Did Populism and the UAW Take Down the GM CEO?
Earlier this week our president did the unthinkable: he waded into the private sector and "fired" the CEO of General Motors as a condition for federal aid. This is a dangerous course of action. So dangerous, in fact, that frenemy Vladimir Putin warned against such an economic recourse back at Davos. So dangerous that even China warned the United States that government control of shaky non-financial institutions was not the panacea - because if it were it would have worked all the previous times, in all the other countries in which such an economic plan was tried.
Some have remarked that there is a bias against Detroit. You're damn right there is - but not in the populist way that you may think. Sure, it's been fun to rail away at the banks, at Wall Street, at these white-collared executives. It's so easy to resent someone who makes more than you, who has more authority than you; and what better way than to manipulate these feelings of unrest, what better way to bottle up these emotions for use as a political ploy than to appeal to these very resentments? Populism is a tool by which many have controlled the proletariat - yet few amongst the proletariat have ever truly benefited from these actions.
When I say there is a bias in Detroit, I'm talking about the bias against the auto executives. I don't want to invoke party lines here, but the majority of Democratic lawmakers were against forcing the UAW to meet any concessions. Automakers wanted the unions to restructure so as to try to reduce costs.
The two factors that brought down Detroit? Government's excessive regulation and excessive union costs. I say this as a daughter of a union, auto-making family and the progeny and wife of a gearhead(s).
We have people in government who can't even change their oil meddling in the private sector, telling employers how to manufacture their products; we have congressional leaders demanding that automobiles use less natural resources by doing things like increasing the production of electric cars - except from where do they think electric power originates? Hogwarts? No. Electric power comes from COAL PLANTS. In fact, the U.S. Department of Energy says:
The low cost and abundance of coal is one of the primary reasons why consumers in the United States benefit from some of the lowest electricity rates of any free-market economy.
I wonder what will happen to the cost of electricity and hybrid vehicles once President Obama has his cap-and-trade program passed. That's rhetorical. I digress. But it does make for an interesting scenario because demand for these and other automobiles will exponentially decrease as the cost of powering them skyrockets. This will further cripple Detroit.
The other factor is the soaring costs of the unions. On average, UAW workers earn $44.60 more in wages and benefits than other families. UAW president Ron Gettelfinger refused to compromise on the pay structure and essentially demanded that taxpayers accept it as it is: double that that of Honda or Toyota. This is an outrage. My family and I have supported the auto industry our entire lives purchasing only American-made automobiles only to have it brought down by the heads of an organization whose very members we have always supported? Our economy has to tank further so these employees can enjoy disproportionate wages? I KNOW what these workers earn. As I said, these people are my family, my community. I will not be lectured to by people like Nancy Pelosi over the viability of restructuring the union pay scale.
Our president chose to not address the problem; the mob wanted a sacrifice. There existed leftover outrage aimed at white-collared bankers; it's easy to transpose that onto the white-collared Rick Waggoner. This allowed the administration to avoid censuring their voting block in the UAW while satisfying the cries for change. Nothing has changed. The problem hasn't been addressed. The same regulations that suppressed free market growth are still in place. The UAW was excused from having to meet any concessions. Now we have a Car Czar. Expect the situation to worsen.
To compound the matter further, Obama announced that the United States government was insuring GM warranties. Says Kim Priestap:
In other words, you the American taxpayer will be paying for your own GM warranties. Your taxes will just be recycled through the government first before they're sent to the dealerships to pay for warranty work. So, taxpayers would be smart to avoid purchasing GM vehicles all together in order to save themselves some money.
Sure, there were some poor business decisions made by the execs, but none so bad as to merit a punishment greater than those who created the meat of the problem. But what does Waggoner expect: he was one of those who crawled on his hands and knees to Washington to ask for taxpayer dollars. Bad move number one. (Kudos to Ford who refused.)
We cannot let them fail, however, and we also cannot allow the UAW to pull off a coup - that is the first thing that needs to happen. The second thing is for us to tell congress to BACK OFF dictating how private (though not so private anymore), non-financial entities manufacture their products; or, before they start jacking up the cost of energy they need to actually have viable, proven alternative forms of energy in place, not speculation, no guesstimations. Yes, I'm all for being a good steward of my environment, but I'm not going to turn a blind eye to the fact that our current forms of energy are more plentiful and their output is far greater and more effective than the proposed alternative energies. This isn't denying the potential of those energies, but it is being honest about their current state and whether or not they are applicable to our market.
Do you realize that if we lose this industry, the industry which has cemented our status as the world's economic superpower, that this is one more area in which we will fall behind other countries? I don't want to end up importing more products, in this instance, cars, from other countries when we have the ability to produce them here. This is an erosion on our ability to SELF-SUSTAIN.
Tim Geithner met with congress last week to ask for an increase in presidential authority to "seize" non-financial institutions who are on the verge of collapse (which was left undefined) and could affect the economy. I don't want our industries to fail but the fate of what's happening to them right now could possibly be even worse than an economic death.
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