Companies are lining up left and right for a government bailout. As we’ve discussed, the government is unlikely to give bailout money without getting something in return. The Democrats, however, are less interested in helping industries recover than they are in controlling them. Barney Frank is again talking eagerly about a major increase in government regulations.
That is why with the Big Three asking for a bailout, Republicans should demand something in return that will actually be good for both the industry and the economy. Hugh Hewitt suggests slashing the corporate tax rates of those companies to the levels of Ireland.
Congress should offer them money in a deal where the government would agree to provide those lower tax rates and those state legislatures would make the states right-to-work states. The additional step would go a long way in helping the auto industry find sustainable solutions.
Unfortunately, Democrats aren’t going to do that. The Democrats are going to give the Big Three a bailout, which is a bailout for the unions. The most simple explanation of why is because the Democrats have to. Unions helped Democrats get elected in key states, and with the hard left environmentalists assuming more power, those union workers in heavy manufacturing states are going to face damaging environmental standards.
It’s sad to watch corporate executives come before Congress in a dog and pony show, begging for money. This is a bad example of capitalism, and Democrats like Barney Frank and Chris Dodd are loving it, because they know they hold all the cards, and they’re only going to get more control.
UPDATE: Larry Kudlow suggests supply-side tax cuts across the board. Maybe the GOP could add that to their list of demands.
UPDATE 2: The CAFE fuel standards money may be converted for a short-term deal with the auto makers. The Democrats are considering their demands for the bailout. It looks like Rush wasn’t so far off:
Many Democrats oppose tapping the fuel-efficiency loans out of concern the industry would backtrack on its environmental commitments. Mrs. Pelosi and other Democrats are pushing Mr. Bush to give the auto makers access to the $700 billion pool created to aid financial-industry companies. Mr. Bush and many Republicans oppose the idea. Several other ideas, such as forcing banks benefiting from the federal rescue funds to lend to the auto makers, have also been floated. [italics added]
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