If anyone doubted that a class war is in progress, hidden beneath a variety of euphemisms, like ‘bail out’, ‘downsizing,’ ‘outsourcing’ and ‘NAFTA’, their doubts can now be given the decent burial that they deserve. There has been no more blatant act of class antagonism in recent memory than the apparent willingness of Congress and Wall Street’s appointed grifter, Henry Paulson, to let a major part of the American manufacturing sector die.

The difference between a diffident Congress respectfully requesting a teensy bit more information before handing Henry The-Sky –Is-Falling Paulson a $700 billion authorization, in record time and with no strings attached, stands in stark contrast to the hostility and derision directed at Detroit’s auto executives, who are responsible for actually making something useful and who are requesting a $34 billion guaranteed loan to help get them through the harshest economy in memory. An economy in freefall, by the way, that is the direct and immediate consequence of Wall Street and its Washington, D.C., enablers.

Until recently, auto manufacturers were selling their big, profitable SUVs, making money for shareholders and being applauded by investors. Suddenly, Wall Street speculators hijacked the oil industry, transportation and food prices skyrocketed, the economic core of the country, the homeowner, went into Wall Street-induced foreclosure, and before Detroit could turn its massive ship around and concentrate more of its attention on hybrids, SUVs were collecting dust on new car lots. A lack of foresight? Yes. Just like millions of homeowners who tried to get ahead of the curve. Just like the Congress that had deregulated so many markets that corrosion had seeped into the financial base forming the substructure of impending economic doom.

The auto executives were told that they couldn’t get a government loan without a specific plan detailing how they would use the funding. With a brand new set of standards that had been notably lacking when Paulson’s railroad came through, Senator Pelosi made clear: “No plan, no money.” Despite the negligence and incompetence of banks, Wall Street, and the U.S. Congress which have caused an international crisis that will certainly bring U.S. hegemony to an end, Paulson was never asked for a reasoned, intellectually honest plan for his bail out billions, which, as events quickly showed, he couldn’t have provided anyway.

Senators, deep in the depths of hypocrisy, castigated the auto executives for flying to Washington on private jets.

They suggested that the auto honchos step down from their jobs so that new management could be put in place.

The auto executives were even asked if they would forego their salaries for the requested loan.

None of these subjects was broached with Wall Street surrogate and ex-Goldman Sachs CEO Paulson.

The sight of U.S. Senators conducting a withering assault on representatives of the manufacturing sector was a sad spectacle made surreal by the participants themselves. The U.S. Congress and its approval of one free trade agreement after another has made virtually all American industry, with its environmental safeguards and middle class wages, noncompetitive in the global market. The entire industrial sector is well on its way to having a Southeast Asia or Mexico zip code. Legislators talk as though the U.S. manufacturing sector is a dispensable nuisance instead of a sign of strength, and when South Carolina’s republican governor Mark Sanford says the American auto industry is unnecessary (PBS, 12/3/2008), we have to wonder if this was their intent all along.

Richard Shelby, R-Ala, has been the most derisive of the industry’s critics. However, as USAToday noted on December 2, his state is home to Honda, Toyota and Hyundai plants, and has given $650 million in tax incentives to foreign manufacturers. The South in total has handed them $3.2 billion.

Critics say that auto workers are paid too much. If we’re talking about the CEOs there is no argument, although they are scarcely in the same league as Merrill Lynch CEO John Thain, who made $83 million in 2007, or Goldman Sachs’ Lloyd Blankfein at $54 million.

The workers themselves make about the same as employees at Toyota and Honda, about $26 an hour. The real difference lies in the legacy costs of the Big Three. Although nonexistent at the foreign automakers with their new manufacturing operations, Ford, Chrysler and G.M. have decades of history including retired employees, pension and health benefits obligations. Added together and divided by the current workforce, their hourly employee cost of operation, they say, is $70. Politicians want Detroit to do away with its high legacy costs by ‘restructuring’ or declaring bankruptcy and letting a judge do it for them.

It’s no exaggeration to say that Detroit’s auto industry is largely responsible for creating America’s middle class. Kicking and screaming, the auto companies in the 1940s and 1950s worked with their unions to provide decent pay and benefits. Then – voila! -their employees could not only buy the cars they made but also housing, appliances, and clothing, too. Because of the health care and pension benefits eventually built into their contracts, auto workers became some of the most economically secure citizens in the world.

All workers wanted what Detroit had made possible. Before 1960, the pay and benefits in the industrial sector had become the gold standard for every employee across the country. The quality of life of the U.S. middle class had become the envy of the world.

