This morning brings the frightening news that the U.S. Senate defeated the auto "rescue" bill passed handily by the House and negotiated with the White House. Make no mistake, this was pure political posturing on multiple levels.
And let's be clear also that Washington's politicians are gambling with the jobs of an estimated three million American middle class JOBS. And we've already discussed that there will be no economic turn-around without a turn-around in J-O-B-S. So what gives?
First, the pure politicking. Senate Republicans are taking credit for defeating the bill, and Minority Leader Mitch McConnell was quoted this morning on The Today Show blaming the unions' refusal to lower their wages by about $4/hr (from $27 to $23) immediately as a condition for the loan. Let's take a moment to appreciate how hypocritical and destructive this posturing really is.
American auto unions, despite their politics, are all about American working middle-class jobs. Period. And that is all you need to know in this current economic crisis. That means those jobs must be protected. Period. Period. And that doesn't include the other 2.5 million American jobs threatened by Congress's abject failure to lead.
Seriously, is congress going to destroy, or even threaten right now, 3 million jobs over $4/hour after the obsceneties of greed being subsidized by congress already? (Think AIG.) Really?
Furthermore, surely I'm not the only one who sees the hypocrisy of "small government" Republicans in the Senate trying to micro-manage private enterprises whose biggest political sin was to get "too big to fail," but who have been aided and abetted by congress for decades. This is crass partisan opportunism, and I don't care who does it, it is unAmerican and it is wrong, and it is a threat to us all.
Now is not the time to put the American auto manufacturers under a political microscope to try and diagnose and force change that has not occurred in the last 30 years. Now we are in an overall economic crisis, and we need every job we can keep. It is far more efficient to keep jobs than to create new ones. We are shooting ourselves in the thigh if we let any industry in America fail right now. Once the crisis is under control, then I have no problems with Congress revisiting its regulatory posture in any industry it chooses.
Should unions be scrutinized? Yes. Are American unions part of the car companies' problems? Probably. But they're not all of it. And to think that forcing a drastic wage cut -- in this economic crisis -- is somehow smart politics or smart business, without forcing a comprehensive change plan that is impossible to create in any reasonable amount of time in this crisis (GM says it may be out of cash by the end of the month), it is just the height of political stupidity or opportunism or both. And it disgusts me, not as a partisan, but as an American.
Without a turnaround in jobs, there will be no turnaround in the economy, and that includes housing.
The ironic part of this is that the failure of the bill may put political pressure for the president to use TARP funds (the $750 billion authorized in October with oversight required but still not yet enacted) for the auto companies. With AIG executives fighting for multi-million dollar "retention" incentives (aka "bonuses") all with taxpayer money, I don't see the problem giving the car companies $15 billion of the $750 billion for a bridge loan to keep them in business and 3 million Americans at work. And ironically, a Republican president may use those funds to cover the failure of congress to respond, over the objections of Republican senators, which will result in virtually no restrictions at all on the auto-makers in exchange for the government funds.
And frankly, that's the correct way to go..... if Wall St needed $750 billion with no questions asked and no restrictions, as the Treasury argued in September, then why in the world does it not make sense for the auto-makers to need $15 billion to maintain America's manufacturing base that underpins 3 million American jobs? Bottom line: the government can and should put the auto-makers under a microscope when the economy has stabilized again. It is the failure of congress that they haven't cared about American manufacturing for 30 years now. And now is not the time to put 3 million American jobs in that political crucible.
To even posture that it is that time is obscene, unAmerican, crass, opportunistic, partisan, and downright spiteful toward the dwindling and suffering American middle class.
If the auto-makers fail from political malpractice and economic treason, nobody should be surprised when Wall Street is flooded with 3 million unemployed Americans bearing pitchforks and torches.