Thread: Car Industry Bailout! (Or, a result of elected official "genius")

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Provocative point of view Jim, though there are nits to pick. On the plus it's good to get a different perspective from the echo chamber of what passes for journalism today, but I think Ed let some of his own perspective bias get in the way. Claiming the UAW as a "last vestige of unionism" prompts the question; Ever heard of the SEIU? This union group broke away from the AFL/CIO because the umbrella organization wasn't aggressive enough for them. They are the fastest growing union in the country. In part thats because of aggressive recruitment (soon to be helped by the elimination of employees ability to vote for or against union representation by secret ballot, an abomination hidden by the innocuous identifier of "card check") and in part because they represent members of another fast growing group, government employees. Oh boy!

Also the impression is left that the various states he noted for "buying" auto manufacturing plants might have written a check (such as what's being done in DC for the Not So Big 3) to entice the plants. In reality, most of that money is actually in the form of promises to not tax, those amounts being "potential" money to the state. What that means is it's theoretical money. It's money that the state could have collected from those companies if they set up the plant there and paid the prevailing business taxes. Unspoken is that the state would never have realized that income if the plant never was built there anyway. So it isn't that a state handed over a sack full of $168,000 to buy a job, it's that they agreed to not siphon off potential profits worth that amount for the benefit of having an employed citizen who in turn pays sales tax, property tax, excise taxes and so on. Michigan of course has taken the opposite approach and increased taxes on business. Any wonder they have been in a near constant recession even while states like Texas, and South Carolina have been prospering, at least until this year. There's a big difference between a state foregoing mythical tax income versus a federal government printing or borrowing money it doesn't have and may never be able to back up without devaluing future currency.

Still, it's a thought provoking piece.