Pat Buchanan- Really, really wrong on trade

Pat Buchanan has a knack for being as wrong on trade issues as it's possible to be. In this morning's Op-Ed, Buchanan argues that "What's good for GM is good for the GOP."

And to let the auto industry die is to write America out of much of the economic future of the planet.

In a good year, like 2005, Americans buy more than 17 million new cars, and West Europeans as many. Tens of millions in Eastern Europe, Russia, China, India and Southeast Asia are now moving into the middle class each year. These folks will all need or want one or two family cars. If we let the U.S. auto industry die, that immense and burgeoning market will be lost forever to America, and ceded to Asia.

"Who cares?" comes the free-traders' reply. Japanese and Koreans are setting up factories here. They can pick up the slack.

But that means Americans will work for and depend on foreign companies for a necessity of our national life as vital as the imported oil and gas on which our cars and trucks operate. All the profits of the mighty automobile industry in America will be sent abroad.

I'll leave the politics to others for now, though trying to outbid Democrats for the love of union workers seems like a losing strategy. The protectionist policy behind Buchanan's argument is what's really at fault. Buchanan would pump billions in taxpayer dollars in failing companies, bailing them out for the decades of bad decisions that have led to their decline. American consumers have turned away from "American" cars because they are more expensive, and less reliable, than comparable "foreign" cars. I use quotes because I have a hard times telling the difference between a Ford assembled in Mexico and a Honda made in the U.S.A. Which is more American?

If taxpayers refuse to bail out the Big Three, the U.S. auto industry won't die. It will change significantly. Ford or GM might even be bought up by a foreign company, just as Daimler did to Chrysler earlier this decade. But that new owner won't start shipping immense profits overseas. It will take on the problems of the company it buys. Some labor agreements might get restructured, bringing pay and pensions back to competitive levels. Some of that pension obligation might even get shifted to taxpayers, but that's a problem with our pension system, not the auto industry. None of these details represents a decent reason to protect poorly run companies from feeling the consequences of their bad decisions.

Bailing out the Big Three is subsidizing failure. And you only subsidize something when you want more of it.