By Joe Sims
I am amazed that the respondents to Tom Riggins' important question on the opposition of Republican right to the bailout all got it wrong. So wrong in fact that one wonders if there is a baisc missing link in understanding economic fundamentals.
Particularly mystifying are the remarks of Nutmeg Socialist who wrote:
Because the GOP contains no small number of "small-government", "libertarian" conservatives who believe that no federal money should go to anything except building a police state, deporting immigrants, and violating the consitution. They regard corporations asking for bailouts as the upper-crust equivalent of welfare mothers and are quick with all manner of generic castigation about "individual initiative" and "prudence", etc.
Actually, the main issue lies in the proposal for a Chapter 11 bailout, which would result in the getting rid of the UAW contract obligations and the possible demise of the union. Under the guise of getting rid of the board of directors along with labor officials, a new regime of lower wages and stripped benefits would prevail. Pensions might be out the window.
Certainly Rick Wagoner, the chief executive of GM sees it that way as quoted in the Times:
"This idea that you just go into Chapter 11 and hang around for three months and agree to reduce your debt obligations and don't pay your retirees, this is a fantasy ... most people will stop buying the cars of a bankrupt company."
Hey nutmeg what were you thinking?