Shuler Sacrifices Workers At the Altar of the Azure Canine
ByHeath Shuler’s Blue Dogginess has him backed into a corner. He did not support the $700 billion bailout of the financial institutions, and many applauded his stance due to the no-strings-attached nature of the mind-boggling bailout. Now he’s come out against the $14 billion loan to the auto industry, saying that it’s just too darned pricy and not nearly good enough. Shuler’s press release reads thusly:
“There is no question that the U.S. automotive industry is an essential part of our Nation’s economy. There is also no question that its current business models are not sustainable and the companies must reorganize. I support those efforts and look forward to working with all interested parties – management, labor, dealership owners, and parts suppliers – to ensure the continued operation of the Big Three for years to come. However, today’s $15 billion bridge loan offers little hope for creating that needed restructuring. Instead, it only puts off those difficult decisions for a few weeks, maybe months. That is wrong, just as it was wrong for this Congress to give $700 billion dollars to rescue Wall Street bankers. The job of Congress is not to be the bank of last resort for businesses. It is our job to be responsible with the money of those we represent, and this package does not meet that standard.”
Let’s remember a few things as we gaze with awe upon Dr. Shuler’s strong stance, which conspicuously aligns him with the Carl Mumpower wing of the Republican party.
First of all there are millions and millions of jobs dependent on the auto industry. While I believe that the Big Three have done an absolutely awful job over the last decade, I also believe that we ought not punish American workers for their bosses’ bad decisions. The ripple effects of a failed auto industry in the midst of the our current economic meltdown would be disastrous. If I were king of the world, I’d give the Big Three some of that money and then dump the rest into stimulating the many rising boutique companies who are bringing innovative autos to the market. Shuler’s vote against the loan package does a chest-thumpin’ nothing.
Secondly, this loan, which Shuler’s press release mistakenly labels a “bailout”, has a bunch of strings attached, and we’re quite likely to see every penny return to U.S. coffers. From the SF Chronicle,
“So far, Congress is demanding, in return for $15 billion in loans: a “car czar” to tell the industries what to do with their money, prohibitions on shareholder dividends as long as the government’s money is outstanding, and a government say in the companies’ restructuring plans.”
Lastly, where is the Heath Shuler who’s been a friend to labor? If he’s trying to set up a Senate run by turning his back on the American worker, then what sort of alternative to Republican Richard Burr is he really offering? In the Smoky Mountain News, Shuler reveals an unfortunate duplicity:
Shuler agreed that the most important thing is that jobs be saved, but said he opposes writing the auto industry a blank check.
Unfortunately, Shuler isn’t offering anything that would help to save those jobs. As long as Shuler’s been willing to remain on the side of workers, he’s been given a ton of slack for his more conservative votes. That’s going to dry up if he sacrifices that base of support on an altar of Mumpoweristic economics.
41 Comments
December 11th, 2008 at 12:07 pm
Haven’t we just witnessed the epic failure of ideology over economic reality? Alan Greenspan found a “flaw” in his long-held Randianism. Joe Stiglitz just deconstructed that failure in Vanity Fair. And (whatever the strategy in it) even conservatives in Washington and the country are praising “pragmatism” over ideology as the way forward. Did Heath not get the memo?
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December 11th, 2008 at 1:45 pm
I am happy to hear that Congressman Shuler agrees with me and opposes corporate welfare.
I also hope this despicable interference in the free market is halted in the Senate.
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December 11th, 2008 at 1:50 pm
Oh, and for those still laboring under the misconception that capitalism bears any responsibility for our current financial crises, I offer the best analysis so far:
What Really Happened?
by Lawrence H. White | Cato Institute | December 2nd, 2008
The housing-finance boom and bust are not the results of a laissez-faire monetary and financial system. We didn’t have one…The housing boom and the aftermath of its bust arose from market distortions created by the Federal Reserve, the government backing of Fannie Mae and Freddie Mac, the Department of Housing and Urban Development, and other federal interventions.
