Archive for auto bailout

The Market Wants to Get Rid of the UAW

Posted in Uncategorized with tags , , , , , , , on December 23, 2008 by enemyoftyranny

In the past, unions served a high purpose. If no one would take care of the workers, the workers had to take care of themselves, and they did. But then the government got involved and took some freedom of choice away from employers. In effect, the government severely hampered how well the employers were able to negotiate. So now we’ve got a monster called the United Auto Workers (UAW). The average wage of someone who belongs to the UAW is about $25 more per hour than someone working for Honda, Nissan, or Toyota. That’s a huge difference, and that’s the main problem of the Big Three auto makers. They have to compete against higher quality cars that are made even cheaper than the crap they send down the line, and they have to keep their retail prices in the same ballpark as the imports. But if they do that, and they DO do that, that means they LOSE money on just about every vehicle they sell. It’s simple math. If you spend on average $25 more per worker per hour, you will not make a profit by pricing your product at the same level as the competition. It’s time to let employers decide what to pay their workers and when to fire them. With the impending failure of the Big Three, the market is telling us that the UAW needs to go, or at least it needs to reevaluate its priorities: have a job, or get paid gobs of money and then have no job. It’s their choice.

George Bush Confirms He’s Anti-Capitalism

Posted in Uncategorized with tags , , , , , , on December 19, 2008 by enemyoftyranny

He almost had me fooled yesterday.  I mean, the news I saw yesterday and last night all pointed to “orderly bankruptcy”, whatever that is.  Even though that was still sort of a mystery, I was hopeful that Bush would do the right thing and let the Big Three fail, even though I knew he would be meddling to some extent.  But today, Bush proved he’s against free markets.  I think the core issue here is that he’s letting fear rule his decision making process.  Instead of letting things happen that need to happen (or else these conditions wouldn’t exist), he’s preventing what needs to happen and ensuring that the industry will continue to lag behind the competition.  The “Below the Beltway” blog quotes Peter Schiff:

“As usual, both sides have it wrong. The government should let the Big Three fail not because we no longer need an auto industry, but because we desperately do. What we do not need is the bloated, inefficient auto industry that we have today. By allowing the Big Three to fail, their capacity will be turned over to new owners who will be able to acquire the means of production at fire sale prices and hire workers at globally competitive wages. The result will be a more efficient auto industry making cars that people around the world actually want to buy at prices they can afford. Such auto makers could conceivably be profitable and could become the cornerstone of a manufacturing renaissance in the United States. In contrast, Ford, Chrysler and GM are never ending money pits that threaten to swallow a good deal of our economy.”

Why isn’t Peter Schiff our Treasury Secretary?