Archive - Nov 15, 2008
(Originally published at Greater Democracy.)
Everyone is talking about ways to bail out the auto industry now, so I thought I would share my socialist plan.
First, I would not lend the automakers $50 billion, or $25 billion, or what they are currently asking for. It just sounds a little bit too much like the No Income, No Asset (NINA) loans, that are the current whipping boy in the housing crisis.
That said, I do not believe we should abandon the workers or the industry and we should come up with some solutions.
One of the complaints of the U.S. automakers is there larger healthcare and pension costs. So, the Government should simply take those over now. Provide every autoworker and retired autoworker the same healthcare policy that congress gets. This would most likely result in better coverage for workers in a program that is probably better run and more cost effective, and it would relieve the automakers of a major burden, giving them a chance to be more competitive.
Other companies and industries will scream, ‘No Fair!’ and ask that their employees get added to this national healthcare plan and the camel’s nose under the tent will lead to a national healthcare plan that is long over due. If, on the other hand, we allow the car companies to fail, all of the workers will end up out on unemployment and getting their healthcare, again at the expense of the government, but in less effective methods. Let’s just do it right, right now.
Next, the government should take over the pensions of the autoworkers. I’m not talking about the safety net of social security, which some people wanted tied to individual investors decisions in the stock market. With the Dow Jones Industrial Average now at 61% of its 52 week high, yeah, that looks like a good idea.
Nope, we need full pensions guarantied by the Government. Of course, like universal healthcare, we already have it. It is the Pension Benefit Guaranty Corporation. This is the federal corporation that currently protects around 44 million Americans whose private pension plans failed. If we don’t do something about the automakers, their plans are likely to end up there, so why not move them there now, with a major infusion of capital from the government. Maybe all that bank stock that the government is buying can be given to the PBGC.
The final thing I would do is buy out the research departments of the big three. Years ago, Chrysler was bailed out by the government. Part of the argument was that Chrysler made vehicles crucial to our national security.
Well, if we want national security, we need to reduce our dependence on foreign oil. We need to fund research that will move us towards energy independence and this is especially important in the transportation sector. If the government was to create an energy independency research agency built in part from researchers gleaned from the auto industry and then start ordering cars for the Federal Fleet based on this research, we could turn around the auto industry a lot more quickly than simply giving more loans to failing companies. For that matter, perhaps the Federal government could even give loans to the State governments so they could update their fleets with much more efficient vehicles.
Instead of a $50 billion loan, how about a larger order for plug-in hybrids or other vehicles that will help our efforts to reduce our dependence on foreign oil?
So, let’s think very carefully about who we are bailing out, the auto industry, the workers, or our country. This could be an opportunity to bail out our country with some real change.