On the Futility of Bailouts, Part Deux
Robert Reich has a question:
"[GM's labor problem is] an almost impossible dilemma," said former labor secretary Robert B. Reich, now a professor at the University of California-Berkeley. "GM is a global company -- so for that matter is AIG and the biggest Wall Street banks. That means that bailing them out doesn't necessarily redound to the benefit of the U.S. or American workers.
I love how all these super duper smart former government people never bother to ask the question until they are former government people. When they are in government, they insist on bringing home every mangy kitten they find because, good golly, if these companies go out of business well that would be bad. And so without considering any possible adverse consequences, they spend all manner of taxpayer money to allow the company to keep doing the kinds of things that got it in trouble in the first place.
"While paying a U.S. autoworker with benefits costs about $54 an hour, a South Korean worker earns about $22 an hour, a Mexican worker earns less than $10 an hour and some Chinese workers can earn as little as $3 an hour, industry sources said. "
If US autoworkers demand more than $100,000 a year to do the same job a Mexican will do for a fifth of that, then they will lose those jobs, sooner or later, because the consumers have neither the responsibility nor the desire to support that wage differential(1). You want to keep jobs here? Immediately halve the salary of US auto workers. They'll still be making more than the average accountant, and for a job that's a lot easier.
But be that as it may, Reich has finally stumbled onto the truth: there is almost no such thing as a national company anymore, at least not a company of any size. That means that any bailout coming from the government is guaranteed to hurt the people under that specific government without any guarantee that they will receive any benefit from it at all.
Then again, I suspect the people who are supposed to benefit are those who run the bailouts and their friends, anyway.
(1) Which is precisely why, in addition to being economically stupid, it's morally wrong to use tax dollars to "save" them. What the government is saying is that since you won't voluntarily pay that extra money for a car, we are going to take your money and give it to the carmaker anyway. Oh, and not give you a car.