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December 11th, 2008 at 1:53 pm
And Yaron Brook debunks the Greenspan meme and further disabuses us of the notion that economic freedom causes financial crises.
http://www.newsweek.com/id/173514/output/print
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December 11th, 2008 at 2:36 pm
And for anyone who still thinks the free market had a hand in the Great Depression:
Politicians caused and worsened the Great Depression
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December 11th, 2008 at 3:03 pm
And the big 3 auto makers squashed electric cars and other alternatives to gas guzzlers like a bug (no pun intended) years ago.
IMO they get what they deserve!!!
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December 11th, 2008 at 3:04 pm
No bailout, no bond, no parole!
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December 11th, 2008 at 5:28 pm
No bailout. Not for the bankers, not for the automobile industry, not for anyone.
If people insist on bailing out these wankers, let them declare bankruptcy first. Then the govt can buy the big three lock, stock, and barrel at actual market value.
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December 11th, 2008 at 5:32 pm
I agree – no bailout – unless I get a bailout. I am going to run out of money in ….. well heck … I am out of money now !!!!
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December 11th, 2008 at 7:24 pm
I don’t equate supporting the Big Three with supporting all of the workers that contribute to these three companies. I have a Honda but it was never shipped here. It was probably built in Tennessee by auto workers there who will not get a dime out of this but who are building well-designed, economical cars.
The Big Three represent a dinosaur industry. They have spent gobs of money lobbying so that they can keep turning out the low mileage SUVs and, as someone mentioned, spent even more to make sure the electric car never saw the light of day. This loan or bailout or whatever to the management of these companies will support the management that has been making awful decisions. To support the workers, we need to make sure that they have unemployment insurance that will last out this cycle we are in, have adequate health insurance for them and their families.
It shocks me to see liberals buy into these trickle down theories of bailing out companies. (Republicans are against this because they oppose the unions. Otherwise it’s their way of doing business.)
We could take fifteen billion dollars and give a low or no interest loan of 10,000 to one and a half million people to help them buy the best American car they can find. And no one can buy a car that gets less than 35 miles per gallon. That would support workers, the environment and it might encourage the Big Three to get their act together.
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December 11th, 2008 at 8:39 pm
Why don’t they just take the 15 billion, make a big pyramid out of it, then set it on fire…it is just as likely to do some good as this latest installment of corporate welfare.
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December 11th, 2008 at 9:01 pm
I read yours, Tim. Just for fun, read David Horowitz’s.
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December 11th, 2008 at 11:25 pm
O.K., o.k.,
So if I’m reading these comments right, folks are saying:
a) Mismanagement shouldn’t be rewarded.
b) The money would be better spent elsewhere.
c) While you’re not supporting Shuler’s rationale, you support denying the loan.
An estimated five million jobs depend on the Big Three. They must pivot in order to compete, and they didn’t. They made big-ass vehicles with bad mileage, and they squandered the profit margin.
However, in an economy that’s tanking, are we really going to tell millions of workers that we’ve got to let them slide into poverty because their bosses suck? I know we can tell them to sit tight and that our alternative companies and foreign-owned, domestic-manufactured vehicles will eventually say, “Come work for us!”. And in the interim, what are these millions of families to do? Go on unemployment? Work at the Quickee-Mart?
$700 billion just got dropped into banks. Nearly a trillion will be dumped into a war in Iraq. And here we are saying that the millions of workers dependent on the Big Three don’t deserve the largesse of the American people? It’s fourteen billion dollars, and that’s a load of cash. In perspective, however, it’s less than a month in Iraq. It’s five percent of what just got dumped into the white collar sector.
If we weren’t at the beginning of a global recession, there’s no way I would go for this idea. But given the circumstances and the strategy, I think we should absolutely do it. While doing so, let those moguls know, in no uncertain terms, that it’s change or die. This is their defibrulation, and they ought not expect any more second chances.
Further, if we’re pouring money to put out mismanagement fires, let’s also have a look at giving grants to those small companies who are offering sensible alternatives.
Bridge loans for the Big Three? Yes. Pouring billions into a global banking industry that played fast and loose? Not so much. It’s crunch time, and unless we can stop the bleeding, we’re looking at a long time in the economic wilderness.
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December 11th, 2008 at 11:28 pm
p.s.
