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Ben Stein How Not to Ruin Your Life

Ben Stein, How Not to Ruin Your Life

Bail Out Detroit – Now

by Ben Stein

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Posted on Tuesday, December 9, 2008, 12:00AM
Usually this column is about finance. It usually is an attempt to help the reader make money and have a more comfortable life. I am well aware that I have made a lot of mistakes and that in the short run many of my suggestions have turned out badly. Believe me, I am sorry. I still believe that in the long run the investment ideas will do well, but I am terribly sad that people's hopes have been disappointed in the short run.

My best guess is that we are in a panic of sellers and market manipulators and that we will recover within a few years, but I base this on history. We may have moved into a new phase where history is irrelevant. I would be surprised if that were so, since it's never been true before, but one never knows.

However, today, let's talk about the American auto companies. They need a bailout from us taxpayers, and they have to get it yesterday. Here's why

First, we are on thin ice economically. To allow our largest heavy industrial component to fail at this delicate moment is suicidal. To put a couple of million more Americans into unemployment is just not sensible. Mr. Barack Obama is talking about public works projects to employ hundreds of thousands of Americans -bridge building, school building, airport building. These projects take time to start, disrupt local community life, and are famously wasteful.

Why not be smart about it and NOT LET AMERICANS GET UNEMPLOYED IN THE FIRST PLACE? (Please pardon the shouting.) There are millions of Americans already hard at work making great American made cars and trucks. Why not keep them on the job? Wouldn't that be smarter than allowing the whole upper Midwest to fall into oblivion and then rescue it over a fifty year period?

Second, I get sick when I hear about how this or that professor says we cannot have bailouts in a free market. Really? How about the bailouts the professors get because gifts to colleges are tax free? How about the bailout they get because if they have to teach six hours a week they feel overwhelmed, while the guy on the line in Dearborn works a grueling forty and doesn't whine about it?

Somehow, we can give bailouts to investment banks where the top dogs make hundreds of millions a year for running the company into the ditch and wrecking the whole credit picture in America. Somehow we can have bailouts for Fannie Mae and Freddie Mac, whose bosses were trading on the credit of the taxpayers to make themselves rich while pumping up a serious housing bubble.

Amazingly, we can have whole fleets of C-130's fly to remote areas of Iraq and Afghanistan with pallets of hundred dollar bills piled from floor to ceiling. Then we can pass them out to warlords who make tea for our soldiers one hour and blow their guts out the next. We can send CIA operatives into Somalia and give millions, maybe hundreds of millions, to warlords to fight other killers.

But we cannot find it in our hearts to save our fellow Americans in Ohio and Michigan and Indiana who make the cars and trucks that about half of us buy? We can send billions to Germany and Japan to bail them out after they bombed us and killed our POWs and killed six million Jews. But we cannot help the children and grandchildren of the men and women who fought our war and made us the arsenal of democracy?

Something is very wrong here.

And please don't tell me how GM and Ford and Chrysler have made bad cars that people don't want. I drive only American cars, only GM cars actually, and they are the best, coolest cars I have ever driven: my 1962 Red Corvette, my mighty Cadillacs whose potent engines and super brakes have saved my life many times on the freeway. Yes, the cool people in DC and New York don't drive American cars. But a lot of other good people do and we love them. And my Cadillac dealer down here in the desert, Jessup Motors, gives me a lot better service than my Mercedes, Porsche, BMW, Jaguar, or Acura dealers ever did. I would trust my life to Detroit iron any time.

And why are we so angry at the car companies' executives? They get miserable pay by Wall Street standards and have much harder jobs. Why are we so angry at the unions? They negotiated their deals in good faith. It's not their fault that roller coaster gasoline prices messed up their world. They are our brothers and sisters. They fight our wars. They maintain our middle class lives. Maybe they get paid a lot, but they have been giving back for years. When will it ever be enough? And what about the retirees? They get the benefits they were promised. If those can be taken away, then whose benefits are safe? And do you think it will be cheaper if the government takes on those costs directly?

Let's stop the Depression before it starts. Let's show some fairness and good faith to our own. Let's bail out the Big Three, help them slim down, shape up, and keep making great cars and trucks. The Big Three are us and if we cannot help ourselves, who can we help?

