As many of us already know, the bailout bill for The Big Three automakers, Ford, GM, and Chrysler, was shot down recently by conservative Republicans, despite the efforts by Democrats and President Bush to give $14 billion in loans to the industries, which predict bankruptcy in less than two weeks, although Ford is said to be able to survive the lack of bailout money. Still, its future is pretty bleak.

In addition to the $14 billion dollars (which was reduced from about $25 billion), the plan called for a "car czar", to be appointed by the president. The car czar would have the authority to give out the loans to the automakers, but also to cut their funds and bankrupt them if they did not work out deals with labor and do more to increase their own viability. Fuel-efficiency would likely be another mandate under the upcoming Obama Administration. The bill was shot down, after passing 237-170 in the House, in a 52-35 vote. It was eight votes too few to stop a Republican filibuster. Ten Republicans and forty-two Democrats voted in favor of the bill.

Why was there opposition?
The main feud was over the issue of when union autoworkers would have their wages slashed to the level of nonunion workers of foreign-owned corporations like Honda and Toyota, a GOP-supported measure. The top Republican negotiator, Senator Bob Corker of Tennessee, said that representatives from the United Auto Workers would not agree to a specific date. "We offered any day, any day, in 2009," Corker said. The failure to agree on this caused the fall of the bill. The UAW refused, because it did not want to break from its current contract with management until it expires in 2011. The current contract, made early this year with GM, was to shift $46.7 billion in employee health care obligations from the company to the union, while the company would put $26.5 billion into a trust fund, to be managed by the union. Ford made a similar contract with the union, shortly after GM's. On top of that, The UAW was simply not willing to take more cuts for workers after CEO's and executives had done little to share the liabilities when they had been leading their corporations into losses. While GM was already performing badly and removing people of their jobs in 2005, its CEO, G. Richard Wagner, had already secured a $4.6 million dollar annual pension, about twice as much as his current salary at the time. As reported in early 2007 last year, Ford's CEO Allan Mulally had already earned $28 million (not all in direct cash) after working there for four months, while Ford was reporting losses of $12.7 billion.

Some Republicans also simply opposed the taxpayers having to pay for the auto industry's mistakes. It might to do well to reflect that many of the workers are taxpayers themselves, accounting for three million jobs in the nation, and if they lose work, then Uncle Sam loses a lot of tax revenue. Not only that, the failure of The Big Three will only make economic recovery even more difficult. The delayed response by the government to help the economy during the Great Depression is largely why it dragged on for so long.

After the failure of the bailout, Democratic Majority Leader Harry Reid of Nevada lamented, "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight." That very day the Dow went up 64.59. NASDAQ was up 32.84. S&P 500 rose by 6.14. It is fair to note that this optimism came before the bill failed, with the hope of its success. Projections are already looking grim for Wall Street.

What do I think?
I think the industries should have been bailed out. I think the executives who have been smoking dollar bills all this time should be more liable. Bravo to Alan Mulally for offering to work for a dollar a year. It's a bit late for that, though, after he and his colleagues already rustled gross fortunes while middle-class Americans have had to struggle. Now even more are likely to struggle. Jobs will be difficult to find as more businesses are forced to close down. Perhaps the loss in competition will help the Japanese manufacturers so they can take over the lost facilities and hire back many of these people. Although, perhaps not. You'd have to be smart or lucky to do well in this economy. As always the rich get richer and the poor get poorer. That's Reaganomics for you. Let's not be deceived the next time this happens.



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