If only we had a few years to do over again, where CAFE standards passed, and businesses understood that they were still subject to the laws of economics. But it’s been the Bush years, and if the Obama years are going to be prosperous, we’re going to have to dig out of the hole we’re left with.
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December 11th, 2008 at 11:48 pm
This is a great idea. I also like the idea of not giving the Banking Industry any money and just offering all those with ARM loans heading for foreclosure a fixed 30-40 year loan at a hell of a good rate. Why don’t these things ever happen? Because the “wrong” people or companies would make money? It sound so simple. What’s the problem?
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December 12th, 2008 at 12:10 am
If only we could have…sigh
If only Libertarian crazed Republicans had not sold the future to profit.
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December 12th, 2008 at 12:11 am
Libertarian..as in contrarian btw
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December 12th, 2008 at 12:17 am
Alright, I’m still a novice at all of this posting stuff so I don’t know how to make those neat quote blocks from prior comments.
Gordon, I absolutely agree that we need to have the government take a role in the downspin that our economy is in right now. I just don’t think that the top down approach or trickle down approach is the way it’s going to happen. Instead of pumping money into banks that have made disastrous mistakes why not invest that money in other banks like here in Asheville with Hometrust or the Bank of Asheville who have played conservative with the money they were given to invest?
And yes, let’s help those small industries who do have the ideas for new kinds of cars.
And as for supporting workers, what about the other workers across the country who are losing their jobs? Why should we give money to the auto management trusting them to get the money to the Big Three auto workers when so many other industries are suffering as well? Yes, we may keep them off unemployment for a while and keep them for looking for work at the Quickee Mart but why would you choose to help those workers out of all the others who are being adversely affected by this economy?
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December 12th, 2008 at 12:27 am
Maybe I’m mistaken about the immediacy and the breadth of the possible unemployment of those millions of people. But from what I’ve read, it looks like those Big Three ships are sinking too fast. Investing in alternatives is a must, in my opinion, but the payoff from that will take years. Until then, what are these millions to do?
So to answer your question, Bob, it’s because the bloc of workers is so large and because the urgency is so great.
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December 12th, 2008 at 12:28 am
The thing I’m most confused about, to be honest, is why the newly-infused banking industry can’t make the loans to the auto industry…
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December 12th, 2008 at 12:35 am
They got the money to prop up their foundation, not to necessarily facilitate the operation of their business.
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December 12th, 2008 at 8:48 am
This stuff is important enough to hold our well-heeled noses and hand these poor bastards a temporary crutch:
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December 12th, 2008 at 9:11 am
No, Gordon, no. Must cut off nose to spite face! All collars are equal, but some are more equal than others. Blue collars good, white collars better!
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December 12th, 2008 at 10:04 am
The empty suit gravy train has derailed. No more handouts!!!
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December 12th, 2008 at 12:32 pm
What about the auto dealers?
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December 12th, 2008 at 12:56 pm
I like what Mtn Style said, but how about putting this twist on it:
Give every American with a car older than ten years (and none newer) a voucher for say, $10,000 to $15,000 and when they purchase a new fuel efficient car, they must trade in that old gas guzzler and noxious fume generator as well. The cars will then be recycled for materials.
Detroit gets more business than the can handle, we get millions of pollution-causing junkers off the road.
Everybody wins!
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December 12th, 2008 at 1:14 pm
I’ll bet that if you talk to some of the older, more established dealerships in the area, some of them will tell you that their businesses started out selling Hudsons, Studebakers, Kaisers, or any one of hundreds of auto manufacturers that have gone out of business since the days when people would yell “GET A HORSE!” to people driving down the street. Some may go belly-up, others will dump their branding altogether and sell used cars. Others still will adapt to a changing market and sell the brands that manage to emerge from the wreckage.
As long as products are being made, dealerships will exist – provided, of course, that there’s a market for them.
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December 12th, 2008 at 2:28 pm
One thing that will be nice – no more annoying car dealership ads!
No more Mac Easler and his redneck ads. Too bad Anderson sells Nissans. It would be nice to see the Family Whore go down as well!
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December 12th, 2008 at 2:59 pm
Gordon Smith wrote:
The only thing that will push us “a long time in the economic wilderness” is government intervention in the free market. The precedent for the disaster of interventionism during a crisis is well documented by many; most recently by Amity Shlaes in her book THE FORGOTTEN MAN.