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  • Yahoo! Finance User - Tuesday, January 6, 2009, 1:43PM ET  Report Abuse

    • Overall: 5/5

    I would like to thank my distinguished colleague, Dr. Stein, for his cogent comments. Finally, someone has the courage to speak out on this National Security and Economic issue, so critical to our national survival. I hope that in the future, Dr. Stein will address the related issues of the media-driven bigotry and prejudice against our Manufacturing Class, as well as the decades of irresponsible government policies that crippled the value-added industries that make up the Real-Economy, which is now disappearing, along with our Middle and Working Classes, as well as our ability to defend ourselves. Future historians will look back on us with bewilderment, at how we so enthusiastically supported our own distruction and the impoverishment of our grandchildren.

  • Yahoo! Finance User - Sunday, January 4, 2009, 5:47PM ET  Report Abuse

    • Overall: 5/5

    I am the wife of one of those UAW Ford workers. Its about time someone stepped up and told it like it is. We do NOT make $70,00 and hour AND I work full time also to keep our family afloat. We are struggleing to send our children to college just like the rest of the middle class. For those people who have NO clue and to have put targets on our backs shame on you. To Ben Stein, who has had the courage to tell you that when you leave behind one of the last large industries left in our country you will cripple it CUDOS! One step further, buying American shouldn't stop with the car you drive - or this will be a never ending cycle... Do you really want to keep buying our goods from countries whose companies put poison in baby formula and its US that has to discover it.... THIS IS OUR WAKE UP CALL - hope you didn't push your snooze button!

  • Yahoo! Finance User - Sunday, January 4, 2009, 3:35PM ET  Report Abuse

    • Overall: 5/5

    My father sold Volvos in the late 70's/early 80's and he said you came in one rainy night to test drive. My pop said you were driving like a maniac, so finally he yanked on the parking brake. The next day or so you wrote a derogatory story about car salesmen in your Herald Examiner column. I'm glad that you've seen the light and buy American. Even though I frequently disagree with your writings, I agree 110% with this article. You should come by and check out the new Saturns, I'd be happy to sell you one.

  • Yahoo! Finance User - Sunday, January 4, 2009, 10:44AM ET  Report Abuse

    • Overall: 4/5

    Food for thought. You make some good points but, when does it stop and who is next. These are costly mistakes that are not going to be fixed. Itis going to cost millions of dollars at whose xpense? Do they pay back the government? Where doe the mony come from that helps these companies bailout? I agree that the focus should be on our own, bailout our own American companies and help our own American people stay employed, keep our own American economy stabalized, etc. I was against the bailout from the beginning. I am not so much against the bailout itself as I am against the terms of it. Re think the bailout.

  • Yahoo! Finance User - Sunday, January 4, 2009, 8:40AM ET  Report Abuse

    • Overall: 3/5

    I agree with bailing out Detroit auto makers I approach it from only one direction; do not torture The Workers because of the utter stupidity of The CEOS and the Greed of The Union Bosses.

  • Yahoo! Finance User - Sunday, January 4, 2009, 6:07AM ET  Report Abuse

    • Overall: 5/5

    A little give from the UAW and retooling of ideas and innovation will put it back on track. If the USA would lose it's hunger for leisure time and get back to a work/duty ethic we won't become the next big, 3rd World economy. We've let Madison Avenue lead us down the path of a frivolous, packaged, keep-up-with-the-neighbors lifestyle and the money lenders greased the wheels. Progress is more than flat screen TVs, pre-chopped lettuce in a bag and larger than army truck, all-terrain vehicles for kids! Along the way the masses have tossed aside the desire to learn, to be educated and to work toward a goal for the "I want it now and I don't care how I get it!" lifestyle. What comes with joblessness and a failing economy? MORE handouts, more thieves and burglars and even less of a desire to be honorable!