About 30 years ago, automakers began to take seriously the inroads being made by foreign manufacturers and, in the interest of remaining competitive, began serious efforts to ‘restructure’, that is, reduce the number of employees, pay and benefits. Free trade agreements beginning in the 1990s made circumstances nearly untenable for employer and employee. Detroit went into a downward spiral.

Now, with Washington politicians demanding that auto makers jettison their legacy obligations and cut wages, many in the ‘elite’ classes gleefully anticipate the complete annihilation of the remnants of the hard-won, historically unprecedented, social contract between employer and employee. With an estimated 3 million jobs at stake, this could mean the extinction of the remaining middle class wage earner and pensioner.

The devolution of the middle class coincided with the financialization and securitizaton of the economy, as money handling became more esteemed than making things. Free trade coincided with the announcement of the Dow Jones Industrial Average at the beginning of every evening news broadcast.

Now, the middle class is vanishing, facilitated by politicians who have enabled the death of unions, rewarded outsourcing, passed free trade agreements, annually increased the numbers of H1-B visas, deregulated the securities and banking industries, actively laying the groundwork for declining incomes and endlessly repetitive financial scandals.

If Congress decides to cut loose one of the last of the major U.S. manufacturers it could have enormous consequences for national security, not to mention the well being of millions of Americans. As our elected champions hand trillions of taxpayer dollars, without challenge or conditions, to a grossly negligent financial sector, it will signal a final chapter in a class war lost by those in the middle.

_______
Cameron Salisbury

http://www.smirkingchimp.com/thread/19010

If Congress decides to cut loose one of the last of the major U.S. manufacturers it could have enormous consequences for national security, not to mention the well being of millions of Americans. As our elected champions hand trillions of taxpayer dollars, without challenge or conditions, to a grossly negligent financial sector, it will signal a final chapter in a class war lost by those in the middle.
sumes it up nicley eh? from the post above

wrong. the average pay at an import manufacturer is around $25. the UAW starts at $27 an hour with full benefits. the average is closer to $36 an hour. and also the import figure includes all employees, not just the assemblers in the UAW figures. the fabricators make substantially more.



what? hard-won? extinction of the middle class wage earner?


ok, seriously. quote stuff from legitimate sources. try to think for yourself and not regurgitate the same filth that some left-wing nut tells you to.

and while letting the big three fail may have some impact, the industry will not stop working. the UAW will be forced to renegotiate their insanely written contracts. personally, I'd love to see them fall because that would require the renegotiations and lessen the incfluence the unions have. unions started for the right reason. now they're corrupt, greedy institutions that are leeching off others and they've finally hit the point they're going to kill the host, taking themselves down with it.

Wow, two completely opposite takes on the problem. Strange, both sound reasonable to me...even the cut and paste, by the way.

To me, unions are wholly unnecessary. I work in a blue-collared job and have had no issues with health care (completely paid for in my current job) and I get excellent pay for my industry... without a union. to me, reward should come with hard work and the betterment of one self. last time there was a strike with stater brothers and their union here, the temps that replaced them did the same work with half the employees.

It's an interesting thing: the unions expect everyone to share their view and support them. last time, I purposely shopped at stater brothers even though i hate to shop there just to piss off the union. while keeping the middle class alive is important, unions are exactly what they're trying to fight against - greed.

The UAW, whether you like it or not (actually, madison's post established that fact) is the downfall of the automotive industry. you can't put time and money into development and bettering a vehicle if you're paying 2 to 1 or more on labor costs. It's just not possible. that's why GM had to buy toyota's old hybrid technology instead of developing their own. there's no money left.

Yep, unions are totally unnecessary because you live in the U.S. where you benefit from labor laws that have been largely shaped by union influence.

Now before you tell me that's what screwed us you ought to think about how many things most people take for granted.

Funny that unions are being made a villain in this situation.

It's too late for long posts.

Lynann nailed it.

and wow, give that man an 'A' for effort !

I've said over and over again. unions had a purpose in the past and accomplished great things. but like other things of the past, they are no longer necessary. name one great thing a union has accomplished that was a revolutionary topic in the last 20 years.

also, I'm a firm believer that unions promote the perpetuation of the middle class, not the saving of the middle class. the contracts promote laziness and stagnation in the workplace and the complications of terminating an employment do not encourage those workers to make anything more of themself. where's the drive to do better? to learn? to pick yourself up under your own power?