We most definitely do NOT need to dig out of the hole “we’re” left with. That is the function of the free market. The free market will reward winners and punish losers. I’m not in a hole; and neither are honest business people who have may good business decisions (like paying market wages). Why should the government take our money and pay it to someone else to whom it does not belong and to those who have squandered their credibility in business matters?
Because the industry has been mismanaged and over-regulated into the ground. They’re not profitable and their current business model has no future. If they were indeed a going concern, they should have no trouble getting private investors who want a piece of the Big Three’s future success. The problem: there isn’t one.
That is the function of the free market. The free market wakes people up to their current situation. The auto company’s must file for bankruptcy and restructure or sell their assets to some one else who can do a better job of providing the consuming public with valuable products they can afford. This is not the job of the government.
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Undercover Blue says:
Thanks for reading the articles I posted. And thanks for offering some additional background on one aspect of the government-caused financial crisis.
I read the report from the Federal Reserve that your recommended. I don’t buy it for a minute. Sorry. I don’t buy any reports from the Federal Reserve. The Federal Reserve is the number one perpetrator of fraud in our nation. Their contention that subprime defaults are in line with the others does not absolve the CRA of the damage done. And notice that the Fed offers no alternative explanation. That is because it would implicate their own organization.
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December 12th, 2008 at 4:33 pm
I can imagine how rockin’ it will be to see The Market “stick it to The Man,” as Dewey Finn might say. But AP just reported that three million jobs are on the line if Detroit doesn’t get $14 million in loans after Wall Street got hundreds of billions in handouts. In general welfare terms, what’s an acceptable screwed worker to screwed empty suit ratio?
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December 12th, 2008 at 4:36 pm
Oops, $14 billion.
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December 12th, 2008 at 5:26 pm
Undercover Blue wrote:
Sir: This is a ruse.
What does that mean that “jobs are on the line”? Nonsense. If the auto manufacturers are producing a valuable product, their knowledge, experience and skills will still be needed to produce those products even after the incompetent executives are sent packing.
People need cars. Therefore, people need workers who make cars. For god’s sake, let’s allow this industry to be taken over by someone who knows what they’re doing.
Instead, the government wants to prop up incompetence with corporate welfare.
Sorry. I’m against the whole enchilada. It ain’t dere.
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December 12th, 2008 at 7:45 pm
I did not support the banking bailout, and I do not support the bridge loans. Yes this economy sucks, and it will likely get much worse if many a UAW worker loses their jobs; however, the Big Three hasn’t been thriving for years. Roger and Me is almost twenty years old.
Stop gap measures like extending unemployment and stopping foreclosures are paramount to helping the affected workers, then hopefully there will be big infrastructure spending on the federal level to repair bridges and roads as well as get more public transportation off the ground.
What happens when gas prices jump again? We cannot put all of our eggs into the Big Three basket.
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December 13th, 2008 at 6:43 am
I don’t pretend to know about these things…I’m just a political guy. But I find it interesting that so many Progressives here are agreeing with the Senate Republicans on these bailouts.
And speaking of elephants, the big white union elephant of $75/hour compensation gets no mention here. The auto companies paying more market-oriented wages & bennies are all thriving — in fact, they’re expanding, making money, and adding jobs. No connection?
Methinks the problem is a bit more complex than just corporate shortsightedness and mismanagement.
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December 13th, 2008 at 7:49 am
Michael, you mustn’t believe the $70/hour nonsense:
I don’t think there are any of the folks here “agreeing” with the Republicans. The Republicans who oppose this want to bash the unions. I haven’t heard anyone here say that. What I’m seeing is that people are pissed that if businesses are big enough, then they can be grossly incompetent and get loaned $14 billion dollars. It’s not the same position that the Republicans are pushing.
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December 13th, 2008 at 8:25 am
Here’s the text of an internal Senate Republican talking points memo that reveals exactly what’s going on with the Republicans:
Opposing this measure, as Heath Shuler does, plays right into the Republicans’ hand of wanting to use the economic crisis to go after the American worker.
