Economics

North vs. South (automakers, that is)

With the bailout money being thrown around like beer in Wrigley Field, the federal government has managed to insert itself in the car business. I would call what has happened the nationalization of the auto industry (Chávez and Putin style), and I would like to see what clause in the Constitution gives the federal government this power.

Auto manufacturers in the south (relatively speaking) produce cheaper, more desirable vehicles, and do so with almost half of the labor cost of Detroit ($40-45 an hour salary plus benefits vs. $70-75 an hour average). In a sane country this would be a good thing. But the government has decided to reward the companies that produce more expensive and less desirable vehicles with tens of billions of our taxpayer dollars. Southern auto manufacturers and employees are forced to finance their competitors in Detroit. What sense does that make?

Clearly northern auto companies had no worries whatsoever that the bailout would not go through. I guess that’s why they pay their lobbyists the big bucks, right? This doesn’t pass the smell test. And whatever is going on, ‘We the People’ are footing the bill.

With the federal government using our money to reward their buddies in Detroit, and sticking it to the southern automakers, could this lead to another north-south split in the United States?

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