Journalists have a tendency to present overly-simple explanations of current events that often turn out to be completely false as well. Part of this is due to journalists trying to present a clear, digestible story to readers, and part is due to the fact that most of them have no formal training or particular expertise on the subjects they write about. Case in point is Barry C. Lynn’s latest piece in The American Prospect, which alleges that concentration of the auto…

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The auto bailouts keep expanding. Billions more are going to be spent on wealthy auto-dealers, cash-for-clunkers, politically-correct cars few people will buy, and excessive benefits for autoworkers who are richer than the average American.

The Administration’s cash-for-clunkers program has already run out of money, burning through the $1 billion it was supposed to cost. The program rewards people who bought ancient gas-guzzlers, giving them, and not more environmentally-responsible people, federal tax credits for trading them in to buy new cars. The new…

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Thumbing its nose at the American people, who have opposed a bailout for automakers by a two-to-one margin in public opinion polls, the Bush Administration is pushing a $17.4 billion bailout for automakers General Motors and Chrysler, even though a similar bailout plan was rejected by the Senate earlier this month, on the ground that it would do nothing to fix what ails the auto industry.

Many of the beneficiaries of the bailout are well-to-do special interest groups who have been exploiting American consumers for years but would lose…

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If there’s one provision in the GM/Chrysler bailout that I just don’t get, it’s the suggestion that the automakers must be financially viable by March 31st next year or they will have to repay the loans.

Unless I’m missing something, if you’re not financially viable, repaying $17.4 billion will be just a tad difficult. This will presumably force those automakers into Chapter 11, which is what the bailout was meant to avoid, at least partly to avoid the “ripple effect” that the…

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National Review editor Rich Lowry, who mistakenly supported the financial system bailout because he trusted the Bush Administration, now realizes that he was deceived by Treasury Secretary Hank Paulsen, and that the bailout was sold to the public under false pretenses.

Having promised to use bailout money to buy up troubled assets, the Bush Administration instead used the money for completely different purposes, and now wants to use some of it to bail out an entirely different industry — the automakers.  The…

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A bailout would be worse for the auto industry than automakers filing for bankruptcy, explains banking and bankruptcy expert Todd Zywicki, a law professor, in the Wall Street Journal.   Indeed, by enabling automakers to get rid of expensive union contracts (such as $70 per hour compensation) and red tape,  a “Chapter 11 bankruptcy filing will likely result in a stronger domestic industry.”    “Chapter 11 also provides a mechanism for forcing UAW workers to take further pay cuts, reduce their gold-plated…

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Mickey Kaus, a moderate Democrat, explains how the proposed auto bailout contains little leverage for the proposed “auto czar” to really cut the excessive labor costs that threaten the automakers’ survival, and how it is unlikely that the government will “get its money back,” contrary to what the bailout’s (mostly Democratic) supporters claim.

We earlier noted that auto workers at American-owned plants are paid $70 an hour in compensation, while workers at the U.S. factories owned by foreign car markers get…

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The auto bailout being fashioned by liberal lawmakers with Bush’s apparent acquiescence contains no meaningful limits on the bloated union contracts that have helped make American automakers uncompetitive by giving autoworkers compensation that exceeds $70 per hour, meaning that the billions of dollars spent on the bailout will simply be wasted.

The bailout is similar to the failed British auto bailout of the 1970s, which destroyed whatever chance the British auto industry had left to survive by diverting its focus from producing good cars at low…

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USA Today has an editorial opposing a massive proposed bailout for the automakers. The automakers would be leaner, more efficient, and more able to survive in the long run if they filed for bankruptcy in order to abrogate their absurdly generous union contracts, rather than being bailed out by taxpayers to the tune of tens of billions of dollars. Airlines keep operating all the time after filing for bankruptcy. By contrast, when England bailed out its automakers in the 1970s,…

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