Apparently the Bush Administration thinks the government can run a car company better than the longtime American auto executives who they charge with being unable to "come up with" a viable solution for success. In exchange for the $17.4 billion in short term loans offered to General Motors and Chrysler, the Big Three have to reduce their wages to the level of foreign automakers operating in the United States.
But President Bush and his previous policies have already unfairly burdened the Big Three with hypocritical conditions which are akin to strapping 5 lb. weights to the arms and legs to American Olympic swimmers and then demanding he or she find a way to become "competitive" with foreign Olympic swimmers with no weights on their arms or legs.
If you're thinking I just blindly back American automakers and can't stand it when a foreign company gains an advantage over them, you would be wrong. I only can't stand it when foreign companies gain a financial advantage unjustly. I simply detest injustice. It's even worse when foreign companies unjustly gain advantage over American companies because of U.S. government trade policies that have stacked the deck against U.S. companies. Consider the following.
According to economist Pat Choate, who was also Ross Perot's running mate in 1996, India's tariff on imported U.S. vehicles is 100 percent. China's import tariff is 25 percent. South Korea has routinely run tax audit campaigns against foreign car buyers (cars foreign to South Korea).
In these regards, the United States is far from protectionist. If American free marketers want to rally against protectionism, they should travel abroad and rally there, because comparatively it doesn't exist in the United States.
President-elect Obama recently stated "If jobs and incomes are our yardstick, then the success of the American worker is key to the success of the American economy." If that's true, and I believe it is, then the hypocritical haters of the Big Three need to be quickly and firmly rejected and discredited.
One of the big problems in today's society is that have we not only become greedy but we've also become selfish. If a worker in another industry is able to bargain for better wages, we're against it because we have the opinion that it makes us pay more for their product or service. If we're going to have this kind of outlook, then we should all call for all of our wages across the country to be immediately and significantly reduced since the higher the wages each of us earns in whatever good or service we produce or contribute to causes the rest of us to pay more.
If you're a teacher and you get a raise, I have to pay higher taxes or take on a heavier tax load (theoretically) from a higher national and/or state tax burden. If you're a construction worker and get a raise, that means I have to pay more (theoretically) for houses. If you're in the military and the government decides to give more money to our troops in combat in Iraq and Afghanistan, that means (theoretically) I have to pay higher taxes. Does that mean I should be against higher wages for Americans, other than for myself, of course? No. But many of us Americans would allow for raises for ourselves, which would make others pay more, but we would decry them for others because it would make us pay more. Hypocrisy runs rampant.
But you see this is the precise stance of too many Americans and definitely too many in our United States Congress, especially a few choice Southern senators.
U.S. Sen. Jeff Sessions (R-AL) made the comments below on December 19 about President Bush's plan to use Troubled Asset Relief Program (TARP) funds to aide American automakers:
"Unfortunately, the president's proposal enables the involved parties to continue to avoid some of the tough choices necessary to become competitive."
Sounds just fine, doesn't it? Unless you realize that Sessions' idea of American workers becoming more "competitive" means lowering their wages and gutting retirement and health care benefits. But don't senators usually campaign for higher wages when they're running for office? Here's what Senator Sessions said back in July 2006:
"We paid $200 billion last year for foreign oil and gas--$200 billion, wealth that Americans would rather see invested in our country, hiring Americans to produce oil and gas. They would pay taxes and be able to raise their families, have high wages and good retirement plans and good health care plans." (my emphasis)
It's apparent that Alabama Senator Jeff Sessions is for higher wages for the American people except when it is for workers who happen to work for an American automaker in another state. Maybe because foreign automakers have built plants in his state? Maybe because he doesn't like the UAW? This exposes a glaring example of the dangers of foreign influence in our economy. U.S. senators are perfectly willing to sell out the broader American economy in the name of local foreign influence. Chinese newspapers are already reporting that if the American automakers fail, they stand ready to buy them. Are you ready for a Chinese Corvette, race fans?
In today's super-unstable economy, what could be more mindless than taking a sharp scissors to one of America's last standing safety nets? Haven't we all seen the value of our 401(k)'s plummet? And now we want to unilaterally usher in the failure of one or more of the few companies left that are actually paying pensions for their employees? Not only are we allowing it to happen, many of us are adamantly demanding that it come to pass. Do we think we'll all be better off if GM, Ford and Chrysler default and transfer their pensions to the taxpayer-funded Pension Benefit Guarantee Corp (PBGC).
On Face the Nation on December 7, Senator Dodd rightly pointed out that "Just pension costs alone could total hundreds of billions of dollars that would fall on the back of the American tax payer."
