Slow-motion head-on collision
No doubt Detroit is in serious trouble. Sadly for the Big Three, federal assistance to shore up the auto industry has been politicized (Washington Post) in a manner much unlike the financial services bailout (dubbed the “Troubled Asset Relief Program,” TARP for short), which, as we all remember, was ultimately pushed forward in a frenzied state of bipartisan panic (can you say, “disaster capitalism?”).
And surprise, surprise – now Treasury secretary Paulson says they’re not even going to use the $700 billion to buy up banks’ “toxic assets.” Wait. Isn’t that what the thing was designed for in the fist place?
Economist Dean Baker of the Center for Economic and Policy Research raises an important point when he asks why the federal government so quickly leaped on board the panic wagon when the financial services industry needed help (and needed some serious strong-arm persuasion in order to include what paltry limits on CEO bonuses that bailout included), but now balks at the opportunity to re-envision America’s auto industry to set the standard of fuel efficiency, safety and reduced environmental impact – all while saving the jobs (which would become the touted “green jobs”) of workers who make, what, $57,000?
Perhaps Paulson and President Bush are holding their breath on assisting the auto industry because they see the rising gas prices and shrinking economy as an opportunity to retrofit our infrastructure into a new bicycle- and pedestrian-friendly landscape, with long distances being covered by state-of-the-art, high-speed electric rail lines, like California will soon begin to build. Perhaps they see that America’s automobile-dependent structure makes us dependent on fossil fuels, and they are using this crisis as an opportunity to create a sustainable, environmental legacy for themselves. Perhaps they’ve started to realize big business can no longer offset costs to the public, passing “savings” onto consumers while destroying infrastructure and ripping off taxpayers (as if the consumers and taxpayers were distinct groups). What needs to change is the paradigm of how businesses weigh the true costs and benefits of their actions, and maybe Bush and Paulson know it.
Keep an eye on this slow motion, head-on collision. Because, of course, it’s more of a matter of where the friends and financial backers are – I hate to state the obvious, but, traditionally, Wall Street’s influence leans right and the auto industry’s influence, with its heavy associations with the UAW and other organized labor, leans left. But as divisive, anti-labor rhetoric is already spilling from the likes of the National Legal and Policy Center’s President, Peter Flaherty, who blames labor. Maybe this gets him a few pats on the back from the last handful of Reaganite Kool-Aid drinkers who think the answer to every problem is deregulation.
The good news is, nobody with the least amount of faith in empirical science takes this perspective seriously anymore. And Public Citizen has some sensible suggestions – ways to turn an auto industry bailout into an investment in a new kind of American business, one which respects the environment and the public.