The following is an excerpt from OpinionJournal.com’s “Best of the Web” written by the editor, James Taranto.
Help Wanted
“NY Police Seek Tiara-Wearing Thief”–headline, Associated Press, Dec. 16
Lesson 1: Building a Cocoon
“Caterpillar Training at Watertown High School”–headline, Argus Leader (Sioux Falls, S.D.), Dec. 15
Good for GM, Good for America?
Last week Senate Republicans mounted a successful filibuster against legislation to give a handout to Detroit’s Big Three auto makers. President Bush is looking for ways to circumvent the lack of authorization for a Detroit welfare package, but a pair of polls out today suggest that he finds himself in the familiar position of being on the wrong side of public opinion.
The Washington Post reports that its poll finds 55% of Americans oppose the Detroit handout, while only 42% support it. Democrats have become the party of corporate welfare, with 52% supporting the bailout; majorities of Republicans (69%) and independents (57%) are opposed.
Most surprising finding: “Union households are no more apt than those without a union member to favor the plan, 44 percent compared with 42 percent.” The United Auto Workers wants government money so as to protect the work rules and artificially high emoluments that have helped make Detroit uncompetitive.
Podcast
The alternative to a welfare package would be a proceeding under Chapter 11 of the Bankruptcy Code, which would allow a federal judge to oversee the restructuring of each company’s obligations, making it possible to revise the onerous union contracts, as well as its uneconomical relationships with dealers (explained in this 2006 Forbes article).
We keep hearing the argument, originally put forward last month by Rick Wagoner, GM’s delightfully named CEO, that people won’t buy cars from companies that have filed bankruptcy, for fear that parts and service will become unavailable. Are consumers really so stupid that they would have more confidence in a company that goes on welfare to support an unsustainable business model than in one that is being restructured through bankruptcy court?
No, according to a USA Today poll:
The survey of 1,008 adults Friday to Sunday found that 82% would at least consider a Detroit-brand vehicle. Of those, 67% would do so even if the company were in bankruptcy court.
The Associated Press, however, reports that welfare for Detroit has some support:
As the entire U.S. auto industry teeters on the brink of collapse, Toyota and other Japanese carmakers are hardly rejoicing. They say the bankruptcy of any of Detroit’s automakers would spell serious trouble for them, as well. . . .
One major problem is that Japanese carmakers in the United States share many of the same parts suppliers. If a Detroit automaker were to collapse, suppliers would likely follow, setting off a chain reaction that could wreak havoc for Japanese production in a vital market.
More broadly, the U.S. crisis could lead to huge job losses and further weaken consumer spending, especially for big-ticket items such as automobiles. Together, the three big American automakers employ 239,000 workers in the United States.
Counting other businesses that depend on the automakers, economists estimate that 2.5 million jobs would be lost if all three companies went out of business.
But there is a more compelling reason why Japanese car makers would want welfare for Detroit: precisely because it would perpetuate the high labor and retailing costs that put the Big Three at such a disadvantage vis-à-vis Toyota and other foreign manufacturers.
For more “Best of the Web” click here and look for the “Best of the Web Today” link in the middle column below “Today’s Columnists.”
