero and violins. That $36 million GM private jet is the cost of making 360,000 cars gasoline-ethanol-methanol flexible right there (it’s a $100 cost per car,) breaking oil’s monopoly in the transportation sector through fuel choice. And GM has 8 such jets. Add up the Ford and Chrysler plane fleets and we’re talking the cost of making several million cars gasoline-ethanol-methanol flex fuel vehicles. Given that taxpayer money is on the table here, the trade would seem only fair. I for one don’t appreciate having taxpayer money be used to pay for someone’s private jet and 8 digit salary. If they earn it, fine, hats off, but once their hand dips into taxpayer pockets for a handout, that’s quite a different story. And I would guess others share the sentiment. Let Congress know what you think.

As I say, I am fairly ambivalent about all of this and want to see it play out. I am not averse to strategic aid to struggling industries. But right now my inclination is to say that the auto industry appears to be the victim of its own profligacy and that any help should begin with paring waste at the top of it and any other industry or field in which those at the top do little to sacrifice while cutting jobs, paring benefits, and asking for government aid but maneuvering for little oversight.

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