Turned away by the Senate, the Big Three auto makers have resorted to begging the Bush administration to rescue them from the plight in which they now find themselves as a result of decades of poor management. Wailing and gnashing of teeth are all the rage in Washington as these wannabe plunderers warn us of dire consequences unless the government acts as the middleman in their attempts to raid the taxpayers’ bank accounts.
Well, ho-hum, auto makers are scarcely unique in their lack of scruple and their desire to loot the Treasury. What strikes me in the latest reports on this sordid business is not so much the auto executives’ undignified prostration and supplication before the Almighty Government, but the statements being spewed out by our ever-faithful public servants.
Perhaps the single good thing that might have been said about the George W. Bush administration is that its spokespersons sometimes talked as if they supported the free-market system, even if they virtually never acted accordingly. Now, however, even the pro-market talk has gone by the boards.
Thus, according to an Associated Press report, White House press secretary Dana Perino said: “Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms.” [But] “given the current weakened state of the U.S. economy, we will consider other options if necessary including use of the TARP program to prevent a collapse of troubled automakers. A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time.”
Everybody knows that the only way to find out who your true friends are is by noting who stands by you when you are down and out. Political principles work the same way. If you are prepared to throw them out the window when times are tough, then you never really held them in the first place. Principles are intended especially to guide our behavior in difficult circumstances. If they don’t do so, then our proclaimed principles stand revealed as having been nothing but rhetoric in the worst sense of the word.
Awaiting his ascent to the throne, Barack Obama chimes in: “My hope is that the administration and the Congress will still find a way to give the industry the temporary assistance it needs while demanding the long-term restructuring that is absolutely required.”
Ah, yes, “the long-term restructuring that is absolutely required.” And what, pray tell, would a man of Obama’s background and expertise know about this matter? Well, I venture to answer: approximately nothing. In fact, I will venture further to say that he knows less than nothing, because I believe that the relevant information about such needed restructuring would never receive the slightest consideration from this combination messiah and male model. Any involvement he might have in the matter would be governed exclusively by political expediency, and hence can hardly be expected to promote the auto companies’ long-term economic viability.
“House Speaker Nancy Pelosi,” the AP reports, “urged the president to demand ‘the same tough accountability’ and taxpayer protections from the automakers as was contained in legislation that cleared the House at midweek.” Fancy that! Pelosi demanding tough accountability and taxpayer protections. Okay, Madam Speaker, your demand is entirely reasonable. Yet, to recite an apt verse, “Why beholdest thou the mote that is in thy brother’s eye, but considerest not the beam that is in thine own eye?” To be more specific, why don’t you employ your considerable power in the House of Representatives to rein in the currently out-of-control government spending, lending, and regulating? I can’t think of anything better calculated to serve the public interest. It’s not really all that difficult to break the addiction, Madam Speaker: just say no.
All politics being local, Republican congressman Thaddeus McCotter of Michigan was consulted, and he declared, “With the legislative opportunities now exhausted, I urge the president of the United States to immediately release Wall Street TARP funds to the domestic automakers to avoid their impending bankruptcy and its consequent devastation of working families and the depression of our American economy.”
Interesting speculation: without a Big Three bailout, the end of the economic world as we know it will ensue. Not that I doubt the congressman’s sincerity, of course, but in accordance with Ronald Reagan’s admonition to “trust, but verify,” I checked the Federal Election Commission’s records of contributions to Congressman McCotter’s campaigns in recent years. I discovered what appears to be reasonably firm evidence that not only is he a man who stands willing to sell his soul, but to a great extent he has already done so. Of particular relevance here are the following amounts received (according to my count from the FEC listings):
- Chrysler Service Contracts, Inc., Political Support Committee, $14,000;
- Dealers Election Action Committee of the National Automotive Dealers Association, $32,500;
- Ford Motor Company Action Fund, $22,100;
- General Motors Corp. Political Action Committee $26,250.
If you suspect that Congressman McCotter is simply carrying water for his corporate supporters, then you just may be onto something.
In any event, we may confidently dismiss his forecast of the catastrophic economic consequences that would result from the Big Three’s bankruptcy, which is utter nonsense. Evidently, Congressman McCotter skipped the bankruptcy course when he attended law school. (Again, however, in the true spirit of Christmas, I wish to give him all the credit he so amply deserves for his fund-raising ability. It’s enough to make you wonder how, at this point, he manages to have any soul left to sell.)
Robert Higgs is Senior Fellow in Political Economy at The Independent Institute and Editor at Large of the Institutes quarterly journal The Independent Review. He received his Ph.D. in economics from Johns Hopkins University, and he has taught at the University of Washington, Lafayette College, Seattle University, and the University of Economics, Prague. He has been a visiting scholar at Oxford University and Stanford University, and a fellow for the Hoover Institution and the National Science Foundation. He is the author of many books, including Depression, War, and Cold War.
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