Bailout Mania is a Prelude to Socialistic America
By: Guest Authors
By Richard Geno
A Ford dealer was quoted as saying, “When Senator Richard Shelby said that the Big Three build vehicles nobody wants to buy, he must have overlooked that GM outsold Toyota by about 1.2 million vehicles in the United States, and Ford outsold Honda by 850,000 and Nissan by 1.2 million in the United States. GM was the world’s No.1 automaker beating Toyota by 3,000 units.”
This comment indicates that GM outsold Toyota, and that Ford outsold Honda and Nissan. While this is heavily impacted by truck and SUV sales, so what, anyway? We are talking about profitability, not sales. If you and I build 1,000,000 cars for $20,000 each, spent billions of dollars on advertising and promotion, and then sold them for $21,000 each, we could probably sell a lot of them at a loss also. Toyota, Honda and Nissan pay $12,000 to build their cars, and sell them for $20,000, and they make a profit. That is the way capitalism works. The fact is that Toyota made $4 billion in profits while GM lost $9 billion last year.
We have been talking about the ridiculous concept of “companies being too big to fail.” Anyone who espouses this position obviously believes in socialism. If one accepts that we should have world socialism where governments prop up companies and apply protective trade measures, then, by all means, bail out the auto industry. If one, on the other hand, believes in free enterprise and free markets, we should not provide one dollar of bailout money to any American company.
We have already bailed out a handful of companies for that reason. It is corporate welfare, plain and simple. It is moving us closer and closer to purely a socialistic country. What defense do believers in free enterprise and conservatives have against a universal health care system when alleged conservatives, including the current president, continue to advocate bailout money for profit-making corporations. Obama’s $150 million for his nationalized health care plan is petty cash compared to the trillions we are discussing for bailouts.
The bottom line truth is that other than trucks and gas-guzzling SUVs, Senator Richard Shelby is precisely correct. The 2.5 million workers who lose their jobs can blame the true culprits – the UAW and other unions who made the American auto industry non-competitive.
Some conservatives are trying to rationalize that the government should bail out the Big 3 because they contributed to many causes after 9/11. I would like to respectfully disagree. While they undoubtedly did the things that have been mentioned, they also rewarded the extortion tactics of the UAW by paying $30 per hour more in total compensation to their union workers than American workers at Toyota and Honda get paid. Why should we subsidize profit-making corporations who pay over-bloated salaries and offer non-competitive products?
There is no comparison between American cars and Japanese and German cars. American cars would not get off the assembly line at Toyota or Honda. Why should we provide a lifeline to companies who have made bad business decisions and to the UAW union extortionists? The UAW leaders use the same type of shakedown tactics as Jesse Jackson and his ilk. The chickens have come home to roost.
If we so much appreciate what the Big 3 did after 9/11, then we can simply reimburse them their $1-2 million; but let’s not give them billions of dollars from ordinary American taxpayers. Has anyone seen the multi-million dollar mansions in Bloomfield Hills and Birmingham, Michigan where those auto executives reside? Google it, and you will find hundreds of houses ranging from $2-6 million.
When the Senate deal failed on Thursday, Senator Harry Reid said, “I dread looking at Wall Street tomorrow.” The results are in: The Dow Jones Industrial Average was up 64.59 points, the Nasdaq was up 32.84, and the S&P-500 moved up 6.14. Perhaps there is indeed hope for free enterprise after all. Now, we can only hope that the bailout king, President George W. Bush, doesn’t tap into the $700 billion Wall Street bailout fund for the automakers.
About the Writer: Richard Geno has a bachelor’s degree from the University of California at Berkeley, and also has a master’s degree and a Ph.D. He is a life coach, and author of the books, “The Balanced Life Experience: A Roadmap for Having It All” and “Running Around the World: an MDRT Member’s Journey to Balance.” He is president of The Conservative Forum of Silicon Valley, whose website is at: http://www.theconservativeforum.com.