  • Yahoo! Finance User - Saturday, January 3, 2009, 1:02PM ET  Report Abuse

    • Overall: 4/5

    While I don't agree entirely with Mr. Stein, mostly about the difference betweeen U.S. and forgeign auto dealers, thr bascic premise of the article is spot on. Mike Fairview, OR

  • Yahoo! Finance User - Saturday, January 3, 2009, 10:20AM ET  Report Abuse

    • Overall: 5/5

    Mr. Stein is right on the mark, as always. I do not drive at the present time, but have always in the past driven GM & Ford. My 1st auto was Jeep 1951 ,2nd 1953 Chevy,3rd a Chevy my 4th a Pontiac, 5th a Merc. All driven 200,000 miles.

  • Yahoo! Finance User - Friday, January 2, 2009, 9:56AM ET  Report Abuse

    • Overall: 1/5

    Don't bailout Detroit because it will only allow tthe cancer to remain - the banks were bailed out in a poor attempt to keep credit available. We need to reform Detroit, so if you want to save the people, you would be better off giving the money to the people and force Detroit to fix itself.

  • Yahoo! Finance User - Thursday, January 1, 2009, 10:27AM ET  Report Abuse

    • Overall: 5/5

    I have always liked Mr. Stein's no nonsense views on things and this time I think he is right on target. May be he should think of running for President next term.

  • Yahoo! Finance User - Saturday, December 27, 2008, 8:55AM ET  Report Abuse

    • Overall: 1/5

    If we say yes to GM, who else are not childeren and grand children of men and women fought the war for our country? Who else we can say No when their business went down? The bail-out is misusing taxpayer's money, destorying capitalism and the free-market principle. GM has its chance for a decade but proved not be able to turnaround. It is not the oil

  • Yahoo! Finance User - Thursday, December 25, 2008, 10:02PM ET  Report Abuse

    • Overall: 1/5

    So let me get this straight. We should bail out the U.S. auto industry industry because Ben gets great service at his local Cadillac dealer. Wise up Ben, you're probably the only rich and famous guy who buys from the local Cadillac dealer. Of course you''ll get good service. And by the way, ask anyone who works in the used auto auction business, used Cadillacs typically don't have much value because they are junk.

  • Yahoo! Finance User - Thursday, December 25, 2008, 11:20AM ET  Report Abuse

    • Overall: 1/5

    Speechless, then why not to nationalize all the industries and achieve full employment. I think that was tried and failed. Keep printing worthless paper to bail out crooks . . .

  • Yahoo! Finance User - Wednesday, December 24, 2008, 9:52AM ET  Report Abuse

    • Overall: 4/5

    You can chatter away about how this that or the other entity deserves what it's getting, but if the auto makers fail, there won't be an auto industry to go back to when the economy eventually does recover. I'm tired of moral Pyrrhic victories. The auto so-called bailout, actually a bridge loan, is a pittance compared to the credit company real bailout.

  • Yahoo! Finance User - Wednesday, December 24, 2008, 12:36AM ET  Report Abuse

    • Overall: 5/5

    We are NOT bailing out Detroit and the auto makers..we are bailing out the UAW. I was a UAW member back in the late 1960's when a UAW worker could work 2 hours on the job, go to the airconditioned caffeteria and play cards for 6 hours and get paid for 8. Union members get free everything from health care to internet access. I once asked my brother in law, who still works a union job, how can an American worker NOT in the union and making only $7 to 12 dollars an hour afford to buy a product made by some one making $68 or more dollars per hour? Starting wages i hear for auto workers now are in the range of $14/hr. American has been dismantled over the last 40 years piece by piece as jobs were shipped over seas to avoid having to pay high union wage and benefit demands and avoiding environmental litigation. The unions served a purpose in their day, but that day is long past. Ben forgot the most important part of the equation..even if congress bails out the auto industry and the union...who has any friggin money to buy a new car? Why not bail out every legal American-give us all, say, $100 grand or more. I guarantee, most of us would go out and put a downpayment on a new car! We could also get caught up on our mortgages, property taxes, etc. The Depression, oops RECESSION...would be over! The kind of change Americans really NEED is the kind we can stuff in our wallets! Obama are you listening!

