Enough with the bailouts

Here they come, wrists lined by starched white cuffs replete with gleaming links. The palm of one hand is open and the other clutches a tin cup absent the jingle of loose change. Pity the poor carmakers and their workers. Lend them your ears: hear their plight. OK, forget the ears and fork over the $50 billion, and make it snappy.

Like steel manufacturers, that other former symbol of American economic greatness, the automobile industry has been reduced to junkyard status, a rusty heap sitting among sprouting weeds. For years, the Big Three have been driven hard, with government pressing the accelerator to the floor on regulations and unions grinding the gears on escalating wages running near double that of competitors in the opposite hemisphere. Now smoke billows from beneath the hood and the beggars approach.

Here’s what they want: $25 billion for General Motors, Ford and Chrysler. This amount has been approved under the $700 billion federal bailout passed in September. But that money must be used for the production of fuel-efficient cars and isn’t immediately accessible. So Sen. Debbie Stabenow, D-Mich., has requested on her constituents’ behalf another $25 billion absent conditions. President-elect Obama supports this, sort of, preferring that President Bush sign off on the move now and thus stick his own neck in the political guillotine. After all, Bush’s head already has tumbled into the basket.

But there are rubs, and they are many. Neither $25 billion nor twice that can be expected to prod consumers to buy cars from the Big Three, something they have been increasingly loathe to do, precipitating a crisis barreling toward bankruptcy. And what of labor costs? Here, the plot thins.

University of Michigan economic professor Mark J. Perry has gone to the trouble of doing the math and found that the Big Three’s average hourly compensation per United Auto Workers employee in the last fiscal year was $73.20. That was 52.5 percent higher than the $48 shelled out by Toyota. Roughly two-thirds of the costs for UAW workers were consumed by extras, including what Perry describes as “gold-plated medical benefits that virtually no one else had.”

Notably, as Big Three company officials and union bosses arrived in Washington seeking taxpayer-funded salvation, they brought nothing – like, say, concessions — in exchange. They might have worn signs that said: “Will work for same exorbitant amounts.” What guarantees do taxpayers have that the mendicants won’t gulp down the swill of taxpayer bailout money and come back begging for more? Precisely none, unless the Beltway gang – rarely intrigued by the notion of accountability – demands it. Polar icecaps now in full melt and hell will freeze first.

It is likely that John McCain lost his best chance to snare the presidency from Obama’s grip when he jumped aboard the bailout bandwagon rather than scream, “Stop!” Obama could do Americans a favor by issuing the same declarative now.

He also could direct the Federal Reserve to identify recipients of bailout money, backing the promise of transparency issued by Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson. The Fed so far has remained mum about who is getting taxpayer help, prompting Bloomberg News to file a federal lawsuit to force disclosure.

The bailout train is careening off the tracks, smashing through the rights and interests of American taxpayers and a once-great nation’s way of life. From the rooftops, we yell, “Enough!” To Congress we say, tell Detroit no and tell the Feds to do what they had declared they would, open the books and inform the people where their money is going. Give the people the satisfaction of at least knowing the identities of their plunderers while waiting for the raids to cease.