I’ve been listening since the election to the national “discussion” of the automaker bailout and I’m not the only one who’s noticed it sounds like the “discussion” we had before the Iraq invasion. “Either-or,” again and again. It’s played out like this, “If we don’t give the Big Three Automakers another $25 billion dollars, the United States will swirl down the drain.” The other side counters with, “If we give The Big Three another $25 billion, it will be the end of the Capitalist model.”
As near as I can tell, we need six pieces of unequivocal information which are not, apparently available:
: are The Big Three “toxic” and are they equally-toxic?
: would a loan of $50 billion dollars ensure that The Big Three are market-competitive in five years?
: what structural changes have to be made in their physical plants and business models to ensure they’re market-competitive in five years?
: are there viable buyers and/or investors for The Big Three? If not, what makes Paulsen and the Treasury Department believe that We The People want to invest in a raggedy Wonderland?
: how long will it take to create green manufacturing jobs for people clobbered with job losses?
And, just because we should be alarmed by the increased vilification of the poor, working poor and middle classes:
: how did workers’ wages and insurance premiums destroy The Big Three? Workers were being paid to build products nobody wanted. Successive generations of families worked in the same plants forty years or more. It was one of the few corporate sectors where “trickle-down economics” actually benefited workers as well as CEOs. Auto workers set a standard for participating in our economic booms and after forty years of feeding the economy with the products they bought, the homes they built and the children they sent to college, they’ve earned better than bankruptcy when their employers “bail out” of their pension and health care contracts. Our economy runs on the notion that “workers” will earn enough to have “expendable income” which they will use to “consume and invest.” How did we achieve a topsy-turvy understanding that blames worker/consumers when corporate profit margins for worthless products exceed all rational models?
Why isn’t the information we need for good decision-making available in discussable form? Economic journalists have morphed into “opinion” journalists. I read Robert Reich, Thomas Friedman and Paul Krugman and for balance, I watch CNBC. The analysts are just as frightened as the rest of us and I’m tired of hearing the same “mushroom cloud” analyses we heard before the Iraq invasion. If I hear “economic Armageddon” or “world-wide meltdown” one more time from trusted analysts….
Instead, I want to hear from Buffett and Soros. I want a team of their analysts to audit the automakers. I want an analysis of each company’s future viability. I want to know the conditions they need to meet in order to be market-competitive. I also want to know what they’ve done with the first $25 billion they were given besides tuck it in their back pockets. Why is that money collecting interest in their corporate accounts? I want those interest dollars reimbursed to a Green Manufacturing and Job Creation Fund. (Relatedly, every single person whose job is threatened should be enrolled in all-expenses-paid educational programs today. Let’s make sure every single community college and BOCES offers vocational training in computer- and green-based manufacturing because there are other sectors on the brink of failure. Hospitals, for instance, are in desperate straits and everyone knows we have a nursing shortage. One reason for that is the huge number of good nurses who’ve run screaming out of hospital work because the system is cruel and unusual to patients and workers. Clean up the system and the “nursing crisis” will evaporate.)
Sorry for that sidetrack.
Structural changes to The Big Three’s physical plants and business models. I want a full-blown analysis of both these areas for each of the Three. I don’t want another bundle of toxic assets. Is there a law of magneto-physics that links the three inextricably?
The team of analysts who audit The Big Three should include representatives from green manufacturing sectors, autoworkers and anyone who sold their patent rights to the automakers — anyone whose bright idea so threatened the automakers that they bought the patents and buried them under a pile of over-priced and poisonous vehicles. Let this team of analysts examine the physical plants cooperatively. Let them tell us what’s possible. I’ll bet there are hungry and innovative enterprises fully-capable of building a better mousetrap in abandoned car factories all over this country. All they need is the investment capital that, heretofore, was siphoned off by the companies at the top of the heap. In fact, I’ll bet innovators are already buzzing with brilliant ideas as I type this. I’ll even bet there are stymied Ford engineers and line workers with boxes of great ideas that have been trampled in the race to the mediocre bottom. Maybe innovative employees could create a research, development and implementation plan. In the meantime, let the bean counters do their work. When the chickens are counted, let’s invest in the demonstrably best bet.
Presumably, after offering its cost analysis, this team of structural and financial experts would be able to provide business plans for retrofitting the abandoned factories for a variety of industrial purposes. Hell. I’ll bet there’d be investors all over the world lining up — anything to keep the US economy intelligently afloat. (I wonder what the rest of the world will trust us with next.)
Plenty of respected economists believe we don’t have time to do a thorough analysis of the companies’ financial prospects. In point of fact, we don’t know our timeframe, do we? We have claims and counter-claims without verifiable proofs. Our distrust is one price of being lied to for eight years. It’s one price of all the dead and maimed in Iraq. Regardless, if it’s too late for a thoughtful analysis, then it’s probably too late, period. Supporters of The Big Three Bailout cite their increased European profile and the fact that GM makes more 30+ MPG models than any other company. (Their sales lag but their production is up.) I’m not convinced we should let them fade away. I’m not convinced we’d be nuts to invest in The Big Three; but we do need to know if they can be market-competitive in five years or if they’re hopelessly behind the eight ball.
Soon, there’ll be a lot of soldiers coming home. Among the many things they’ll need, fair-wage jobs have to be a priority. Are the automakers — America’s industrial backbone — going to provide those jobs?
No? Then perhaps we need to answer the question: what are the viable alternatives? Should we throw good money after bad for, perhaps, the sake of egocentric nostalgia? At our root, isn’t this more a referendum on what it means to be American? Aren’t we afraid of what we’ll see in the mirror (or what else we’ll cede) if we admit publicly that we don’t make cars anymore? Don’t we need a stronger backbone for our US economy than what’s been provided by The Big Three?
* * * *
How did teachers, plumbers, farmers and nurses outwit bankers, lawyers and their maze of legal documents to create the mortgage meltdown?
Why aren’t AIG’s hyenas in jail instead of lolling poolside with private masseuses and standing in front of Congress with their hands still out?
Why aren’t rating agency employees (Moody’s, Standards & Poors, Fitch) who colluded to award falsely high grades to toxic bundled assets in jail?