Why Democrats Want Detroit Bailout
So why is it then so important for Obama and the Democratic congressional leaders to prevent this from happening? Charles Krauthammer gives a pretty good description of this in his latest column (The columns contains some nonsense about Republicans being too minimalist, but never mind that). First of all, they want to prevent or at least greatly limit the necessary reductions in wages and various benefits for Detroit auto workers that the United Auto Workers union has imposed. As unions are important donors to the Democrats, Democrats do as they wish.
Secondly, the bailout will almost certainly be linked to some form of demands for a green revolution in Detroit. As Krauthammer puts it:
"Once the government owns Detroit, it can remake it. The euphemism here is “retool” Detroit to make cars for the coming green economy.
Liberals have always wanted the auto companies to produce the kind of cars they insist everyone should drive: small, light, green and cute. Now they will have the power to do it.
In World War II, government had the auto companies turning out tanks. Now they would be made to turn out hybrids. The difference is that, in the middle of a world war, tanks have a buyer. Will hybrids? One of the reasons Detroit is in such difficulty is that consumers have been resisting the smaller, less powerful, less safe cars forced on the industry by fuel-efficiency mandates. Now Detroit would be forced to make even more of them.
If you think we have economic troubles today, consider the effects of nationalizing an industry of this size, but now run by bureaucrats issuing production quotas to fit five-year plans to meet politically mandated fuel-efficiency standards — to lift us to the sunny uplands of the coming green utopia."
Thus, while a bailout will cost taxpayers a lot of money and delay necessary restructuring and adjustments, it will please two key Democratic constituencies: unions and environmentalists.