econarchy

Cars that nobody wants, unsustainable labor costs…. Detroit is doomed and it is downright foolish for the taxpayers to keep it alive. Today we heard that the Unions are talking with GM again after closing down discussions over the weekend. The Unions are a joke. The very fact that we let any group collude to fix wages is absolute insanity, but we do. The US auto companies have had no choice but to cave to the extortion tactics of the Unions for the past 50 years, and they have been suffering ever since. Nobody in their right mind would suggest that the US auto makers are on par with the Imports, and the Unions are largely the reason why. Bailing them out now is just a band aid on a severed artery. Without finding workers that are willing to work for the actual value of unskilled labor, say $10 an hour, the US auto makers have no chance. They also need to invest heavily in automation - something the Unions have prevented for decades.

Unions are the kryptonite to productivity and efficiency, and that is a FACT. Nothing would make me happier than to see Detroit and all it’s Unions flushed down the crapper. Illiterate, uneducated auto workers earning $100k+ per year….. sickening.

So why let Detroit fail, but bail out the banks? The reason is simple - we don’t need American cars, but we need the American banking system. Banks keep EVERY buisiness afloat. They keep the entire economy afloat. Banks need bailed out and, as much as I hate to admit it, banks should probably be Nationalized. Or at the very least, much more seriously regulated.

Even fastidious Conservatives like me understand that certain things need to be managed by the Government. Things like the Military, police, fire departments and yes, Banks, are probably best managed as a public good.

However, unlike all those other public goods I mentioned, we need competition in the banking industry. Therefore the answer is probably much more highly-controlled Government oversight. We all agree that banks cannot act without any rules, because when they do we see people acting only for their own best interests and that is what got us here to begin with. Since we all rely on the banks for the very fundamental stability of the government we need to be able to have confidence in them. And they cannot act with such a high level of risk as they did over the last decade.

So let Detroit fall straight into the pot, but save the banks. But save them with a whole lot of strings attached. No more 25 yr old MBAs with 3 months of work experience sitting on Wall Street earning $2 Million a year to take stupid bets. Regulate the banks and flip off Detroit.