When the $14 billion bailout for the auto industry fell through last night, Senate Majority leader Harry Reid said, "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight."
Stocks opened lower as Reid predicted, but not nearly as much as his words suggested. And soon after the open, stocks began to rally. Some will say investors grew hopeful that the White House and Treasury Secretary Henry Paulson would step in and use TARP money to save the auto industry. However, I believe investors are simply pleased that Congress is taking a hard stand against bailout seekers. Bad companies should be allowed to fail. At least some of our politicians have finally gotten that message.
Ron Gettelfinger, president of the United Automobile Workers, gave a press conference this morning blaming Republicans for the failure of the bailout, but the conference only proved how defensive Gettelfinger has become. The U.S. auto industry is dying, yet the UAW refused to allow any wage concessions in 2009. The UAW doesn't seem to understand that it has priced its membership out of the market. While this union tries to "protect" its members, foreign manufacturers are grabbing market share and putting Americans to work throughout the South. It won't be long before out-of-work union members begin migrating south seeking employment at these non-union shops.