  • Yahoo! Finance User - Tuesday, December 23, 2008, 10:47AM ET  Report Abuse

    • Overall: 5/5

    Toyota, the greatest car maker ever, (according to popular opinion) has now posted the first loss in 70 years. Guess its not just the American car makers that are hurting. I thought only Toyota, Honda and the like were the only ones that are making cars that people want to buy. Look at the numbers, the top 2 selling vehicles, big american trucks are off in sales less than the small fuel efficient cars by Honda and Toyota. Oh, BTW what happend to the record high gas prices and the end of cheap gas? I filled up for less than 30 bucks the other day. In this current situation all carmakers are hurting, but the americans are worse off because of the financial assistance the import carmakers get from their home countries while we make ours beg for help. 700 billion to the financial sector that nobody knows where the money has gone. And didn't Ford say, thanks but no thanks to the money because they just wanted access to a line of credit and didn't want to live by all of the stipulations the goverment wanted to impose? We need to save american manufacturing, we need to actually make things in this country instead of shipping production overseas.

  • Yahoo! Finance User - Tuesday, December 23, 2008, 10:26AM ET  Report Abuse

    • Overall: 1/5

    The same tenor in your last messages. Come on just let us sink even more money. Then all will be fine... Surely...

  • Yahoo! Finance User - Tuesday, December 23, 2008, 10:07AM ET  Report Abuse

    • Overall: 5/5

    Folks need a reality check. Labor costs (all in) account for 10% of the total cost of a new vehicle. Go ahead and act like you're all brilliant and know it all and say it's the union's fault and management's fault for bargaining those benefits. You're simply wrong. There are only two purchases that anyone will ever make that almost ALWAYS involve getting a loan. Buying a house and buying a car. With the credit freeze, both of those markets have died. Union contracts didn't do that. Name me any one company that can sustain a 30% drop in sales OVERNIGHT and not have a chas flow problem. In that scneario, it's only a matter of time. And anyone that insists that Toyota and Honda's current financial strength are a result of their union contracts doesn't understand how Japan subsidizes those companies (unfair trade practices, closed markets, tariffs, value-added tax rebates, national health care & lifetime employement guarantees, etc) Just admit that you're union bashing and move on. Don't waste our time trying to sound like you're making an argument based upon anything else.

  • Yahoo! Finance User - Monday, December 22, 2008, 9:23PM ET  Report Abuse

    • Overall: 5/5

    Thank you, Ben Stein. Folks, this is a guy we should listen to. Mr. Stein is a voice of reason, even when I disagree with him. I so thoroughly enjoy the chance to disagree with him, actually, because he epitomizes the art of debate and civility.

  • Yahoo! Finance User - Monday, December 22, 2008, 8:32PM ET  Report Abuse

    • Overall: 1/5

    I normally agree with Stein but not on this one. The crummy managment and the ridiculous union demands have finaly come home to roost. EVERYONE involved will have to sacrifice. Managment will have to come down from the private jet high horse and the union will have to stop gutting the golden goose. Its OVER. The free ride for executives and the endless string of goodies for the unions has choked a truely fine industry to the point of death. Bankruptcy would be the best route, and would free the company to change the direction of their business and show the union that this is not a joke and their butts are on the line. If you want a job you have to change. If you want a company you ahve to change. My biggest fear is turning the businness over to politicians who have proved time and again they can't run anything.

  • Yahoo! Finance User - Monday, December 22, 2008, 4:41PM ET  Report Abuse

    • Overall: 5/5

    "Bout time somebody said it loud. Why is it okay to hand money over to the people who frackin' *caused* the crisis - who create NOTHING but not aid a major business that actually BUILDS something? And what's wrong with unions? They didn't cause this frackin' crisis either. All those Repugnicans against helping American car companies in favor of foreign ones? These were the very same people a few years ago who changed the name of French Fries to Freedom fries! My god, they simply have no shame!

