Back in the day, I knew a Nepali guy who ran a whitewater rafting company. My friends and I hired him to take us on a four or five day trek down some raging torrent tumbling out of the Himalayas. It was so long ago I have no recollection of the guy’s name, the name of the river or even the names of most of my friends, but I do remember the time we emerged from some torrid whirlpool, soaked and disoriented, prying our white fingers reluctantly from the ropes that had kept us from being flung into the roiling, boulder-strewn moil. Our raft was nearly sunk, full of water, and just as we were taking it all in the guide shouted “bail out!” I obediently and carefully began climbing out of the raft onto a nearby rock, which sent the guy into a raucous bout of merriment, because he meant to bail the water out of the raft, not to bail out. It was not the most embarrassing moment of my life, but since I had just emerged from a childhood during which pretty much every day was spent being taunted and laughed at by my elder siblings, I was pretty prone to mortification, and thus the moment stuck with me all these years later.
I do hope that the CEOs of GM and Chrysler, whether they bail out or make bail, are experiencing a similar level of discomfiture. Yeah, right. That’s like expecting a wolverine to be ashamed of its rapaciousness. But we can hope. The argument has been made that allowing them to go bankrupt will deprive their workers of their pensions, but those pensions are guaranteed by the US government, so giving the money to GM now or later is in some sense immaterial. Another argument for bailing them out is that somehow bankruptcy will shut all operations down, and then all the suppliers and other businesses that interact with the automakers will be adversely affected, and so they would, if the automakers just sort of evaporated from the face of the planet, but they won’t. Even in bankruptcy they’ll be producing huge, useless, unsafe gas-guzzlers; they’ll just have to do it under the stern watch of the courts. And the UAW will have to change its focus from getting everything they can for their members (no one can fault them for that; its what a union is FOR…) to getting all they can for the next generation of workers as well as this one. Perhaps it’s a necessary form of shock therapy.
An important point that isn’t getting a lot of attention in the press is that there is an ideological line of reasoning concerning whether or not to pump taxpayer money into the auto industry, and then there is a practical one. Ideologically, the free-marketeers say “let ‘em go bankrupt”, whilst the interventionists say “intervene before everyone has to go on welfare; we’d rather give ‘em the money now than later”. Practically speaking, does anyone want the US government running car companies? Methinks not. Not that the US government doesn’t have some really smart, capable and dedicated people in it, its just that their job is regulating industries, not running them, and all the bailout packages that are being discussed involve the government too intimately in the scope of the business. If you want to nationalize the industry: OK. Nationalize it. If you want industry and the government to operate separately, then don’t bail out failed companies. It seems to make sense to me, but what do I know? I’m just a card-carrying member of the peanut gallery.
Can’t say that about the crew assembling around Prez Elect Barack Obama. Wonks ahoy! They’re saying that he’s putting together a valedictorocracy like it’s a bad thing. I’ve never understood people who think it’s a bad idea to have really smart people governing our country. Personally, I feel much safer and happier knowing that someone smarter than I am is making all the hard decisions so I don’t have to. That’s sort of the point, isn’t it? We choose people whom we trust to take on the business of state so that we can spend our valuable time and brain cells on more important things, like, you know; youtube and the upcoming rock-paper-scissors world championship. So if all those PhDs and “elite” smarty-pantses think the auto industry should either bail out or be bailed out, I defer to their greatness. It’s been so long since I’ve felt like I could trust those in charge to work for the common wheal rather than personal gain – somebody pinch me! No, wait, don’t! Let me live in the dream for five more minutes.