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