A few months back I had a series of blog posts I referred to as “Grand Theft Auto Bailout” (all of which are collected here). I only really started blogging seriously since the election and it was the first major issue that bothered me. In fact, my favourite piece of reader mail was from a guy who claimed I knew nothing of the auto industry and said he was forced to “question my credibility.”
Pssst…I’m a blogger. I ain’t got no credibility.
However if there was one cat who did have the credibility, it was son of Detroit and former presidential candidate Mitt Romney. Romney penned an editorial calling for a structured bankruptcy, to the cries of…well, all the usual voices who cry whenever a Republican says something that defers from Dear Leader.
Turns out Mitt may have been right, but instead of listening to me (since as we’ve agreed, I ain’t got no credibility) take it from Bill Bennett…
This is part of the cost of a government bailout now, government dictates on personnel. That in and of itself may be a good message for companies wanting the United States, i.e., the taxpayer to bail them out for business decisions that simply have not worked. We have now given GM and Chrysler almost eighteen billion dollars and they are seeking another twenty two billion.
I understand the argument that we cannot allow these auto-makers to fail. What I understand less is why Mitt Romney wasn’t correct, why couldn’t these companies have gone through a managed bankruptcy? Writing this back in November, I think he’s been proven right: once these companies receive taxpayer money, there’s a reverse set of incentives to change radically enough to turn the companies around and they will ultimately come back for more and more money.
And is there any wonder Romney kicked everyone else’s ass in our straw poll?
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