Better World Club

Thursday, October 16, 2008

The Government Gives $25 Billion to the U.S. Auto Industry

You Think That's Bad for Taxpayers?

What Does It Mean for Conservatism?

by Mitch Rofsky, BWC President

The next time I want to sneak something past my wife, I'll ask the US auto industry to help me out.

While all eyes were on Wall Street over the past two weeks, the auto industry walked off with $25 billion in government money. Apparently, automakers are paying double digit interest rates - when they can get credit - and that's preventing them for re-tooling for the next generation of automobiles.

This isn't the first time that American car companies have come knocking at the door of the U.S. Treasury. Back in 1979, the Chrysler Corporation needed government funding to avoid bankruptcy...

And I was working on that legislation as an attorney for Ralph Nader's Public Citizen. Boy, have things changed over the past 30 years. (And I'm not referring to disco.)

Then, the Chrysler bailout was hugely controversial. The legislative process took months. If my memory is correct, we were the only liberal opponents of the bill, joined by a number of conservative/business groups. The bailout narrowly passed the Senate 53-44.

This bailout passed on a voice vote.

This is despite the fact that this bailout was of a completely different scale. Chrysler ended up receiving about $1.2 billion, or about $3.5 billion in current dollars. Today's bailout is $25 billion and is being described by many Michigan legislators as merely the first step. They are looking for as much as $25 billion more.

Back in 1979, the Dems were in control and were determined to help Chrysler--or, more correctly, the United Auto Workers--out. As the loan was going to be approved, we also pushed for a fair deal for the U.S. taxpayer. After all, the government's funding was more of an investment than a loan, so the government deserved an investment rate of return.

That's the next difference, the public had an upside: back in 1979, the government received warrants and actually made $400 million (over $1 billion today). Now, the government is about to give the Big 3 and a number of suppliers a low interest loan which may have no upside return. (Details are not in the legislation and may depend on the rules developed by the Bush Administration.)

And there were other conditions on the Chrysler loan, requiring Chrysler to operate more socially responsibly. Little of that here--although the loan is supposed to be aimed at re-tooling for the next generation of more fuel efficient automobiles. Let's hope the Bush Administration's rules assure that this is the case.

There are better ways to help the auto industry. For one, its health care costs are huge and put it at a competitive disadvantage to many of its overseas competitors. If the industry needs relief, how about its leaders spearheading a fight for universal health insurance?

Apart from the details of how this ''rescue'' is structured, it raises an interesting question in tandem with the Wall Street bailout: what happened to economic conservatism?

Liberals and conservatives divide on a long list of economic issues, but the biggies are commercial regulation, countercyclical efforts to support the market--including deficits, and government activity in the marketplace.

Conservatives generally oppose regulation and deficits, support the market through investment--rather than consumer--incentives, and oppose any government replication of marketplace activities.

But in the past few weeks, Republicans have undermined these traditional positions. Long ago, they let go of balanced budgets. Now, their efforts at deregulation appear hopeless as the current financial crisis establishes the need for sound regulation of the marketplace.

Republican Presidential Candidate John McCain has also announced a massive subsidy for home owners--consumers. Supporting consumers rather than investors is liberal turf. Meanwhile, the government is increasingly active at assuming both lending and insurance roles--as part of a plan devised by a Republican administration.

It's one thing for conservatism to lose an election. It's another thing to lose its reason for being.

In a two party system, the pendulum has to swing back eventually, although, in the U.S. progressive policies virtually never roll all the way back (despite who's in power, we still--fortunately--have the New Deal's programs, Medicare, the Civil Rights Laws, et cetera, et cetera).

Hey, maybe disco will make a comeback as well.

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Thursday, July 31, 2008

THIS ARTICLE IS FOR RESIDENTS OF MASSACHUSETTS ONLY! ALL OTHERS NEED TO SKIP TO ANOTHER STORY (The ‘AAA Watch’ to Your Left, for Example)

Okay, Are They Gone? Good! Check It Out:

BWC Members from MA are Eligible for a 13% Discount on Auto Insurance!

(Members From Other States Get Insurance Discounts, Too)
Better World Club has long offered an 8% discount on auto insurance premiums to its members living in Massachusetts. Well, we’ve pulled a few strings - we’ve got a cousin who can get us wholesale prices - and are now able to offer a whopping 13% discount!

American Consumer Insurance, our Massachusetts insurance office, not only offers auto policies at a 13% discount, but also boasts top-rated customer service. It’s been voted the best insurance agency in Cambridge three years in a row, and has won first or second place for the last three years straight in the Boston Metro area.

Not only do we offer great service, but Better World Insurance will offset your car's first ton of greenhouse gas emissions free! This offer is good in all the states we service, not just MA.

Recently relaxed insurance regulations in MA make it a great time to shop around for insurance. If you’re a BWC member living in Massachusetts, the best way to get a quote is to call 888-299-2993. For the most accurate quote, you should email (AmConsumer@aol.com) or fax (617-876-5302) your coverage selections page from your current insurance provider before calling.

Want a multi-policy discount? Grab your homeowners, renters, or condo policy and get a quote for that, too! We have access to 7 different underwriters, so we’re dialed in to all different kinds of rates.

If you're not from Massachusetts and you've read the article this far, we salute you. You're either too stubborn to be told what to do, or you're so bored that you're reading articles about insurance discounts you're not eligible to receive. Either way, we like your style, and you deserve to be rewarded. You may be eligible for one of our other auto insurance discounts. Click here to get a quote and find out.

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