The public reaction to the Big Three auto bailout has shattered myths we’ve been fed about sticking together in hard times. Today, it seems to be every man for himself, everyone else be damned. It also seems that the fundamental conservatism (small-c) of the U.S. and Canadian governments is a blessing, a protection against the tyranny of democracy.
The auto sector is, as we used to say in Grade 12 German class, upgefucked. Decades of mismanagement, adversarial unions, and artificially-inflated prices, combined with a decline in the real and perceived quality of the Big Three’s product lines, have driven these once formidable companies to near-bankruptcy, dependent on the public dole to survive. In addition to the provisional loans already secured from the U.S., Canadian, and Ontario governments, GM and Chrysler have asked for an additional $19 billion from the U.S. to help with major dealer buyouts, and are negotiating proportional requests from Ontario and Canada. The situation is bad, and will likely worsen before it gets any better. However, the Big Three cannot be allowed to fail. Bankruptcy seems to be an option more costly than public loans.
Although I am no admirer of cars, and certainly have no affection for the Big Three, the cost of human suffering would be far too great to accept. I tend toward the view that recessions are ultimately a natural part of the economic cycle and could potentially benefit consumers and producers. As a recent Toronto Star editorial similarly opined, the cost of bankruptcy in real and perceived terms would be too great, likely triggering the domino-like collapse of an industry that employs hundreds of thousands of workers directly and millions residually. Consider that these “timely” proceedings are rarely timely, and sometimes take years. Add governmmental obligations to secure pensions in Ontario and Canada and the huge burden placed on an already strained public support system in the U.S., and the cost to taxpayers might be much higher than anything the bailout promises.
Yet, due to a combination of selfishness and ignorance, most people would rather accept the collapse than pay their hard-earned dollars in taxes to union welfare mothers. Why must they be punished for the imprudence of others? Why must they support the generous pensions of autoworkers? These companies make awful cars anyway.
One assumes that many of these voices come from the same people that elected Ronald Reagan/”BM the PM” and still consider ketchup a vegetable. They likely named their daughters Margaret in honour of the Iron Lady herself.
Yet they make a few valid points, including that the pension system as it stands will have to be modified, and fast. The Big Three will have to close many dealerships, and would be wise to invest in green production of green products—small cars are the wave of the future. But they cannot do any of these things without governmental help, and they definitely cannot do them in bankruptcy. Our governments understand this, and fortunately are not saddled with the task of bending popular opinion on the matter. So the taxpayers will shoulder the burden, and they’ll bitch about it from now until Reagan rises for the Second Coming. As aristocrats and conservatives have long said, some things are simply too important to be decided by the people.
Normally, I’m a bit of a populist. I’m the only one who thinks it should be 100 per cent constitutional for Vermont (or, dare I say it, Quebec) to leave the Union (Confederation) if that’s what the people want. But the other day my horoscope offered sage advice: you must take the opportunity to learn about the positive qualities of something you disagree with (it was not nearly so grammatically correct as this, but you get the drift).
I’m taking that advice, and appreciating the conservative, slow-moving nature of government, which normally infuriates me. It is precisely because governments can be unresponsive to the will of the people that the Big Three might be saved, and may even emerge better than before. And in times like these, we all need a little help now and again. Union welfare mothers are no exception.
*Totally unrelated, but I couldn’t resist. Apparently, a passport is no longer good enough to change the official name on your record at the University of Toronto. Only at U of T would the document accepted by the Canadian government be deemed “just not good enough.” Maybe our passports were victims of the bell-curve.
