Monday, December 15, 2008

Honey I Think We Took A Wrong Turn

Greetings Congressman XXXXXXXXX,

Thank you for your letter regarding the current automobile manufacturer crisis. I applaud your fortitude in opposing bailouts or loans and your thoughtfulness in offering a different tack. I am sure that local car dealers are frustrated with having too many unsold vehicles on their lots. This no doubt stems from the credit crunch precipitated by the Democrats’ mismanagement of Fannie Mae/Freddie Mac and somewhat to the high price of many domestic vehicles, which is part of the broader automaker problem. Unfortunately I believe that offering a consumer tax credit to purchase those vehicles is only a short-term band-aid which will not cure the bigger disease in the industry. Additionally, it once again uses the federal tax code for social engineering, something that I loathe.
There is no doubt that cars made by the Big-3 are too expensive. The problem does not stem from corporate jets and bigwig bonuses. One factor is too much intrusive federal (and state) regulation of automobile standards. These ridiculous rules put too much of a burden on the carmakers, thus preventing them from making cars that people actually want to buy and can afford. The standards don’t really save lives or the environment. Secondly, union influence over the automakers’ business practices has become too onerous and too expensive. This has only happened because the federal government has empowered the unions thusly. The total benefit packages for autoworkers are insane and financially unsustainable. There is absolutely no reason for workers to have this much influence over private businesses. And they wouldn’t, save for the Congress- mostly liberal Democrats. Other than egregious safety violations or abusive tactics, workers should have no further say in how a private company runs its business. If they don’t like it, they can find a job elsewhere.
So both of the major reasons for the failure of the automakers falls back in the lap of the federal government. The last thing we need is for the feds to try and fix the situation! The best thing that they could do is to get out of the mess. Strip the unions of their unreasonable power and rescind the insane regulations. Then hands off! Let the automakers go through Chapter 11, reorganize, dump the old union contracts and get about building cars that Americans actually want at prices they can afford and that compete with other manufacturers. This talk about the Big-3 being too big to fail is silliness. We are not talking about failing; we are talking about reorganizing and emerging stronger and more competitive. Many airlines have successfully navigated this process. Maybe the federal government should consider it. When I was taking flying lessons the instructor taught me that when a plane is stalling and going into a spin I had to take my hands off of the controls to let the plane stabilize. That violates all of your natural instincts. But trying to fight the spin is certain death. We need the federal government to do the same thing in this, and many other situations. Unfortunately, the nature of the government and politicians is to always try to do something in every situation. After all, isn’t that what we hired them for? To simply do nothing seems irresponsible, right?
I seriously think that we would all be better off to send the President, Supreme Court, House and Senate home and pay them to sit there and do nothing for two years. For as we learn in medicine, first do no harm. The private market is a great thing when allowed to work unfettered. However, it has not been allowed to work freely in the automobile industry for many, many years. It’s time to get back on the right road.
By the way, I believe that these principles should also be applied to the health care system. Ah, but that’s another topic for another day.
Thanks for your service Congressman!

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