The
hypocrisy which surrounds the proposed bailout of the U.S. auto
industry is reaching heights rarely seen, even in Washington, D.C.
The automakers are being held to a totally different standard than is
the UAW, which is, at least, partially responsible for the dire
financial straits that the car manufacturers find themselves in. The
politicians who support the bill, and are revealing themselves to be
Statists of the worst sort in the process, are not calling on the
union to make the sorts of changes they are demanding of the
automakers. The UAW is not being told that it must make the wage and
benefit concessions that are needed if the Big Three are to regain
any type of long-term financial stability. This point has been
driven home, in no uncertain terms, this morning after last night's
failure of the Senate to pass the bailout bill. Not one of the
Democrats who are so eager to expand the power of the Federal
government, House Speaker Nancy Pelosi, Senate Majority Leader Harry
Reid, Senators Christopher Dodd, Diane Feinstein, Debby Stabenow,
Carl Levin, and others, have called the UAW to task for failing to
make wage and benefit concessions. UAW President Ron Gettelfinger
stated yesterday, prior to the Senate vote, that the union would not
make any concessions in the area of wages and benefits. Yet the
Statists are strangely silent about the union's role in the breakdown
of the domestic automakers' financial positions.
Not one of
the supporters of the bailout of the auto industry is willing to take
on the UAW. Instead, supporters of the move, such as Michigan's
Governor Jennifer Granholm, are loudly shouting that the Senate
Republicans killed the bill as an act of revenge against the UAW.
Americans are being told that failure to nationalize the industry,
euphemistically called “making bridge loans to the companies,”
will result in the total loss of America's manufacturing base. One
of Governor Granholm's arguments, made in an interview on NPR's
“Morning Edition” today, is that failure of one of the Big Three
will “cause a ripple effect throughout the economy” in the form
of failure of suppliers to the industry. The governor then went on
to state that such failures would have an adverse effect on foreign
automakers such as Honda and Toyota because they are also customers
of the same companies that supply parts to the Big Three. There is,
evidently, no chance that the parts suppliers will shift production
to meet the demands of the foreign companies, or move into new fields
of endeavor.
The UAW has
been told that it doesn't have to make wage and benefit concessions
as, according to Governor Granholm, “the union has already done
that.” This is patently untrue as UAW wages and benefits are still
significantly higher than those of the non-unionized employees of the
foreign auto companies. Why is the union not being required to make
changes in the same way that the Big Three are? Why is UAW President
Ron Gettelfinger not being hauled in front of Congressional
committees to answer questions, such as why union workers should be
exempted from the pain being suffered by those of us who aren't paid
outrageous wages for performing jobs that have been made as simple
and repetitious as possible? Why should most Americans be required
to finance the lifestyles of a relatively small number of employees
of companies which face dissolution no matter how much money is
“invested” in them by the State? The answer is simple: union
votes are more important to Statist politicians than is the overall
health of the United States. Hypocrisy reigns supreme in Washington
and ordinary Americans will pay the price in further economic
troubles and loss of yet more freedom as the State absorbs another
chunk of the economy.
Of course,
all of the above was written before word came from the White House
that President Bush is going to allow money from the $700 billion
Wall Street bailout to go to the automakers. The Big Three will
become simply another arm of the government and the American people
will pay a high price in economic terms and loss of yet more freedom.
This doesn't change the points made above, but it does mean that the
Statists have scored another victory through the use of lies and
distortions.
As a result
of my last entry here some people have commented that my statement,
“...no matter how it is sugar-coated, the policies of John Maynard
Keynes are essentially ways of increasing the power of the central
government at the expense of individual freedom”, was too strong.
Some readers felt that I had not made a sufficient case for that
statement. I will attempt to correct that issue here.
The current
discussion of whether or not to bailout the Detroit automakers by
providing billions of dollars in loans is as good a starting place as
any. The basic idea of Keynesian economics, that deficit spending by
the Federal government will stimulate the economy during an economic
downturn, applies to the proposed bailout. The end result of the
proposed policy is to save jobs in the hope that doing so will cause
Americans to, once again, resume their profligate spending habits and
pull the economy out of its doldrums via the mechanism of consumer
spending. There is no substantive difference between the Federal
government giving the automakers billions of dollars, via the
mechanism of deficit spending, or its spending those billions on some
other form of “stimulus package” such as President-elect Obama's
spending on infrastructure projects. The money is still obtained by
borrowing, which denies the private sector access to those funds, and
the Federal government still controls how the money is to be spent.
How does this
act to limit individual choice and freedom? For the answer one has
to look at what the proposed office of “Car Czar” will be
empowered to do. The Federal officer who will be put in charge of
the bailout of the automakers will have tremendous powers to
determine what actions the manufacturers may take. He will decide
whether or not the Big Three put together reorganization plans that
will “make them viable”. There is every reason to believe that
those decisions will extend to what types of vehicles the companies
will be allowed to produce. After all, forcing the Big Three to make
small, fuel-efficient cars is a project near and dear to the hearts
of politicians such as Nancy Pelosi and Harry Reid. That will
certainly mean that GM and Chrysler, at least, will be required to
put a lot of emphasis on building the small, fuel-efficient cars that
Americans have supposedly been demanding, in spite of all the
evidence to the contrary, for the last thirty years. Gone, or at
least severely limited, will be the supply of large SUVs and pickup
trucks that have been so beloved by Americans for the last decade at
least. In their place will be vehicles such as the Chevy “Volt”
and the various small hybrids that have been developed over the last
several years. The judgment of one person will be substituted for
that of the millions who make up the market for new autos. In the
process individuals will be denied the ability to purchase the type
of vehicle that they may want and be forced to take, in its place, a
substitute that, by and large, the marketplace has deemed inadequate
to the needs or desires of many Americans.
The stimulus
package that is being proposed by President-elect Obama will act in a
similar way to limit the choices of individuals. As I pointed out in
my last entry, deficit spending by the State acts to limit the amount
of money available to private enterprise. Thus, the vast majority of
the jobs that will be “created” by the proposed State spending
will be construction jobs as it's difficult for salespeople, computer
programmers, or those engaged in manufacturing to build the bridges,
roads, airports, and other infrastructure projects that are so dear
to the heart of the President-elect. By limiting the amount and type
of jobs that the market would ordinarily be able to provide the State
will, again, be acting in a way which arbitrarily limits the freedom
of choice of Americans. Once again, Keynesian economic policies act
to limit freedom.
There is
simply no way around it. The fact is that the Federal government
will not provide money to the states or once-private enterprises
without establishing rules for how that money may be spent. The
limitations that the Feds will put on how the funds may be used will,
in the end, act to limit the freedom of individual Americans, even if
only in seemingly inconsequential ways. It is time for Americans to
realize that there is no such thing as a free lunch, and that while
the State may say it is “giving” money or services to help
citizens during these economically-troubled times, that money, or
those services, invariably come with rules about who may qualify for
them and what actions they may or may not take to remain eligible.
The more Americans acquiesce in allowing the State to nationalize
large pieces of the United States' economy, the more they will find
their freedom of action limited by the arbitrary actions of
Washington bureaucrats and politicians. And that, in the end, is why
the State loves Keynesian economics: adopting those policies, by
limiting the freedom of action of the marketplace, automatically
enlarges the powers of the Federal government and diminishes the
freedoms of the people.