Harry Reid Is A Buffoon

Okay, so that’s not news.  This part is — Harry Reid thinks the government bailed out Ford along with GM and Chrysler.  No you didn’t.  You bailed out GM and Chrysler, which put Ford at a competitive disadvantage, yet it is still surviving and even thriving on its own.

Moreover, as Jacobson says at Legal Insurrection, Reid’s comments reveal a more fundamental ignorance:

Reid doesn’t seem to understand that there was an alternative to the federal government bailout which could have achieved a better result without running roughshod over the legal process by having the government twist the arms of creditors and bond holders in the name of salvaging union power.

That process is called Chapter 11, and it has been used to rescue numerous industries in a manner which allowed companies to emerge stronger and more competitive, without a federal government bailout.

Exactly.  The reason GM and Chrysler needed the government bailout takeover was because Chapter 11 would have allowed the companies to repudiate their insanely burdensome union contracts, not because there was no alternative for the companies that would have left viable automobile manufacturers in the U.S.  The unions are a big part of the reason — though by no means the only reason — GM and Chrysler were in so much trouble, and the bailout was primarily directed at saving the unions at the expense of bondholders and other creditors.

Published in: on July 22, 2010 at 11:50 am  Leave a Comment  

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