“It’s a train wreck that we see unfolding in Cyprus,” one which could spell the end of the Eurozone, Heritage Foundation expert Nile Gardiner said yesterday on CNBC’s Kudlow Report.

The new European Union-dictated bailout is “evidence of the growing centralization of political power in Europe, which is unhealthy,” said Gardiner, who directs Heritage’s Margaret Thatcher Center for Freedom.

Read more analysis of the Cyprus bailout and Europe’s single-currency challenges on The Foundry.

What do you think? Is the Euro doomed?

James Sherk

In June, Heritage Foundation scholar James Sherk and Mercatus Center Scholar Todd Zywicki reported that “the Detroit auto bailout was, in fact, a UAW bailout.”

Their analysis earned praise on Capitol Hill. “Your paper with Zywicki on the auto bailout was excellent,” a senior House of Representatives legislative aide told Sherk. “Very on-point. It was very useful when we were preparing for the hearing” on the pensions of Delphi’s nonunion retirees.

The so-called auto bailout was in fact a union bailout, Heritage Foundation expert James Sherk explains in this week’s Heritage Foundation podcast.

More specifically, it was a United Auto Workers bailout. Typically, when a company goes bankrupt the labor costs are lowered to a more competitive level. UAW worker wages were as high as $56 per hour in pay and benefits. The politically influential UAW solicited federal tax dollars rather than following the usual bankruptcy procedure of lowering wages. If they had simply lowered wages, taxpayers could have saved $26 billion.

This is especially unsettling considering President Obama’s 2008 presidential campaign. Candidate Obama ran on a platform of refusing to spend tax dollars on special interest groups. The UAW is a special interest group, and President Obama spent $26 billion on them.

Listen here to learn more about the how the “auto bailout” benefited big labor special interests.

David John

The federal government should not act to bail out state and local public-employee pension funds, Heritage Foundation expert David John says in a new report.

The pension plans were created by the states and resolving their problems is ultimately a state responsibility, he says.

Congress should have little or no role in state and local government employee pension plans. It should not step in and attempt to impose a solution, a model for reform, or a bailout of severely troubled states. Just as states and local governments created the public pension problems they now face, it should also be their responsibility to deal with these situations. Even with the best intentions, it would be fairly easy for a reform plan to end up including a full or partial bailout as an incentive for states to act.

Thirty-one state public pension plans have “funding ratios that are under 80 percent of what is needed to pay full benefits,” John writes. “A ratio that is under 80 percent indicates that the plan is in severe trouble and will have great difficulty meeting its obligations. This is not a small problem.”

A new report by Senate Finance Committee Republican staff rightly argues that “a federal bailout of the states should be avoided at all costs.” But it ominously warns that a “legislative solution for consideration by Congress will be introduced in the Senate in the near future.”

What do you think? Should federal taxpayers be on the hook for state and local financial troubles?

Sally McNamara

At 6:15 p.m. on Fox Business “Cavuto,” European affairs expert Sally McNamara will discuss a possible bailout for Portugal.

Later, at 7:24 p.m. on Fox Business “Lou Dobbs,” Heritage vice president Kim Holmes will discuss the latest in Libya.