It is by now clear that the Senate Republicans killed the auto bailout deal for one reason only: to give organized labor a bloody nose. For sure, there are many complicated issues with this proposed bailout including the sustainability of the business model, mushrooming unemployment and the devastation of local economies, contagion across other sectors and the broad-based demand slump, the relationship to energy policy and the need to make more energy-efficient vehicles etc. But the Senate Republicans were simply out for a fight with the unions, the United Autoworkers in particular. Despite the union agreeing to major concessions, and despite the fact that the average hourly wages barely differs among union and non-union auto plants, this was the line in the sand.
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