On that GM bailout and the $10 billion loss to taxpayers:
‘The administration gave the UAW billions more than bankruptcy law calls for. Typically, bankruptcy reduces union compensation packages to competitive rates. However, GM’s existing union members made few concessions on pay. As the UAW put it, the contract meant “no loss in your base hourly pay, no reduction in your health care, and no reduction in pensions.’
So, what’s the strategy for American growth and prosperity here in the face of manufacturing decline?
I mean, just look at Detroit.
Over five years ago, when GM stock was selling at $2 a share and the debt-holders had been wiped out, this blog put up the video below. Here’s a brief 2:00 min explanation by Bill Ackman of Pershing Square on why the GM bailout was likely a bad idea.
Politicians reward their friends:
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David Harsanyi at Reason wrote more here. Non-union employees pensions got raided and taxpayers foot the bill, so that Obama and the UAW can maintain power. Cronyism on the taxpayer dime at its finest.
How did Detroit get here? Very comprehensive and easy to navigate.
More from Megan McArdle on the behavior that comes with pension bonuses.
Walter Russell Mead takes a look at the blue model (the old progressive model) from the ground up in NYC to argue that it’s simply not working. Check out his series at The American Interest
Being a “generational-GM-over-indulged-self-entitled-hamster-member”…who is collecting pension & GOOD benefits, I hope I don’t get too many riled up by sharing this on facebook. haha.
Hey…it’s all they know. And, even after failure, pain & obvious abandonment for cheap unregulated countries….they’re still brainwashed by them & the union (UAW) who they’re blind to. Easy to understand how & why. Their livelihood…that’s what happens. Besides, organizations that big are as good as it gets at making over pay & over benefits twist the mind into looking the other way from padding pockets, coverups & the bigger picture. And when its generational, its all they know. They literally don’t know how else to survive. They didn’t go to college…you go right in the factory. I suppose its like any other monopolized situation. Like iron/steel workers, coal miners, fishing/shrimping in the gulf.
I get some angry results. But I’m a firm die-hard believer in → “TRUTH IS WHAT WORKS”.
Thanks for your posts! 😀
Sincerely,
Dawn
~Outside of good food & fishing…your blog is one I sincerely look forward to!
Dawn,
You’ve said it better than I could. Once your livelihood, your paycheck and your identity and all your skills and habits line up with one way of life, it’s what you know, especially as you get older and you’re less marketable.
Unions worth their salt know just how to exploit that to their advantage and keep up the us vs management mentality.
Change happens, and here we are. That’s what America has been so good at, positioning ourselves to move with it.
But that means a big fight in our politics and the public square in this time of more rapid change for just how our organizations and institutions are going to look, and who’s going to to be running them according to which ideas.
***Thanks very much for the last part of your comment, by the way. It means a lot.