Saturday, December 6, 2008

Bailout Politics

One thing I've been wondering about is why the automaker bailout is treated so differently by our elected representatives. I have particularly the Republicans in mind... my impression is that the reason Democrats like Nancy Pelosi talk about this differently (e.g. the automakers need a plan... did she ever ask the banks for a plan?) is she knows she's not going to be able to push this through. Part of the answer is that there was opposition to the original Paulson Plan. Still, opposition from Republicans has been really extremely hard, and the passage of the bank bailout means it can't be all to do with ree-market ideology. Matthew Yglesias makes a point about the rest.He points to Mitch McConnell's comments that we still have a foreign owned auto industry and concludes
[I]t’s pretty aggravating to see these Dixie conservatives who obviously have a parochial stake in letting the Michigan-based firms die off popping up all across the media without the coverage even reflecting that fact. Whenever you see Carl Levin or Debbie Stabenow on television or quoted in the papers, it’s made clear that their views aren’t just stuff they thought up one afternoon — they’re trying to represent the interests of their constituents. But people need to understand that Bob Corker and Richard Shelby and Mitch McConnell all have equal and opposite parochial interests pushed in the other direction — if Detroit folds, then that’s way more market share for Japanese-owned, non-union factories in their home states.

I suspect this makes the difference between the bank bailout and the automakers bailout. It also helps us understand why Richard Shelby said "this is your problem, not our problem", he thinks that the Big Three's problem are his good-fortunes. Foolish. If the Big Three go down, the entire national economy suffers.

1 comment:

Mberenis said...
This comment has been removed by a blog administrator.