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December 13th, 2008 at 8:42 am
Credit default swaps are pretty damned esoteric – even the firms that went under pushing them didn’t fully understand them. What makes the anger at the car companies’ follies more palpable than it was for Wall Street is that everyone understands cars – what we like, what we don’t, and which we wouldn’t buy. So big financial firms get their hundreds of billions with few strings – few people like us feeling qualified to weigh in. What’s missing, and what Michael is seeing, is the anger at mismanagement seems to be overwhelming consideration for millions of laborors in the auto and parts industries caught working at the wrong place at the wrong time. A big question is whether or not we are getting the straight story on how “imminent” their collapse is. But let’s assume for a moment it is imminent. Nobody here wants to see the head office stay, and I would prefer that any financial aid include that, but my earlier, hypothetical question remains unanswered: what’s an acceptable screwed worker to screwed empty suit ratio? How much collateral damage among rank and file workers would we say is acceptable to defend an economic theory or to just see the suits go down? Tim argues that autoworkers’ skills will find a home in new firms run by “competent” managers. Perhaps. But is that before or after thousands of them lose their homes?
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December 13th, 2008 at 11:01 am
From what I’ve heard, that 70 plus per hour figure is the aggregate cost to the company to employ the average union worker (including wages, benefits, pensions, etc.)
But honestly, like many folks, I don’t understand any of it. For most folks out here, who live paycheck to paycheck and don’t even have pensions or 401(k)s or health insurance, much less $30 or $40 an hour jobs, it’s all just abstract rhetoric and incomprehensibly large numbers.
Although we are vaguely aware that somehow we’re being fucked and our futures sold out, most folks are just hanging on in quiet desperation, busying ourselves trying to find some shards of what passes as happiness in our increasingly senseless and difficult lives.
I don’t mean to be so morose. But listening to the news, I feel like a character in Waiting for Godot.
MM
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December 13th, 2008 at 1:28 pm
I must confess, economics is one of those things that does not come natural to me. Im a firm believer in tangability, and the way my brain works, economics is like a made up abstraction.
I do agree that something has to be done to make sure so many workers dont slide into poverty. Our nation cant handle the rate of people and famlies falling off the edge as it is. On the other hand, Circut City went bankrupt, and you can still buy a TV from them.
I see the “whats another 14-25 billion after the 700 billion giveaway” arguement, but I think the precident of the government giving money away at the rate it does is one that should never have been set. All around. It’s one thing to give someone unemployment because the plant they worked at closed. It’s another when women have another kid just to get a bigger check. Let’s all be honest about what that kid will probably grow up to be like. Corporations, like people, will not improve unless circumstances forces them too.
I can accept the idea for the big three bailout if it’s in the form of a loan with “improve or die strings” attached. I think the lack of strings attached to the bank bailout is disgusting, but typical of the lack of accountability in what passes for modern conservitism.
Not claiming to have any answers, I think the ills of this nation are systemic and at all levels. While Im a big fan on regulating big business, which isnt done like it should be, consider the hoops someone has to jump through to open a small business here in Asheville.
And dont get me started on what we collectively find important. Keeping up with the jonses has run us ragged. Those who know me know Im somewhat tongue in cheek about being vain, but Im a real cheapskate when it comes to dressing well. The only thing I believe in paying full price on is a good pair of shoes.
Amd MM, I must compliment you on the eloquence of your moroseness.
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December 14th, 2008 at 8:54 pm
- Barack Obama in “The Audacity of Hope”
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December 17th, 2008 at 1:55 am
Except that Shlaes is a wingnut welfare hack who doesn’t even know what a recession is. Apart from that, y’know, whatever.
Here’s the deal-i-o: if GM gets sold off at firesale prices, chances are it gets carved up and the southern senators who already tossed out billions to attract German and Japanese-owned firms have to deal with loss-leader foreign-made Chevys hitting the market. Now, this may be fine to Tim Peck and other neo-Hooverian believers in the Free Market Fairy, but they’ll need to be able to build tall enough walls to keep out the rabble when the US ends up a Third World economy. It’s a good thing that most people infected by Ayn Rand’s nonsense grow out of it when they’re old enough to vote. For the rest, the appropriate response ought to be pity.
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