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Former Massachusetts Gov. Mitt Romney has an op-ed in the New York Times today that does a fantastic job explaining why bankruptcy, rather than a bailout, is the best hope for a Big Three turnaround:
"If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.
"Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check."
Click here to read the full article.
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Sens. DeMint and Bill Nelson (D-Fla.) discuss their opposing views on the proposed $25-billion auto bailout last night on Bloomberg News.
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"We have the unions paying off the Democrats with their votes and the Democrats paying off the unions with this auto bailout." -- Sen. DeMint, as quoted by The State.
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Sen. Jim DeMint (R-S.C.) explains why he is opposed to the $25-billion auto bailout for Detroit's Big Three and why bankruptcy might be the best way for the industry to restructure and return to profitability:
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This week Congress is considering the idea of a $25-billion auto bailout for Big Three -- Chrysler, Ford and General Motors (GM) -- on top of the $25 billion already carved out for the Detroit-based automakers in September's $700-billion Wall Street bailout. The automakers have done their best to make their case for government funds, including threats of folding completely if left to declare bankruptcy and leaving all their employees jobless. However, several leading economic experts have called their bluff, recognizing that bankruptcy might really be the only way to save the Big Three and that a bailout would be a temporary fix.
Notes the Heritage Foundation on its Foundry blog: "The policy question facing Washington is how best to facilitate the changes Detroit must make to survive. The left wants to run everything through Congress. Speaker Nancy Pelosi (D-CA) wants to choose what types of cars the automakers can build and craft a centralized plan to 'assure the long-term viability of the industry.' [Barney] Frank wants a 'very tough oversight board' that could 'veto ventures' new management wants to pursue. Detroit will never go through the necessary changes with Congress in charge. The types of changes needed will be painful and unpopular, and it is difficult to imagine politicians allowing them, never mind insisting on them.
"There is an alternative. And it’s right there in the U.S. Constitution: bankruptcy. Since the founding of our country, the bankruptcy process has been an essential part of the nation’s commercial fabric. Bankruptcy is not the end of the road; it is, rather, a new beginning. The reorganization process provides unique flexibility to unlock the fundamentally sound productive capabilities of a faltering business by freeing it of many obstacles to success, such as unviable contracts, crushing debt and poor management. Reorganization is the right tonic for businesses like the Big Three that need to adjust quickly to new economic realities but are, at their cores, sound, productive and potentially profitable." (emphasis added)
For more information, check out...
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Published in the Myrtle Beach Herald on Oct. 23, 2008.
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The Heritage Foundation has an excellent post on its blog this morning about how the financial crisis we now face did not come about due to deregulation -- a claim Democrats continue to make. In doing so they inaccurately blame free-market principles for our current economic woes. Heritage explains why less regulation, not more, is the solution to our problems.
Click here to read the post.
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Sen. DeMint speaks on the Senate floor about why he opposes the bailout bill being pushed though Congress and who is really to blame for the financial fallout on Wall Street:
Text of Senator DeMint's remarks:
(Senate - October 01, 2008)
Mr. DeMINT. Mr. President, I have friends and colleagues whom I respect deeply who are on all sides of this bailout issue. One of them just spoke. We all to want do what is right for America, and I believe those who have crafted this plan had pure and noble motives. They want this country to succeed. They want prosperity. I just do not believe that this bill gets the job done. In fact, in the long term, I am convinced it will do more harm than good.
We are the Nation that has been called the bastion of freedom, and we are the Nation that has sacrificed blood and treasure to share that freedom with the world. We have fought communism, dictators, and tyranny. We have helped establish democracies and free-market economies across the globe. Because of America, millions of people are now electing their leaders, and millions have been taken out of poverty and enjoyed prosperity. Yet as the blood of our young men and women falls on foreign soil in the defense of freedom, our own Government appears to be leading our country into the pit of socialism....
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