  • Yahoo! Finance User - Sunday, December 21, 2008, 9:52PM ET  Report Abuse

    • Overall: 1/5

    I've read all sorts of positions on the bailout, and the economy in general, but this one is terrible. At least most positions come from a philosophy, from an economic theory, but this appears to be someone who took well-worn cliches and built a dilapidated argument out of them. If you support bailing out failing companies, fine. If you oppose it, fine. But there is no magical quality about one particular part of one sector of the economy that deserves special help; even being from Detroit, even having a grandfather who put in 40 years there, I can't justify bailing it out. The unions have long since stopped representing anyone but themselves; they have, with government help, strong-armed the Big Three into paying FAR more money from what is, at best, a marginally better job than competitors. They have a deal where laid-off workers receive most of their pay for the rest of their careers, if they desire. And the UAW has been a huge supporter of the very anti-business politicians in Detroit and Washington who have allowed other countries to rig unfair tax systems, taxed gas by 50 cents a gallon, put in place safety and pollution regulations far beyond what was needed, and passed stringent taxes on business. The Big Three need to go bankrupt; the Big Three need to dissolve the union contracts, restructure their companies, completely change how their companies are run, and be allowed out of agreements that cost them more than they can afford. A bailout, without fixing these problems, is like hiding the symptoms of a disease instead of treating it.

  • Yahoo! Finance User - Sunday, December 21, 2008, 9:18PM ET  Report Abuse

    • Overall: 4/5

    I agree with Ben Stein to a point. Some guarantees that the union has in place that the auto makers have to finance is a unemployment wish list that most Americans could only dream of having with things such as the Job bank. Those are the extravagances, I see the law makers wanting to kill The import companies picked non-union areas for that reason, as costs to the company would be lower compared to profit margin, however American companies are still the only companies building most of the equipment used for public safety in the US. If the police and fire departments across America trust American vehicles, they must be doing something right with them, especially since most American makers are learning from their mistakes and are now rating the same as their Japanese and German made brother en in quality standards.

  • Yahoo! Finance User - Sunday, December 21, 2008, 4:00PM ET  Report Abuse

    • Overall: 5/5

    great column! And why do Ford, GM & Chrysler have to have a recovery plan, oversight, etc. to get bailout money but cash with no restrictions is flung at the idiots who drove Wall St and the big banks into crisis?

  • Yahoo! Finance User - Sunday, December 21, 2008, 3:16PM ET  Report Abuse

    • Overall: 1/5

    If they go into bankruptcy they can dump those stupid and outmoded union contracts. There is no incentive to fix something if they can just run to the Government and get a band aid. The only reason the Democrats are all over this is so the unions will stay in the game and the industry can start to be nationalized. Let the union contracts die during bankruptcy and the industry will be able to actually be competitive. I know everyone would love to have a free ride, where is our job bank? However, it is not practical in this cycle of the economy.

  • Yahoo! Finance User - Sunday, December 21, 2008, 1:27PM ET  Report Abuse

    • Overall: 5/5

    I usually disagree with almost everything Ben Stein says, but he's right on target here. American-built cars today are every bit as good as those built anywhere else. BTW, the largest seller of cars in China right now is GENERAL MOTORS.

  • Yahoo! Finance User - Sunday, December 21, 2008, 1:03PM ET  Report Abuse

    • Overall: 4/5

    My grandfather worked for Ford until he retired, my dad worked for Ford until just before I was born. I was born in Detroit and raised in Dearborn. I'm now living in the middle of the mess here. Thank you Mr. Stein for sticking up for people like my husband and the millions of other people who work for the Big 3 and their suppliers

  • Yahoo! Finance User - Sunday, December 21, 2008, 12:07PM ET  Report Abuse

    • Overall: 5/5

    I am of two minds. If it's a bridge loan with conditions, they should call it that. A bailout is what the financial institutions got, no questions asked. This is about a lot more than some corporate execs and jets. So Bravo Ben for calling it as it is.

  • Yahoo! Finance User - Sunday, December 21, 2008, 11:08AM ET  Report Abuse

    • Overall: 5/5

    Bravo Mr. Stein!

  • Yahoo! Finance User - Sunday, December 21, 2008, 10:13AM ET  Report Abuse

    • Overall: 4/5

    I had my own ideas about this and I will rethink them a bit. I don't belive in the bailouts we have already done at the expense of the taxpayer. We the people have no say in this and it is wrong for the "Government" to just dole out our money to the very morans that got us in this fix in the first place. I would be more sympathetic to the big 3 since they are more a victim of the economy than the others where greed was the motive....

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