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The Akron Beacon Journal's favorite conservative writer, Charles Krauthammer, rubbed me the wrong way when he bloviated up this horsepucky in my Sunday edition....
The Bush administration sees the $700 billion rescue as an emergency measure to save the financial sector on the grounds that finance is a utility. No government would let the electric companies go under and leave the country without power. By the same token, government must save the financial sector lest credit dry up and strangle the rest of the economy.
Krauthammer provides no support for his assertion that "finance is a utility." But when a wingnut writer, like Charles, starts out with a pre-conceived notion, assertions are essential. So, let's examine Krauthammer's "utility" assertion.
According to the dictionary, the word utility means "the state of being useful, a useful thing, a public service, the capacity of a commodity or a service to satisfy some human want." No question here....cash can be a "useful thing" "to satisfy some human want",.....but "a public service?" No way. Banks and financial institutions, before September, were not public service businesses. They were, obviously, privately held, for profit, independent businesses allegedly conforming, as all companies do, to governmental regulations.
Krauthammer's claim of finance being a "utility" doesn't wash.....but wingnut writers have a purpose in asserting their own pre-conceived ideas. And here is the purpose for the Washington Post writer's half baked assertion......
With almost 5 million workers supported by the auto industry, Democrats are pressing for a federal rescue. But the problems are obvious.
First, the arbitrariness. Where do you stop? Once you've gone beyond the financial sector, every struggling industry will make a claim on the federal treasury. What are the grounds for saying yes or no?
Why is the financial sector Krauthammer's line in the sand for federal bailout dollars? Why is the money and paper shuffling industry of finance the "once" the government can't go "beyond"? Simply because Charles says so in his assertion that "finance is a utility". See why he needed to make this unsubstantiated claim? The entire point of his column depended on it. His point of troubled American automakers being left out of any governmental bailout. Let 'em go bankrupt, Krauthammers says....
Saving Detroit means saving it from bankruptcy. As we have seen with the airlines, bankruptcy can allow operations to continue while helping shed fatally unsupportable obligations.
For Detroit, this means release from ruinous wage deals with their astronomical benefits
Finally, the wingnut writer lays out his ideology. Krauthammer despises unions. Most voodoo-economics loving conservatives do. Not many union workers on Wall Street, so the financial sector, Krauthammer slyly claims, is a "utility" deserving of unique treatment. But automaking union workers? All they do is demand "ruinous wages" and "astronomical benefits". Apparently, Wall Street 'golden parachutes' and bonuses are not considered to be astronomical because those deserving folks operate in a, you know, "utility" atmosphere. Those must have been "utility" spa junket seminars I read about.
As far as bankruptcy/reorganization for the automakers and/or labor concessions go......this 'The New Republic' writer makes Krauthammer, the hack, look like...well....the hack that he is....
In order to seek so-called Chapter 11 status, a distressed company must find some way to operate while the bankruptcy court keeps creditors at bay. But GM can't build cars without parts, and it can't get parts without credit. Chapter 11 companies typically get that sort of credit from something called Debtor-in-Possession (DIP) loans. But the same Wall Street meltdown that has dragged down the economy and GM sales has also dried up the DIP money GM would need to operate.
Ford led the way years ago by reaching site-specific "competitive operating agreements" with locals at different plants, rather than sticking to one national agreement, thereby enabling it to loosen work rules and engage in the sort of collaborative quality management on which industry leader Toyota made its reputation. Then, last year, the UAW reached a breakthrough agreement in which it granted the companies similar flexibility, agreed to a two-tier wage structure for new hires, and set up a separate trust fund to finance future retiree health benefits. Link
I don't know how this will all pan out. In the short term, conservative whackjobs in Congress, represented by the wingnut columnist Charles Krauthammer, will block and/or veto any help for American automakers....after all, American automakers are lousy with unionized workers. In the long term, a President Obama, with a larger Congressional majority, will not allow conservative, "finance is a utility", whackjobs to have their way.
Elections have consequences....Charles. You just can't make sh*t up and not have your face rubbed in it anymore.