A common refrain on editorial pages this past week has been that free-market “zealots” have been the losers in the federal interventions of AIG, Fannie Mae, Freddie Mac, and whoever is next.
That’s true, but certainly not because the free market has failed. I’m stunned and saddened that we have gone so far to show that, under certain circumstances, we are perfectly willing to abandon any pretense of capitalism.
Sen. Jim Bunning was right when he said “when I picked up my newspaper yesterday, I thought I woke up in France. But no, it turns out socialism is alive and well in America.”
Said the CJ:
“In a sense, we’re all Ford families around here, given the firm’s 6,000 local employees and its $300 million metropolitan region payroll. We have special reason to look favorably at a sensibly hedged bet on American automakers’ future.”
As much as I appreciate the irony in seeing yet another bailout referred to as a “sensibly hedged bet,” the unsettling part of this Orwellian verbiage is that it ignores the trainwreck we are setting up by combining our sudden disdain for all things laissez-faire with our long-term willful blindness to the growing crisis in unfunded employee benefits.
We shouldn’t have to remind most people that the labor costs tied up in domestic automobiles have wrecked Detroit’s competitiveness for a generation, but the CJ is hoping you didn’t get the memo:
“It’s true that Detroit has brought on many of its own problems. It was slow to move toward the kinds of vehicles that America needs, but that’s partly because consumers were slow to demand them. Now it faces higher materials costs and gasoline prices, an economic slowdown and a fierce credit crunch.”
Failing to build cars that run on corn is not what caused Detroit’s problems. It’s the loss of financial flexibility the firms bought themselves by promising retiree benefits they couldn’t afford to deliver and stay competitive in a global marketplace.
Bailing them out is just delaying the inevitable at taxpayer expense.