Misplaced Demands: The Bridge Loan and Wage Cuts

Yesterday, I posted an entry questioning whether a bridge loan/ rescue package from the federal taxpayers to the auto industry giants was warranted. Grace from Michigan commented that ordinary people in Michigan, who work for these companies and have essentially been struggling through a recession for several years, really could use a hand. Moreover, she pointed out, what they are asking for is a loan, not a handout. I promised to consider the “pro-loan” side of the issue today. It’s going to be a pretty sparse examination. Because honestly, the “need” appeal that Grace was making, is the ONLY point I can see that has any merit at all. It’s the crucial point, of course, and I wouldn’t be a liberal worthy of the label if I didn’t believe in citizens seeing each other through tough times. But my questions still stand as to whether this strategy will work. I just don’t see any evidence that it will. On the other hand, I do keep hearing that apparently we eventually made a “profit” on the 1979 Chrysler deal, so who knows?I turn now, to the real focus of this post: the “wage” issue. In the Senate bill, there was a tolerably fair provision limiting executive compensation, including a freeze on bonuses for those making over $250k and a moratorium on golden parachutes (although it did include an “incentive” exception that raised a bit of a red flag for me).

But the biggest controversy seems to be over the issue of workers earning union wages. That’s the problem? Really? Those guys making working class wages with their hands and sweat and didn’t mismanage their companies into a 5-year loss-cycle, THEY are the ones whose ass we’re going to get “tough” on? They are the ones who have to “give something” so that the guys who did run the companies into the ground can keep more of the $14 Billion that they get from taxes we all have to pay? Bob Corker of Tennessee has outdone himself in forthrightly “demanding” the auto exes trim the fat by slashing their workers’ wages and benefits. Yeah, that’s been their big indulgence, overpaying their factory workers! You GET ‘em Corker! You get ’em good!

Beyond lip service, there has been little in the way of substantive objection (addressing the kinds of questions I raised yesterday). All the sticky “free market” convictions seem to have been easily surmountable when it came to agreeing to give away taxpayer money to big corporations. “It’s not the time for ideology” as President Bush said a few months ago. [One wonders what use “ideology” is, if it must be abandoned to solve real-life problems, but that’s a different post]. However, when it comes to working stiffs, suddenly all the righteous wrath of fiscal responsibility is unleashed. The way Bob Corker is practically frothing at the mouth with indignation at the hourly wages negotiated by union laborers, it’s almost hard to believe that he’s not a cartoon or an archetype in a morality play. This is where I am simpatico with that “why didn’t you ask this of Wall Street” chorus that I criticized on the broader issues.

You know, I keep hoping that there really aren’t people like Corker, who fit those horrible caricatures of Republicans that are dreamed up by extreme partisan leftists. I keep thinking, it’s just not possible that there are people whose agenda really is just straightforward patronage for the wealthier classes at the expense of working people. It’s like they were looking for an excuse to pull off one more reverse-Robin Hood act and this was it.

I know I’m not really making a cool-headed argument at this point and that my rage is showing; but this is so ass-backwards it makes you almost apoplectic.

This whole strategy probably won’t do much good in the long run, but if we are going to do it, for whatever short-term benefit the powers that be are persuaded we will see, then requiring a gratuitous punishment clause against workers just adds insult to injury. I have no great love for socialists (because everything they fear from corporations, they end up letting governments do), but happening upon the World Socialist website, I saw an interesting comparison of the current bailout proposals to the Chrysler deal in 1979. A bit of unusual insight regarding the windfalls made by Chrysler and Lee Iacocca while workers were asked to “sacrifice.”

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