The GM Funeral March

They’re yelling “look out below!” again on Wall Street after the auto bailout bill was strangled in negotiations. And somehow, it doesn’t surprise me in the slightest that it was UAW intransigence — an unwillingness to accede to a timetable for commensurate wage and benefit cuts that would be demanded in a bankruptcy proceeding anyway — that killed a bipartisan compromise measure. Unions have a history of being mind-blowingly short-sighted, often refusing to give up its bargaining position even in the face of corporate oblivion, as if their wages and benefits come not from business’ wealth-creation but from some unseen pool of mana. Said proposal was being negotiated all through the evening by surprisingly competent Sen. Bob Corker (R-TN), a man previously best known for running the borderline racist ad campaign against Rep. Harold Ford to win his current seat. This was a plan that split the difference between Chapter 11 and an outright bailout and was actually something that didn’t physically repulse me, which is of course why it failed. This feeds into lefty hysteria (from the likes of Rachel Maddow, who is usually more level-headed than this) about class warfare and union-busting through what we choose to rescue, when the answer is less conspiratorial than that — it’s just all-around incompetence. Maybe Dubya will cut them a TARP loan (what a wonderfully inaccurate acronym) to stem the carnage, but I hope he doesn’t. We should start doing what should have been done with the financial sector: Get out of the way and let them fail. It would have been very ugly if AIG, Citigroup, and Merrill Lynch (to name a few) had been liquidated — as in Dow around 4000 ugly — but we would be in far better shape in the long run and never would have established the gruesome precedent of zombie capitalism. This is not what the public sector is here for; capitalism (and more precisely, moral hazard) dies when firms cannot. We cannot socialize corporate losses any further.