Why the Automobile Bailout Will Fail
It's the Unions Stupid!

The Manumitter Daily
WATCHMA N

Why the bailout of the auto companies will fail.... it's the unions stupid.
Imagine there is a pizza restaurant on the corner street and the workers there have unionized. As a result - the waitresses make $25 per hour, the cooks make $30 per hour and the host makes $40 per hour. How much do you think a pizza would sell for? Using the same ingredients to make pizza as another restaurant - a restaurant that is not unionized - a pizza would probably cost much more to buy. As a result - in order to compete in the market - the unionized pizza restaurant would probably use cheaper quality ingredients and make less quality of pizza. However- what if the restaurant was losing money - because of their poor quality pizzas and high prices? What if it was going out of business? In order to save the restaurant - what if the federal government stepped in and gave the restaurant a million dollar loan? Do you really think that would make that restaurant more competitive with pizza restaurants that were not unionized? Do you think it would work or just prolong the failure? I will tell you- it will just prolong the failure - because the structure of the business has not changed. The restaurant would still be paying its workers far more than businesses selling the same product.

However- what if the government after giving the restaurant a loan then decided it was going to dictate to the restaurant how it would run its operations? Do you think the government knows how to make pizzas? What if the government fired the manager and decided that the restaurant was going to start selling only healthy pizzas and food (cutting out calzones and garlic bread). The government was going to remove items that made the restaurant money - because they were not healthy - but still going to pay the high unionized wages to employees. Do you really think that is a successful strategy to keep the restaurant in business? Sounds pretty stupid doesn't it? However that is exactly what is happening with the auto bailout.

U.S. auto companies are unionized and the workers are being paid much more than their competitors to do similar jobs. The federal government is granting billions in dollars in loans to the auto companies - has fired a CEO and then is dictating that they are going to start making environmentally friendly cars and stop selling gas guzzling vehicles that make the company money...

This is anti-capitalist, liberal, social, democrat government at its finest.... and the taxpayer is going to pay for it!

Written by Thomas George
Editor@the-manumitter.com/

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