Tuesday, March 31, 2009

Necessity is the Mother of Invention

Or, "It took them a few minutes to admit the Titanic was sinking, too."

First of all, had Obama handed GM any more money this week, you'd have heard a bunch of right-wing talk about the debt we're handing to our grandkids. Since Obama decided not to hand GM any more money, and decided to end diplomatic relations with the captain piloting that particular ship into that particular iceberg, you've heard a bunch of right-wing talk about the public sector interfering with the private sector.

Guess Obama just lost that whole "populism" thing. Now the right and the left get to talk smack. We'll look at how we got here another time. I'm interested in some quotes from this article, a boo-hoo "autoworkers have no friends" lament that includes the following whoo-hah quotes:


Twenty years after "Roger and Me," we are all heartless capitalists. We want efficiency, viability, and fast results, and we're not going to fritter away tens of billions of taxpayers dollars waiting for them.
First of all, capitalism is only about anything efficiency and viability when there is money to be made in efficiency and viability. It is all about fast results (real or imagined), which is why we got here in the first place. Second, we already have frittered away billions waiting for them. Hey folks, we've been waiting for the wealthy CEO's and the union bosses to figure it out for years. And for years all we've gotten is higher CEO pay and higher labor costs, while, inexplicably, autoworker's real income has gone down.


But in picking the winners of the automobile industry, the government is also picking the winners and losers of the national economy. And it's very clear who the losers are: It is the same autoworkers and their families who were the losers in "Roger and Me." Who have been the losers for decades, as the slow drain of the auto industry has sapped the benefits, wages, and, most important, the job prospects of the people who depended on the mid-20th-century industrial economy.
The government didn't pick the winners and losers, the consumers did. The government has kept the losers alive and on life support for too long, allowing wealthy individuals to get wealthier off the government teat all in the name of keeping autoworkers employed.


"Restructuring" means that we have reached the endgame here. The administration has said, in effect, that it will no longer expect, or even allow, the auto companies to subsidize the failing rust belt economy.
In the context of the article, this is apparently a bad thing. I say welcome to reality.


The responsibility of government, however, is not to keep any particular company running. It is to keep the workers of the auto industry employed, and so far there is no plan.
No, it is not the responsibility of government to do that. It is awful nice of government to do that, when they are able to do it correctly, because it helps transition the economy from point A to point B with less stress on other industries, families, etc.

But when you start talking about it being government responsibility, after years of dealing with this, after years of zero innovation, then we're better off (and so are the autoworkers) by letting the thing fail so something new can replace it.


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2 comments:

DADvocate said...

Your last two paragraphs sum up the situation very nicely. Personally, I'm not sure who to be more pissed off at the companies or the unions. They all make more money than I do, so I went out and bought a Toyota Tundra. Used, but I'm not supporting failure and greed.

Dante said...

"Since Obama decided not to hand GM any more money, and decided to end diplomatic relations with the captain piloting that particular ship into that particular iceberg, you've heard a bunch of right-wing talk about the public sector interfering with the private sector."

The White House very specifically pressured General Motors to fire their CEO. I applaud Obama for not backing up plans to give out additional money. What I don't applaud is that Obama fully intends to back plans to give GM money as long as GM does Obama's bidding. If it were just a matter of Obama telling GM their plans weren't good enough and that were that, I'd be impressed with the President at this point. It's hard to fold when you already have a lot of cash on the table and to do so takes guts. Instead Obama is pretending that his team knows any more about the auto industry than the bozos already in charge and is calling rather significant shots.

But I think our main divergence of opinion starts right here (emphasis mine):

"No, it is not the responsibility of government to do that. It is awful nice of government to do that, when they are able to do it correctly, because it helps transition the economy from point A to point B with less stress on other industries, families, etc."

It is most certainly not nice of the government to do that because when the government artificially props up a failing company, they're doing it to the detriment of every responsible company out there. Imagine how much money Ford would be making right now if GM and Chrysler fell into the abyss. Imagine how much the smaller players who have been responsible this whole time would've benefited from buying up the bits and pieces of the GM and Chrysler carcasses at rock bottom prices. All of the technology and real estate and any part of the workforce that is worth what they're being paid.

If people are out of work and even if they need to be retrained in the meantime, I have no problem offering temporary government assistance to make that happen. THAT would be nice of the government. You lost your job but we're going to help you get a new (and possibly better) job.