Democrats for the rich

Barack Obama is against giving tax breaks to those earning six digits, but he supports giving billions in bailouts to corporations bringing in 12 digits.

While it’s true that George W. Bush and John McCain wrongly supported the financial bailout, Obama’s plan to extend the bailout to automakers is a wasteful expansion.

The purpose of the bailout was to get the entire economy turned around, not reward a few powerful industries. With their lobbying clout, however, the automakers will get bailed out when Obama takes office.

Herein lies one of the problems of the original bailout: If you give one thing to one interest group, you must give it to everyone. Bush said on March 14 that he was against any massive government intervention.  

Then in September, guess what – $700 billion for banks!

A.I.G. – “We know money” – mishandled their money so badly that the feds had to increase their share of the bailout by $40 billion in early November. A.I.G. has now received $150 billion from the bailout.

To his credit, Bush has stood firm on the automaker controversy, declining calls to expand the bailout for them.

After giving away $700 billion to the banks, $25 billion isn’t much, but that just means that the government will have to give them more in the future. It certainly isn’t enough to turn General Motors Corp. around. Its problems started long before the current financial crisis.

Its net income dropped from $4.4 billion in 2000 to $2.8 billion in 2004 to a loss of $38.7 billion last year.

Their problems are a combination of union burden and not reacting to the marketplace.

For example, GM’s sport utility vehicle sales dropped by 27 percent the first quarter of this year, contributing to a 16 percent total decline in sales. Toyota’s total sales increased by three percent because of its focus on fuel-efficient cars.

If GM wasn’t able to see that trend coming, perhaps it shouldn’t be in business.  

If you don’t produce products people want, why are you here? Bailing out GM would simply be giving it money to produce vehicles that the consumers may or may not want for an indefinite period of time. If we the consumers like what the company produces, we would be keeping them in business, instead of the government holding their hand.

Instead, GM execs warns the government they might have to file for bankruptcy this year and have big grins on their faces as they do so.

If GM does go bankrupt, they warn, its workers, with their $27 per hour union salary and benefits that add $1,600 to the price of each car, will become unemployed.

Sure, but Toyota, Misubishi and Hyundai would love to expand to fill the crater left by GM. There are three companies that know how to do business.

Sixty percent of foreign automakers’ parts are already made in America, and the market is ripe for expansion.

We don’t need economic jingoism to keep failed companies producing failed products.