What are we advocating here? Do we not want to have the Big Three survive so they can continue to provide health care and pensions for their employees? GM spent $5.2 billion on health care for the workers and retirees in 2004 alone. Would you rather that burden be transferred to the taxpayer instead? Would you rather American auto workers get pennies on the dollar for their pensions via the PBGC and make them choose between food and medicine for the rest of their lives? How will these retirees be able to buy the goods or services that you are involved in producing?
I really hope Obama is successful in creating 2.5 million jobs by rebuilding America's infrastructure, which is totally necessary given a 2005 American Society of Civil Engineers report that concluded the U.S. faces a deficit of $1.6 trillion for things like power grids, wastewater and drinking waters dams and systems through 2010. But even if he is successful, we'll still be half a million jobs in the hole if we lose 3 million jobs through the failure of the Big Three. And that doesn't even take into account the exploding trade deficit that will result.
By the government's own statistics, we find for every billion dollars in trade deficits, we lose about 15,000 American jobs. Even with the current meager American auto demand, the foreign transplant factories in America won't be able to supply all the vehicles Americans want to buy. And of course there are many of those like myself who would rather drive a used American car than buy a new foreign one any day.
The 105 domestic factories owned and operated by GM, Ford, and Chrysler can't be taken over and converted overnight by foreign companies to churn out enough foreign nameplates to meet American demand. And even if foreign companies could buy up all those hollowed-out American factories for production, why would they? To do that, they would have to shutter their plants at home and face the ire of newly laid off workers in their home country in a global economic slide that's seeing employment in nearly every industry go downhill.
The only reason foreign companies are producing in the United States anyway is so they won't have to face import tariffs should the United States finally wake up and turn protectionist to level the playing field.
Back in May, 1995, top economic advisers to President Clinton recommended tariffs ranging up to 100 percent in retaliation for Japan's refusal to open their market to American vehicles and auto parts. Automotive exports from Japan represented over 55 percent of America's $66 billion trade deficit with that country in 1994.
Then there's the hypocrisy of those who hate the Big Three just because some of their workers happen to be members of organized labor who actually have the gall to bargain for things we used to be able to afford and take for granted in this country like health care and company-provided pensions. I do understand the anger behind the jobs bank program, but most of the rest of the demand to force Americans to work under more competitive pressure for less job security and less pay amounts to little more than union busting.
Don't the hypocritical haters of the Big Three realize there are plenty of salary jobs to be killed along with the unionized hourly ones? It takes nearly 20 months to research, design, engineer, and develop a car and about 20 months to assemble it, and the Big Three haters want us to believe 100 percent of the American automotive workforce punches a clock every morning wearing shirt with blue collars?
What about all the non-union parts suppliers, many of whom will go bankrupt along with the Big Three, making it impossible to supply parts to build all the foreign cars so many Americans supposedly want to buy? What about all the auto dealers and their employees donning dress shirts and ties daring to greet you when you step onto the car lot? Are all those Big Three employees engaged in administration, testing, and advertising all carrying union cards? Doubtful.
I can even understand the anger of seeing the Big Three executives flying into Washington on corporate jets. But the hypocrisy of vilifying Wagoner and company is magnified according to an Associated Press article on December 21 that detailed how six financial firms that received billions of bailout bucks still fly on fleets of jets that shuttle executives to personal destinations as well as company events. Where is the corresponding outrage on that? Can't we all agree on the firms we should patronize that lend money Americans really want to borrow?
So while Republicans in the South are busy trying to stick it to the Big Three, they're ensuring unemployment rates stay high, social services remain overburdened, and the backbone of the American manufacturing economy remains threatened.
Maybe republicans need to revisit some of their past political platforms to see what they used to stand for. In the 1896 platform, these words represented the republican party:
"We renew and emphasize the allegiance to the policy of protection as the bulwark of American industrial independence and the foundation of American development and prosperity. This true American policy taxes foreign products and encourages home industry; it puts the burden of revenue on foreign goods; it secures the American market for the American producer; it upholds the American standard of wages for the American workingman; We demand such an equitable tariff on foreign imports which come into competition with American products as will not only furnish adequate revenue for the necessary expenses of the Government, but will protect American labor from degradation to the wage level of other lands."
I still hold out hope that justice will prevail and the Big Three won't continue to be singled out and vilified while foreign automakers are glorified. For today it was reported that Toyota is forecasting their first operating loss in 71 years because of plummeting demand. Maybe it's because they're not building cars Americans want to buy.
Roger Simmermaker is the author of How Americans Can Buy American: The Power of Consumer Patriotism. He also writes "Buy American Mention of the Week" articles for his website www.howtobuyamerican.com and is a member of the Machinists Union and National Writers Union. Roger has been a frequent guest on Fox News, CNN and MSNBC, has been quoted in the USA Today, Wall Street Journal and US News & World Report among many other publications, and is now a weekly contributor to WorldNetDaily.