Where you listening to the creaking door opening of Communism the other day?
Nationalize All Industries
Our President said, “When the American industry was on the brink of collapse, more than one million jobs at stake, Governor Romney said, let’s let Detroit go bankrupt. I said, I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back and GM is number one again. So now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry, I don’t want those jobs taking root in places like China.”
Nationalizing entire industries worked very poorly under dictatorships and communist centralized economies. In fact, they were so dysfunctional, despite grandiose economic five-year plans designed by the communist party apparatchiks who had no idea how to run a lemonade stand, they have all collapsed since 1989, with the exception of Cuba and North Korea, and we know how “well-off” their citizens are and how much individual freedom they have. Communist China had to modify its centralized economic control and adopt successful capitalist models. Managed economies are not the solution, capitalism and entrepreneurship are.
GM and Chrysler Fiat’s roaring sales are due to subsidized sales, indirect funding by the government
President Obama’s auto bailout cost taxpayers $60,000 per job saved. GM and Chrysler Fiat’s roaring sales are due to subsidized sales, indirect funding by the government, “sub-prime auto loans to inflate their car sales, selling automobiles to people who cannot afford them.” (Michael Savage, Savage Nation, August 9, 2012)
Taxpayers lost $20 to $23 billion in the auto bailout. The Obama Administration redistributed $26.5 more to the union than UAW would have received legally in the bankruptcy proceedings had the rule of law and contract been followed. “Thus the entire loss to the taxpayers from the auto bailout comes from the funds diverted to the UAW.” (Amy Payne, Heritage Foundation, June 13, 2012)
Mismanagement and high union labor costs contributed heavily to the bankruptcies
Mismanagement and high union labor costs, $70.51per hour in wages and benefits for GM and $75.86 per hour for Chrysler, contributed heavily to the bankruptcies that necessitated the bailout in the first place.
Secured creditors and investors should have had prior claim, in accordance with the law. Unsecured creditors should have received proportional payouts from the bankruptcy. A special trust fund protected UAW, while other creditors received fractions of what they were owed. UAW received billions and partial ownership, and Fiat, a foreign corporation, received part-ownership of Chrysler. UAW workers continued to receive huge compensations when compared to the much lower compensation of $47 per hour for Nissan and Toyota workers. Stephen Rattner, President Obama’s car czar said, “We should have asked UAW to do a bit more. We did not ask any UAW member to take a cut in their pay.”
According to Amy Payne, the auto bailout was not a bailout of GM and Chrysler but a bailout of the auto union by American taxpayers who make on the average $30 per hour in wages and benefits. (Auto Bailout Was Really Just a UAW Bailout, Heritage Foundation, June 13, 2012)
GM did not just become Government Motors, it became China Motors
The issue is more complex. GM did not just become Government Motors, it became China Motors. After $80 billion of taxpayers’ dollars “saved” GM and Chrysler, GM opened a plant in Wuling, China. Research and development for car design was moved to China. Dan Akerson, CEO of GM said in Shanghai, China, in February 2011:
I wonder how millions of unemployed Americans feel about their bailout money that is now invested in China with SAIC, the Shanghai Automotive Industry Corporation which is run by the communist government of China who owns and controls most of the manufacturing and with the FAW, another Chinese government owned manufacturer. If Americans truly own GM, should the cars, jobs, and investments not be made in the United States? Why build China from the ground up while our American economy and infrastructure crumbles and turns to “has been” and dust?
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