Friday, November 21, 2008

Government sends message to auto industry

70% of the Union members in Michigan voted for Obama is the exit polls are accurate. They may or may not be, but it's probably close. I know the UAW push was probably close to unprecedented, and was a major reason for Obama's win. The thanks given for that? Their best ally losing his committee chair.

But we all the know the real controllers among the democrats isn't the David Bonior wing or John Dingell wing of the party anymore. It's the foreign car lovers and American car haters and rich leftist elitists of San Francisco and Hollywood. Nancy Pelosi and the worst of them all in Henry Waxman. Waxman hates freedom and wants to ban everything for one reason or another. Be is free speech, smokes, trucks, SUV's, or especially guns. The worst of the worst of the left.

""If someone is so fearful that they are going to start using their weapons to protect their rights,it makes me very nervous that these people have weapons at all." - Waxman on MSNBC

And I'm nervous that this fascist has a major committee chair. People like Waxman are the reason why we need the ultimate check and balance - the Second Amendment. No, that's not a threat. It's a caution because if the Waxman crowd get everything they want their utopian view of society - that's when we'll need it. Until then, we still have the ballot box and the courts. Checks and balances.

The democrats just kicked out a sane democrat for this fascist, Waxman. John Dingell was an old time liberal. He was too independent for this spot. Mr. Universal Health Care himself wasn't leftist enough for this position. Why? Because he liked the evil auto industry. He didn't completely drink the global warming flavor-aid. At least not at the expense of his district. For that, the longest serving member of congress gets pushed out to pasture. That's the change on the horizon by the democrats. From a liberal like Dingell to a fascist like Waxman.

Now back to the Big 3 and the debate on bailouts, etc. I saw this interesting piece from Pat Buchanan. Buchanan's not always right on some things, and goes further than I do in some areas, but when it comes to trade issues, he's right on the money. Government taxed and regulated the hell out of manufacturing at home, and forced them to compete with both hands tied behind their backs against foreign competition.

Who killed the U.S. auto industry?

To hear the media tell it, arrogant corporate chiefs failed to foresee the demand for small, fuel-efficient cars and made gas-guzzling road-hog SUVs no one wanted, while the clever, far-sighted Japanese, Germans and Koreans prepared and built for the future.

I dissent. What killed Detroit was Washington, the government of the United States, politicians, journalists and muckrakers who have long harbored a deep animus against the manufacturing class that ran the smokestack industries that won World War II.

As far back as the 1950s, an intellectual elite that produces mostly methane had its knives out for the auto industry of which Ike's treasury secretary, ex-GM chief Charles Wilson, had boasted, "What's good for America is good for General Motors, and vice versa."

"Engine Charlie" was relentlessly mocked, even in Al Capp's L'il Abner cartoon strip, where a bloviating "General Bullmoose" had as his motto, "What's good for Bullmoose is good for America!"

How did Big Government do in the U.S. auto industry?

Washington imposed a minimum wage higher than the average wage in war-devastated Germany and Japan. The Feds ordered that U.S. plants be made the healthiest and safest worksites in the world, creating OSHA to see to it. It enacted civil rights laws to ensure the labor force reflected our diversity. Environmental laws came next, to ensure U.S. factories became the most pollution-free on earth.

It then clamped fuel efficiency standards on the entire U.S. car fleet.

Next, Washington imposed a corporate tax rate of 35 percent, raking off another 15 percent of autoworkers' wages in Social Security payroll taxes

State governments imposed income and sales taxes, and local governments property taxes to subsidize services and schools.

That's the left hook. Here's the kick to the head.

And under the 14th Amendment, GM, Ford and Chrysler had to obey the same U.S. laws and pay at the same tax rates. Outside the United States, however, there was and is no equality of standards or taxes.

Thus when America was thrust into the Global Economy, GM and Ford had to compete with cars made overseas in factories in postwar Japan and Germany, then Korea, where health and safety standards were much lower, wages were a fraction of those paid U.S. workers, and taxes were and are often forgiven on exports to the United States.

All three nations built "export-driven" economies.

The Beetle and early Japanese imports were made in factories where wages were far beneath U.S. wages and working conditions would have gotten U.S. auto executives sent to prison.

The competition was manifestly unfair, like forcing Secretariat to carry 100 pounds in his saddlebags in the Derby.

Japan, China and South Korea do not believe in free trade as we understand it. To us, they are our "trading partners." To them, the relationship is not like that of Evans & Novak or Fred Astaire and Ginger Rogers. It is not even like the Redskins and Cowboys. For the Cowboys only want to defeat the Redskins. They do not want to put their franchise out of business and end the competition -- as the Japanese did to our TV industry by dumping Sonys here until they killed it.

While we think the Global Economy is about what is best for the consumer, they think about what is best for the nation.

Like Alexander Hamilton, they understand that manufacturing is the key to national power. And they manipulate currencies, grant tax rebates to their exporters and thieve our technology to win. Last year, as trade expert Bill Hawkins writes, South Korea exported 700,000 cars to us, while importing 5,000 cars from us.

That's Asia's idea of free trade.

How has this Global Economy profited or prospered America?

In the 1950s, we made all our own toys, clothes, shoes, bikes, furniture, motorcycles, cars, cameras, telephones, TVs, etc. You name it. We made it.

Are we better off now that these things are made by foreigners? Are we better off now that we have ceased to be self-sufficient? Are we better off now that the real wages of our workers and median income of our families no longer grow as they once did? Are we better off now that manufacturing, for the first time in U.S. history, employs fewer workers than government?

