Busted Bailout

So, Republicans in the US Senate shot down a bid by the Little 3 Automakers and the UAW for a hefty infusion of taxpayer cash, leaving the fate of the domestic auto industry in doubt. Republicans demanded even steeper wage and benefit concessions from the UAW on top of what the union had already conceded to.

Lost in the hurried debate about the auto industry is an accounting from the men (and the auto industry is a man’s playground) at the top, the highly compensated and pampered CEO’s of GM, Ford, and -- before it became the plaything of hedge fund managers -- Chrysler. We hear plenty of thunder from Republicans about overpaid UAW members, but what of the obscene amounts of dough the CEO’s pocket every year, regardless of how well or poorly the corporation performs? About that we hear next to nothing because CEO pay in Corporate America is still sacrosanct, a function of the “free-market.”

No, the discussion always centers on blue-collar labor costs, UAW versus Toyota, Honda, Nissan, Kia, between the rusted unionized North and the right-to-work South. But instead of comparing blue-collar costs, why not compare compensation in the Executive Suite? Do the big dogs at Toyota and Honda pull in 400 or 500 times more than the average line worker? Are the CEO’s at Toyota and Honda surrounded by dozens of Vice Presidents, as are the CEO’s of GM and Ford?

Republicans represent the interests of owners and investors, not wage earners, so of course the Republicans want to turn the current situation to their tactical advantage and crush the UAW once and for all. That’s why the narrative runs like this: Ford, GM and Chrysler are collapsing because of greedy union workers who earn exorbitant wages and overly generous pensions and health benefits. Redundant product lines, poor engineering, woeful quality control and middling fuel economy have nothing to do with Detroit’s woes – it’s all the fault of those overpaid blue-collar workers, active and retired.

Somewhere during the past thirty-odd years, starting when Ronald Reagan declared open season on working people, it became a crime for working Americans to earn decent wages in decent working conditions with decent pension and health benefits. With a great shove from Reagan, Labor hit the skids, Capital became ascendant, and Profit replaced equity, fairness and morality. Welcome to the New World Order.

A Republican commandment these past thirty years or so has been that workers are expendable, replaceable, and far easier to exploit when they are prevented from organizing and bargaining collectively. There are laws on the books against union busting, but these laws have tiny teeth and are easily evaded by slick corporate lawyers. Americans experienced years of downsizing and rightsizing, domestic outsourcing, and then, as digital technology shrank the globe, international outsourcing, so that an American in Boise, Idaho in need of technical assistance with an HP printer finds herself talking to a technician in India; the Indians are invariably polite and eager to help, but rarely are these calls concluded without frustration.

The Republican fascination with union busting and cheap labor never came to grips with this conundrum: how can an economy driven by consumption thrive when consumers’ wages are flat or declining? Even at Wal-Mart, Burger King wages don’t go very far, and sooner or later, as we’ve seen lately, easy credit disappears.

But back to the bailout that didn’t happen. One other point deserves mention and that is health care and health insurance; if the United States had a sensible, sane, rational and cost-effective system of single-payer health insurance (that’s insurance, not socialized medicine) would Detroit and the UAW be in the straits they find themselves in today?