And that just about sums up what's going on in Washington regarding not just the auto bailout which failed to pass last night, but also the $700 billion bailout from a few months ago.  What amazes me is how the "story behind the problems" simplifies itself so quickly.

The $700 billion bailout quickly boiled down to greedy Wallstreet types vs. greedy homeowners who couldn't afford mortgages.  The auto bailout is quickly boiling down to greedy unions vs. greedy executives.  Michael Mathias is horrified by the gall that legislatures have, demanding that union workers take a pay cut when legislatures themselves get paid very generously and get great benefits.  For the record, I completely agree, but I believe the solution is to cut the pay of all legislatures, cut their health benefits so they no longer get "Cadillac benefits" and give them no pension at all.  "Politician" should not be a career in this country.

Jay writes today about how horrible Republicans are because they blocked the auto bailout to do some union busting.  After all, he goes on to explain, the difference in wages only account for about $800 per car, and GM cars often are sold cheaper than foreign ones anyway.  Not only that, but the auto bailout is a mere fraction of the financial industry bailout, and that one got approved.  Well, first of all, saying we need to pass this bailout because we passed an earlier bailout is a strawman, because most people who fought this bailout also fought the last one, including me... strenuously.

Secondly, $800 still means a lot to people, and so lowering price could very well help, especially in this economy.  But the problem is that it's not just the raw price of the vehicle that makes a difference... its the value you get for your dollar.  The quality of car, along with resale value, of foreign cars has been higher for a long time.  That means that employees for foreign companies are working harder, and/or doing a better quality job, for every dollar... which acts as a multiplier on that price difference.  Through perverse UAW rules, workers often have a disensentive to do a better job, or they refuse to use more efficient and reliable techniques to perform certain tasks because it might costs fellow employees a job.  That makes a difference well beyond $800 a car.

Now then, to their credit in recent years, the Big 2.5 have made significant gains on quality such that they are nearly on par with their foreign competitors in many ways, but the value of the work dollar is still a problem.  However, Jay is right in that the UAW is not the only problem here.  For instance, there is the dealer network throughout the country which also is a dead weight on these companies, and provides its own set of problems, that are often times encouraged through local state regulations.  There are other agreements as well that cause problems too.  This is not just a UAW problem.

But then Jay goes into some really funky territory, and talks extensively about a post I made a few days ago regarding corruption in government.  As a quick aside, the comment thread on that post has taken on quite a life of its own, so you might want to revisit it if you haven't in a while.  As Jay explains, workers need unions because not only can corruption occur in government, but it can also occur in corporations.  And how dare we try to break the right of workers to collectively bargain and get what they deserve from the evil corporations!  After all, CEO pay has skyrocketed!  The loley auto workers are only trying to get their fair share!

And so you see, we are back to the classic battle of the evil CEO and the poor worker I mentioned earlier.  Now then, I could try to explain how labor unions devalue individual work, and create disincentives for improvement.  And I would have a hard time arguing that CEO's often times are corrupt and in times like this, should take a pay cut for the good of their company.  I could also bring up that the UAW is somewhat unique in that it allows retired workers to still vote, which often times skews benefits away from the good of the company, to the good of retirees at the cost of company health.  But in the end, none of that matters.

Perhaps both the UAW and the CEO's of those companies were cutting off their noses to spite their faces.  Why do I, the taxpayer, have any responsibility to come in and rescue them?  Because as soon as you talk about a taxpayer bailout Jay, it's no longer the UAW demanding their fair share from the corporation and the stockholders... no... now they are demanding a share from me... the taxpayer!  That's a big difference.  When I talk about corruption in government, I do so with the knowledge that when they come to tax me, or enforce a law, they do so at the point of a gun.  I cannot refuse to pay my taxes, nor can I resist the police if they believe I broke a law, no matter how insane and contrived that law is.  If I do those things, I'm potentially dead.

If the unions demand something from the company, and they get it, and the company is still able to be profitable... good for them.  But if they demand too much, and/or the company is also poorly run, then the company should either go away, or go under restructuring.  That is how capitalism and markets work.  If I think you make a poor product or it's overvalued, then I don't buy it.  While I may not be able to refuse to pay my taxes, I can refuse to buy a car made by an American company.  This bailout says that I have no choice... either I buy your car, or you take my tax money.  The UAW is saying they have a right to work for that specific company, and the company is saying it has a right to exist.  I say neither right exists.

And then of course Jay goes on to talk about the Employee Free Choice Act... otherwise known as Card Check.  Essentially what this does, is to "simplify" the process of forming a union in a company by bypassing a secret ballot vote, and simply allowing the majority of employees to sign their time card.  Those time cards of course are freely viewable by all employees, managers, and those wishing to form the union.  By removing these secret ballots, it allows extreme pressure to brought to bear on employees who don't sign, but also allows retaliation against those who do (if the overall measure fails).

And so you see... it all boils down to choice.  People chose to buy foreign cars (for whatever reason), and now Jay wants to make sure I have no choice but to bail out a company.