The Problem Is Entitlement
Posted by Janus on Thursday, November 20, 2008 in Fiscal Policy
Warning: The following could be considered a rant. Those of you who read this blog for the dry, thoughtful, “just the facts” tone of my posts may want to look away.
I try not to take sides in the ongoing debate between labor and management. I do this for a number of reasons, but the big one is this: I don’t like to see people getting screwed over. If unions are bleeding a company dry, they’re the problem, not the solution. If management isn’t paying a living wage, then I support the union struggle. Granted, I’m pro-business and I’ve personally had to face off against strikers when I was working security, but I’m not ideologically opposed to people getting what they deserve. There’s give and take and people deserve their fair share as long as there’s enough shares to go around.
My problem with the auto bail out (on top of my problems with bail outs in general) is that the companies are not financially viable – and they’re not viable for a reason. Everyone who has anything to do with them has a sense of entitlement. The news is making a big hubbub over the CEOs using private jets to get to Washington. The CEOs barely batted an eye when congress asked them why. The simple truth of the matter is, they feel like they deserve it. GM’s CEO was given over $15 million dollars in compensation in 2007, when the company lost $2.7 billion. Their vice chairman made over $9 million.
The United Auto Worker’s Union is no better. Last year, after a brief strike, GM was forced to sign a four year contact to pay $30 billion in health care costs to retired union workers for unrelated illnesses, hire an additional 3,000 workers, and maintain production levels at 16 plants regardless of what market forces dictate. GM’s employee benefits fund is currently estimated at $170 billion, and the company is reduced to going to Capital Hill and begging congress for a loan.
And if that weren’t enough, the big three are still not producing cars that people can actually get excited about. They don’t have a Prius. They don’t have a Scion tC. They don’t have a Civic. What they do have is gas guzzling SUVs and those killer 10-wheeled 2 ton trucks that wouldn’t see off road driving if their owner’s lives depended on it.
You can’t point a finger at any one part of these companies and say, “well, there’s your problem.” The problem is an arrogant sense of self-entitlement. The CEOs run these companies like government institutions. They completely ignore the fact that they’re part of a competitive market and just do whatever the hell they want to, regardless of cost or options. The UAW keeps drinking like well will never run dry. And congress, God help us, is going along with it.
Run away unions plus insolvent companies plus government bail outs equals communism. The government, if it decides to throw more money at the problem, is literally taking money from the tax payers and giving it to people who are over paid to do a job that doesn’t need to be done at a company that shouldn’t be in business in the first place.
If the government wants to get involved, here’s what I think they should do: Buy a piece of the big three. Not stock. Not loans. Actual factories. Retool them to be of value to society, fire off all the spoiled brats that work there, and sell them to an enterprising widget manufacturer. The auto manufacturers get their money, the unions get their comeuppance, and we don’t have to deal with incompetent management again. The government, I’m sure, will waste a ridiculous amount of money on the transaction, but at least we’d be done with it.
If we just give them more money, we’ll be right back to where we started. In a year, maybe two, maybe five, they’ll be back again, asking for another bail out. If we’re going to bring pain upon ourselves, we might as well make it a pain that doesn’t come back.