December 10, 2008
To: Members of the U.S. Congress
Re: Opposition to New Auto Bailout Package
Dear Member of Congress:
As the details of the new financial bailout package for Detroit automobile manufacturers are still being worked out, I urge you to oppose this package on principle, and to vote against it when it comes before you.
House Speaker Pelosi (D-CA) is comparing the negotiations to a barbershop where, “Everybody’s getting a haircut here, in terms of the conditions of the bill…the management itself has to take a big haircut on all of this.” However, if this is a barbershop, then the taxpayer is leaving the salon with a bald shaved head.
Regardless of potential changes to the working draft from Dec. 8, 2008 that has been circulated, this bailout is the wrong prescription for Detroit automakers, and for the American taxpayer, who has already been burdened with a string of government interventions into the private marketplace.
Congress must not allow the perpetuation of “moral hazard,” and the partial nationalization of an entire industry, to continue. The federal government should not purchase ownership of any U.S. industry. There’s a term for this: socialism. When the government begins to own the means of production, something has gone terribly wrong. Is this Congress really prepared to continue down this dangerous and treacherous path?
Furthermore, the auto-industry is not collapsing. The unionized auto-industry is and the unions and their pensions would be bailed out – not the taxpaying consumers.
Additionally, by forcing production-model-restricting regulations in the form of CAFE standards, this proposal confines the Big Three to adhere to a strictly mandated federal agenda. This bailout will add directives that remove the economic elasticity that the thriving foreign auto-sector has enjoyed in other regions of the United States.
The fact of the matter is that taxpayers and unionized automakers hamstrung by their obligations to Big Labor will be best served by a restructuring of Detroit under Chapter paired with tax cuts which will serve to stimulate the economy. House Republican Leader John Boehner has a pro-growth tax plan which would help the American economy bounce back. The plan would zero out the capital gains tax for two years, increase small business expensing, and cut the corporate income tax rate.
I urge you to stand up for taxpayers and to reject the auto industry bailout package, and to turn to true pro-growth, free-market solutions instead.