We no longer build commercial ships. We have but one airplane company, and it outsources. China produces our computers. And if GM goes Chapter 11, America will soon be out of the auto business.

Our politicians and pundits may not understand what is going on. Historians will have no problem explaining the decline and fall of the Americans.

Some of us have seen this coming for a long, long, time.


Jason Gillman said...

As to Buchanan, I am exactly where you are. And this piece is one of his better ones.

We have seen debate on whether we bail or not to the point of nausea, and my free market instincts say nay.

We truly need to get off our manufacturer's backs if we EVER want a healthy manufacturing base.

keithr said...

As a conservative I am opposed to bailing out failing industries. But there are issues I'm struggling with:

1) In the last few years the government has spent hundreds and hundreds of billions of dollars on bailouts after natural disasters. I think it's fine to help rescue people and such, but what about all these massive aid (i.e. bailout) packages to help rebuild? The people who live in these dangerous areas know the risks, so why shouldn't they be required to have private insurance or suffer the consequences?

2) The government is in the process of spending close to a trillion $$$ to bail out the financial industry. Why should the government be picking winners and losers.

3) The government shares a LOT of the blame for causing the financial crisis.

So I want to know why, after blowing a couple trillion dollars in the last few years, does the government wait until the Big 3 ask for loans before they decide all this aid business is a bad idea?

Also, allowing the big 3 to fail suddenly and completely will ultimately cost the government much more than helping them last until the credit crisis ends. Congress needs to take into account all the costs from the workers that end up on food stamps and welfare, the cost of taking over the failed pension plans, the cost of taking over the health care costs of millions of newly uninsured, on top of all the lost tax revenue. And all this aid will go way, way, beyond the big 3.

Add to this the timing issue: if this failure were happening in a strong economy it would be enough to cause a U.S. recession. But the U.S. is already in the midst of the greatest economic crisis in decades. Failures of this magnitude piled on top of the current crisis could easily push the U.S. economy into a 1930's style depression.

It is estimated that 3 million people will lose their jobs from the big 3 and all the companies that provide parts, materials, and services to them. Many of these 3 million people will default on their home loans and credit cards. The stocks and bonds of these soon to be bankrupt companies are owned by banks and pension funds. Could all these financial institutions withstand these additional blows on top of the current problems? Or will they be forced to return to ask for additional hundreds of billions of dollars in bank bailouts?

Overall, the conseqences will be much more severe than many in D.C. realize, and it is possible that making loans to the Detroit auto companies would actually be the cheapest solution in the long run.

Jameson said...


Rep. McCotter has been on the forefront of this issue and provides insightful clarity on both bailouts (Paulson and auto). Please let me know if you'd like to receive his latest releases and video clips to digest and perhaps post.


Jameson Cunningham
Press Secretary

J said...

Sorry Dan, you miss one very, very important point-

All the other countries have National Health Care, paid for separately, and not tacked on to the price of the car.

Import cars in their economies pay a value added tax to be imported, while we don't charge a VAT here.

So a german, or japanese, or korean car here costs 3K less, simply because the cost of health care is not included in the price.

Which is one more argument for national single-payer universal health care.

We need to institute national health care system applied equally to all; computerized standardization of health care records; charge a reciprical VAT tax to imports at the same rate they charge us, and then we'll have a level playing field.

Oh yeh- and renegotiate a new trade deal with South Korea. We import 700,000 cars a year from them. They import 700 cars from us. We need something to equal that out.

Bachbone said...

I have friends who live in Scotland, J, and they know all about your "National Health care" or "single-payer universal health care." You should, too, if you paid any attention to Hillary Clinton's atttempt at ramming it down our throats when she was co-president, or even if you know anything about Canada's health care. My friends in Scotland tell me horror stories about waiting weeks or months for a CT Scan or MRI, even if it might be for something that could be serious. Would you want your child to wait weeks or months for one? Have you ever been inside a UK hospital to compare the wait time, conditions or services to an American hospital? My Scottish friends have, and from what they say, you likely won't like the switch. Essentially, health care is rationed by single-payer systems.

Remember Hillary's plan? The government would force doctors into certain specialty fields and places to set up their practices, based on what the government felt was needed, not what doctors wanted to practice. Patients would not be allowed to go see just any doctor they wanted, even if they had the money to pay for the visit themselves. If the patient arranged such a visit secretly and the doctror accepted it, the doctor could be arrested for doing so. Would you like the government to control your health and life to that extent, J?

If you would, you are quite free to avail yourself of those services just by moving a few hundred miles to Canada. But don't ask me to submit to someone else's controlling my health to the extent that I have no say over whether I can have any doctor or hospital I want look at me if I have the money to pay for it.

Oh yeh - and don't tell me I have to pay the "skilled" UAW members higher wages than college professors just because idiotic Big 3 management 40 years ago caved during contract negotiatons when there was no competition and it could raise sticker prices to cover whatever it threw the UAW's way. I've found the pop bottles and half-eaten sandwiches left inside car doors by UAW "skilled workers," but never found so much as a discarded screw in a Honda, Toyota or Kia I've owned. I've been to Big 3 assembly lines and seen the "skills" it takes to assemble a vehicle. (The UAW used to brag it helped build space shuttle, too, until Chellenger blew up. That ad got pulled in a nanosecond.)