I almost fell out of my desk last Thursday while reading “The Wall Street Journal.” Congress sent the “Big Three” automakers — General Motors, Ford and Chrysler — back to Detroit with nothing. Last week, automobile companies lobbied Congress for a $25 billion bailout package. The “Big Three” cited a serious cash crunch in the near future if they don’t get bailed out. The surprise came after two days of pleading from the chief executives. Neither the House nor the Senate held a vote on the potential bailout. “Until they show us the plan, we cannot show them the money,” said Speaker of the House Nancy Pelosi. CEOs denied the need to cut jobs or rework contracts with the United Auto Worker. Instead, they blamed the financial meltdown for their problems. Nearly all lawmakers disagreed. Robert J. Newman, LSU economics professor and department head, also disagreed. Newman believes bailing out the auto industry is not the wisest course of action. “In economics it’s called a ‘moral hazard.’ The government will continue to allow these companies to be inefficient by bailing them out,” said Newman. “The problem is these companies are finding it hard to compete with their existing cost structure. The Japanese companies aren’t struggling because they have a better cost structure,” said Newman.The companies need to apply for Chapter 11 bankruptcy, according to Newman, which protects companies from creditors. It gives troubled companies the chance to reorganize and re-negotiate contracts for supplies and materials as well as labor contracts. “The effects of the ‘Big Three’ filing for bankruptcy won’t have near the catastrophic consequences the media portrays,” said Newman. Newman said some industries that rely on the auto industry might have trouble, but it will not be as consequential as if the financial market went under. “It’s like if your parents continued to bail you out of jail. You would never learn your lesson, and they would be ‘enabling’ you to continue to do the wrong thing,” said Newman.If Congress “enables” the “Big Three” to continue on their current path, the companies will have the same problem six months to a year down the road. “What needs to happen is what happened to the airline industry after deregulation,” said Newman. Major airlines filed Chapter 11, restructured and came out with lower cost structure, according to Newman. By filing for Chapter 11, the airlines were able to consolidate to meet the market’s needs. They tightened their belts and were able to survive. But if the “Big Three” file Chapter 11, many people will lose their jobs and others will take wage and benefit cuts. As bad as this seems, the overpaid workers are what is hurting the companies now.Louisiana’s nine lawmakers are split over approving an auto bailout plan. Republicans and Democrats are splitting along party lines as to whether they will vote for the plan. One exception is Rep. Jim McCrery. Dan Turner, McCrery’s spokesman, told the Alexandria Town Talk that McCrery is supports aid for the auto industry. McCrery’s support probably has a lot to do with the GM plant located in Shreveport. The plant — which makes Hummer, Canyon and Colorado models — employs around 800 people. Although many economists think the auto industry should not get the bailout, politicians don’t share those feelings.  Problems arise when unions increase pressure on Congress. In 2006, the Democratic Party received $57.6 million in campaign contributions from unions, according to the Center for Responsive Politics, a non-partisan group that tracks campaign contributions. Democrats and Republicans need not to fold under the impending pressure from the UAW. Politicians need to do what is best for the people and the auto industry as a whole. On Thursday UAW president Ron Gettelfinger said inaction was simply not an option.  Gettelfinger testified last week to congressional committees. The Democratic leadership in Washington has set a timeline for the automakers. Pelosi and Senate Majority Leader Harry Reid told the “Big Three” to submit a plan by Dec. 2. It must have a “credible restructuring plan,” an honest assessment of their finances and the cost to eventually become viable again. The Democrats stated any loan granted by the taxpayers would have “senior status” and would have to be paid before any other debts are paid off. I’m no economist, and I don’t know anyone who works for the auto industry directly or indirectly. But I do believe in personal responsibility and self-reliance. The slowing economy is probably not the sole reason for the “Big Three’s” problems. Whether it’s poor management or poor cost structure, something else is responsible for their financial problems. CEOs of the “Big Three” should be held to the same standards of personal responsibility and self-reliance expected of families and individuals. —-Contact Matthew Gravens at [email protected]