Joan Vennochi

Enough with those bailout lines

By Joan Vennochi
Globe Columnist / November 16, 2008
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WITH EACH passing day, the bad news gets more alarming. Sales are shrinking, revenue is declining, and jobs across the nation could be lost.

The industry is in crisis. Time is of the esssence. Delaying support will cause irreparable harm.

President-elect Barack Obama, please rescue the newspaper industry. A thriving, vibrant press is a critical national need. Besides, newspaper writers across the country helped elect you.

In an opinion piece published in USA Today, Michigan Governor Jennifer Granholm and Richard Blouse, president and CEO of the Detroit Regional Chamber, used much of the above language to press their case for a Detroit bailout.

Part of their plea rested on the federal government's previous decision to rescue American International Group. If Washington could "provide a whopping $150 billion lifeline to a single insurance company," they wrote, then it should be able to "save and create millions of American jobs by loaning and investing a fraction of that amount" to the automotive industry.

No one in government is going to back a newspaper bailout and no one should.

Yet these same arguments are winning bailouts for other industries.

Where will they end? Is there an objective economic formula for deciding who gets one? Or, is it rooted more in politics, even though Obama pledged to reject politics as usual if the country elected him president?

Details of a government rescue of the auto industry are still in the works. From the start, the proposal felt less like a coherent piece of fiscal policy and more like a jobs bill and thank you to labor for supporting Obama and the Democrats during the 2008 campaign. It makes you wonder who else might get a thank you note from the Obama administration.

The Service Employees International Union, the Teamsters, the AFL-CIO all backed Obama at critical moments during the tough primary and general election seasons. According to the Asssociated Press, Obama received 60 percent of the union vote in 14 states where voters were asked if they were union members. Union support was even higher in Pennsylvania, Nevada, Washington, and Michigan. The Michigan AFL-CIO dispatched 85,000 volunteers to knock on 500,000 doors, make 1 million phone calls to union members, and distribute 2 million leaflets at work sites, the AP reported.

Already, it's payback time.

Bankruptcy offers companies the best chance at a fresh start, some experts say. But jobs and benefits will be shed during the painful restructuring process. In contrast, a government bailout for General Motors Corp., Ford Motor Corp., and Chrysler will save union jobs and collective-bargaining agreements, at least in the short term.

Beyond the bailout, the labor agenda includes policies that make it easier to form unions, expand the pool of workers who can join them, and extend healthcare benefits. The automakers and the United Auto Workers want half of whatever they get from Washington to help the companies meet healthcare obligations for more than 780,000 retirees and their dependents, under contracts signed in 2007.

Any American worker would be relieved if the government stepped in to preserve health benefits. Today, the opposite is happening, as companies cut benefits to cut costs. A better healthcare plan for everyone was a big part of the Obama campaign agenda, and his ability to deliver on it will be a major measure of his success as president.

In the meantime, he and fellow Democrats should refrain from playing economic savior on a sector-by-sector basis.

Anyone in a struggling industry - and that includes the newspaper business - understands the pain of layoffs and reduced benefits. It's human nature to beg for the life boat as the waters swirl waist-high. But, capitalism doesn't call for survival at any cost or by any means necessary; it's survival of the fittest. Adapt or die, as the corporate fallen know.

If newspapers aren't producing news in a format that people want to purchase, it's the industry's problem. If Detroit isn't producing cars people want to buy, that's Detroit's problem - not the taxpayers'.

Joan Vennochi can be reached at

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