Peter Flaherty, President of the National Legal and Policy Center (NLPC), today criticized proposals to bailout GM, Chrysler and Ford, arguing that the plans are actually intended to bailout the United Auto Workers (UAW). Flaherty said:
The $700-billion Wall Street bailout was not meant to be a prize for special interest groups that were on the winning side of the election. It is a mistake to use TARP to reward high-tax, non-right to work states like Michigan. It was argued that failure of financial firms posed systemic risk; no such risk exists with the automakers.
The automaker bailout is actually a UAW bailout. The union will not allow companies to deploy capital in ways that the market would dictate such as closing plants and layoffs. That’s why UAW opposed the GM/Chrysler merger and a government role in it.
The Securities and Exchange Commission (SEC) is 
Who knew? Ally Bank is running all those TV ads belittling the “fine print” used by other banks. But as the Wall Street Journal 
of General Motors and Chrysler this week has to qualify as one of the most radical moves in the history of American industry. Not only would the Obama administration effectively place these companies under Treasury Department receivership, it would give the United Auto Workers (UAW) a huge financial stake in their operations. Indeed, that would seem to be the point: The administration and organized labor embody the Democratic Party Left. What strengthens one strengthens the other.
Even the United Auto Workers knows that sometimes it's necessary to bite the bullet to come out ahead in the long term. On Monday, February 23, the UAW and the Ford Motor Co. announced they had hammered out the details of a new agreement to preserve retiree health care benefits without jeopardizing the company's existence. The pact would have Ford to pay the union up to half its liabilities in the form of company stock. Given precipitous declines in auto industry stock prices over the last year, it's a sensible way to avoid disaster.
