Much has been made of Mitt Romney's call to let the auto industry go bankrupt. At the recent debates he has tried to twist that into saying that he was calling for loan guarantees rather than a bailout. Politely, that is a bald-faced lie. Even if it were true, it completely disregards the fact that the credit market was completely dry and there is no indication that guarantees would have loosened up credit for Chrysler and GM (look at what happened to housing for relevant evidence).
But all of this misses the greater point of stupidity in Mr. Romney's screed where he called upon the slashing of labor payrolls and stealing already earned benefits, but failed to even acknowledge out-of-control executive pay:
First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.
It is incredible to me that someone who considers himself a financial genius does not understand that the $2000 burden per car that he refers to is a result of the fact that the United States lacks a universal health care program like Japan and Germany, and that the U.S. retirement system pales in comparison to its German and Japanese counterparts.
It is the failure of our country to fully utilize the economy of scale under some 1950's premise of the Red Scare that leads to these runaway costs for businesses. And why not? When companies can hold a benefit for their employees that can be wiped away and stolen from the people who have dedicated their lives to these companies exactly as Mr. Romney would have them, then why would you make the investment? And in the end, who ends up picking up the tab anyway? John Q. Public, out of funds that are capped as a tax on 100% of the average American's income but only a percent or two of Mr. Romney's.
Mr. Romney consistently espouses expanding the policies that directly led to the problems that the nation is facing. So is he truly an idiot, or is it just about what's in it for him?
