Then there was the incessantly repeated story of the stupid auto executives who flew to Washington for Congressional hearings on their private jets. That was true and deplorable, of course, but scarcely of great relevance to the issue of whether America should preserve its manufacturing base and a million jobs in auto and related industries.
What Americans may not know about the problems of the automotive business seems at least as pertinent as what they have been told so far.
The chances are that voters outraged over those mythical $70-an-hour wages have no idea how heavily the livelihood of auto workers in competing countries is subsidized by their governments -- starting with health care and moving on to child care, pensions and a host of other benefits that American workers have not begun to imagine.
Such comparisons tend to be absent from most mainstream analysis of the auto crisis. Equally relevant and usually missing, too, is the news that competitor nations are preparing to provide many billions in aid to their car companies. Right now, the European Union is considering a loan package to the continent's auto industries that may exceed $50 billion.
Washington's first $15 billion loan to the Big Three will likewise come from a Department of Energy program to encourage new green technology. So what is the difference? In Europe, there is far less controversy over preserving critical jobs and the industrial base. And in Europe, there is broad recognition of a basic fact: The precipitous drop in sales confronted by the automakers has been caused by economic conditions beyond the control of those companies. As credit dried up, so did car sales.
None of this is meant to suggest that the management of GM, Ford and Chrysler -- or the United Auto Workers, for that matter -- shouldn't pay a high price for their failure to restructure in years past and their resistance to modernizing their products and processes. Taxpayers must be protected, just as they were when the government loaned billions to Chrysler.
But it is ironic to think that the Bush administration and Congress would swiftly appropriate hundreds of billions of dollars to save the same firms whose stupidity and criminality drove the economy down -- while begrudging a far smaller amount to a major industry brought to ruin by the financial crash.
As each Wall Street bailout receives approval, with or without appropriate conditions, we are assured that the risks of bankruptcy are simply unacceptable. If American International or Citigroup went down, who knew what hell might break loose? There was some merit in that argument. The truth is that we are just as ignorant of what destruction will ensue in the broad economy should government allow auto to go broke. If and when that happens, the opinion polls will shift overnight. But it will be too late.
© Creators Syndicate
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Albion Monitor December
12, 2008 (http://www.albionmonitor.com)
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