Bail out the Big Three!

Thanks to the Cleveland Plain Dealer for this and for this, from Thomas Suddes:

It’s hard to imagine anything more disgusting than the blowhards who claim that consigning Chrysler, Ford and General Motors to Bankruptcy Court would be a good thing.

In fact, cutting Big Three workers’ wages would also cut spending at supermarkets and malls, shrinking many other Ohio paychecks, too.

And benefit cuts would add clients to Ohio’s Medicaid tab, which bulges now like a glutton’s waistline.

Critics of a Big Three bailout relish double-talk – “magic of the market,” “creative destruction” – because it hides the cruel, real-world truth. A collapse of the Big Three would destroy Ohio families and towns, especially in Greater Cleveland and the Dayton area. Ohioans in Twinsburg, Lordstown, Warren, Moraine and a score of other towns deserve better from their country than to be declared human surplus.

According to data from the state Department of Development, almost 15,000 Ohioans work for General Motors, about 11,000 for Ford, almost 7,000 for Chrysler and 6,000 for Delphi, the parts manufacturer. If you want to argue that losing or “downsizing” those payrolls would be no big deal, try to sell that story elsewhere. I’m from Youngstown and my father worked in a steel mill. So did the whole neighborhood. Correction: What was the neighborhood. End of story – a heartbreaking story.

In the 1970s, Wall Street and Washington caused American steel’s troubles, but the “Free to Choose” economic cult predictably blamed the United Steelworkers. Union members had the gall to prefer a living wage and decent benefits to company-town serfdom. Yet the steel those “overpaid” men and women produced – not wage cuts dreamed up by economists with lifetime jobs – is what built Ohio.

Sure, there’s more in play politically in the Detroit bailout stalemate than campaign contributors’ 30-year war on the living standards of American working families.

As Gerald F. Seib wrote so eloquently in Tuesday’s Wall Street Journal, congressional factors also are at work. First, “Western, environmentally minded [Democratic] leaders . . . don’t see the auto companies as particularly important to their region, or friendly to their green causes.” Second, among congressional Republicans, “foreign-owned auto plants concentrated in the Republican-leaning . . . South . . . stand to benefit if the Big Three American companies go down.”

Suddes is right that a bankruptcy consigns Ohio (and Michigan, and several other states — but I live and work in Ohio and Michigan) to economic disaster.  In bankruptcy, the debtor delays and reduces its payment of its debts, and it cancels contracts without any liability.  In other words, if any of the Big Three go into bankruptcy, every business that services the auto industry directly or indirectly will be jeopardized.  Perhaps these businesses will be reconsituted somewhere and some way in the future, but in the meantime entire cities, towns, and states will be uprooted.  Richard Shelby of Alabama declares in the Senate that we can’t bail ou the Big Three.  He doesn’t mention the benefit that would bring to the non-union, Japanese and German auto makers with factories in his state. Some people do mention the United Auto Workers, as if its mere existence is proof of corruption and ineptness, but they don’t mention the enormous concessions the UAW has made in the past several years.  It is time to help out Detroit and the entire surrounding Great Lakes region.