Modern Advertising/Propaganda artists are masters at finding the illustrative image. Republicans in the House and Senate found their's last night. Noting that the Big Three Executives all came to Washington in Private Jets they let go with a circular firing squad, with America in the middle.
The fact is that the executives of the big three simply don't deserve much pity. They have been operating in comfortable isolation surrounded by sycophants and obsequious toadies for most of their tenure. Whether their companies go down in flames or they continue, most of them will remain relatively comfortable. Much of their paper wealth will burn off, but they will in all likelihood retain homes, food, clothing, all the basics. Not like their middle tier white collar, and blue collar employees. Those folks stand to lose their jobs, their health care, their survival. It's that stark.
Still the image is apt. The truth is appalling. The Republicans are right. The big three don't deserve a "bailout". Those companies probably deserve an execution and a quiet burial. Maybe a plaque to their accomplishments at their former headquarters buildings.
However, the Republicans are right, but they are right for the wrong reasons and their 'solution' is wrong. The fact is that the Big three got to where they are through a whole series of strategic and policy blunders; many of them aided and abetted by the political system. Policy encouraged and supported low gasoline prices based on borrowed money and inports. Policy encouraged cheap credit, and flooded money into the hands of a minority of Americans so they could afford status symbols; which they mostly bought from the Big Three. Policies encouraged gas guzzling cars, discouraged energy savings, and allowed the Big three to depend on SUV sales. Policy made it hard for them to compete against imported auto manufactures.
Honda and Toyota pay high wages, but don't have unions. Policy allowed but did not make GM, Ford and Chrysler top heavy companies with over-priced executives. That was their own policy. Policy allowed but did not make them so incredibly arrogant, isolated from their workers, or unwilling to invest in modernization. In short they shot themselves down. We need to save the Auto Industry, but we do not need to save Chrysler, Ford and GM to do that. The UAW is not the cause of this financial meltdown, and it should not be the target of the executives and their mouthpieces as targets of opportunity, but they will probably have to take hits in the reorganization that those companies desperately need. No, Congress was right to take potshots at those airplanes. They are images of 30 years of socialization of costs and privatization of profits.
Perhaps Chapter 11 is the next step. Congress will have to revisit the issue in January when the the Executives, presumably will have given up their personal jets.
Chris
Posted by cholte at November 20, 2008 07:03 AM