Bailing Out the Automakers

Tuesday, December 23, 2008

After witnessing the Big Three automakers come to Washington to beg for money, and seeing GM and Chrysler take the bailout ["Aid in Hand, Clock Ticks for Detroit," front page, Dec. 20], I know that I will never buy another GM or Chrysler product, and maybe not another Ford. Which is too bad, because I have one Ford and one GM car in my garage right now, and both are pretty nice vehicles.

But I'm disgusted by the automakers and by our government for undermining the American free enterprise system. Now the only way to truly revive our economy is to drive these terminally ill companies into bankruptcy by boycotting their products. Successfully doing so would free their human and capital resources to reengage in economically viable businesses. The government can force us to pay taxes, and it can misuse the revenue, but it can't (yet) force us to buy cars from a failed, nationalized industry.

Would this be painful economically? Absolutely. Would it deepen the recession? Absolutely. Would it cost us, the taxpayers, even more? Absolutely.

But it's the only way to correct the system so my children can grow up to live in a prosperous and free country.

MICHAEL HIGGINS

New Market

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It wasn't enough for us to be bilked out of $700 billion to bail out grossly mismanaged financial institutions. Now the president has decided, without congressional approval, to serve the equally mismanaged auto industry a morsel of that $700 billion pie -- $17.4 billion in emergency loans -- to tide it over until our next president bakes his own pie.

By voting down the auto industry bailout, Congress served us well for the first time in a long time. It's a shame the president didn't follow suit and deny a bailout for the Big Three, forcing them into Chapter 11 reorganization, which is where they belong.

MICHAEL J. LEGGIERI JR.

Frederick

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If union members will have their wages reduced to match those of employees at non-union plants [front page, Dec. 20], why shouldn't executives at GM and Chrysler be subject to the same requirement? Executives at Japanese auto companies must find it laughable that the leaders of the U.S. carmakers receive multiples of their own salaries even as those U.S. companies lose billions of dollars.

JOSEPH H. GUTTENTAG

Washington

Regarding the Dec. 21 Business story "Executive Pay":

Much outrage has been expressed about executive compensation, but it is clear from this article that it is unrealistic to expect to see any reduction in executive pay because it is set by executives and committees they appoint.

But there is a much easier way to reduce inflated pay packages. Congress could simply establish another marginal income tax rate, such as, say, 75 percent on compensation over $10 million. Congress could also mandate that all compensation, not just salaries, be taxed at this higher rate.

Taking this approach would be easier than expecting executives to change their behavior.

ALBERT G. JORDAN

Vienna

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As part of the auto bailout, why couldn't the federal government buy up -- at deep discounts -- excess SUV and pickup truck inventory sitting on dealer lots? These admitted "gas guzzlers" could then be allocated to local emergency services agencies, other hard-pressed public services and nonprofits such as Meals on Wheels that need large vehicles. That way, at least, taxpayers would get something tangible for their bailout money, while still relieving struggling dealers and auto manufacturers.

ROBERT RUDNEY

Vienna