During this good-will-to-men holiday season, I would like to take issue with the Republican trolls who require salary concessions of unionized auto workers as a condition of the bailout. When people used to say this was the greatest country on earth, they meant that it was a place where ability, skills and intelligence counted, where salaries for working people were the best in the world. Yet, here we are with elected representatives of the people insisting that factory workers accept pay cuts to qualify their employers for government loans while banking executives receiving taxpayer money are allowed to keep their salaries, bonuses and perks. Bear in mind that the banking executives are largely responsible for not only the banking crisis, but for the auto crisis as well.
Obviously,
the CEOs of American industry haven’t learned the lesson that an economy based
on consumer spending cannot survive if consumers can’t afford to spend. Driving down wages in order to compete
with overseas producers, and moving production facilities overseas to make
things to sell back home are not sustainable plans.
It’s a sort of reverse Ponzi scheme. In a Ponzi, one builds a pyramid higher and ever higher in order to take as much as possible before the inevitable collapse. In the downward price/wage spiral, one shovels out the foundation to take as much profit as possible before the supported structure collapses.
I understand how the MBAs who are caught up in the madness of maximizing each quarter’s profits can outsmart themselves. Government, however, is supposed to take the long view and protect the next generation. We don’t expect politicians to see the future, but we can expect them to recognize greed and stupidity. Well, maybe that’s too much, too. That’s why we have career government experts in every possible field, to watch over the rest of us and prevent overreachers from getting carried away.
The public should rise up when our watchdogs are underfunded or politicized. We don’t, in large part because we don’t like oversight of our own affairs, and when corporate con men ask only to be allowed to run their own businesses without interference, we sympathize.
Meanwhile, have you every watched the wild life documentaries that show a herd of a hundred zebras being stalked by one or two lions? When the lions attack, the herd runs away and abandon the hapless zebra who was caught to be eaten. Everytime, I shake my head in wonder. Better him than me seems to be the attitude. If the mass of zebras would only turn round on the lions they could stop the depredation. By running away, the zebras are giving the lions permission to come again.
If we want to stop the lions in business suits from eating our neighbors, we have to collectively turn on the predators and stomp them into irrevelavance.
First, bring back the Customs duties that have been cut over the years, but this time use them to cover the difference between the wages paid the workers who make the products and the wages paid here for the same work. Let manufacturers raise salaries in the third world or bring the jobs home. Next, make health insurance similar to Social Security, i.e. every employer pays a percentage of wages into the insurance pool. Like the uninsured motorists fee charged uninsured drivers in my state, do the same with health insurance charges to all employers. Eliminate the benefit of stacking part-time employees into full time jobs.
My credit union did not suffer like the banks because it does not sell its mortgages to other institutions. It is careful about who it lends to because it knows that it has to service and hold the loans it makes. That should be the law for all lenders. A company that makes its money by finding borrowers and then selling the loans does not have an incentive to be conservative.
Next, do away with insurance for bank loans, it only fosters recklessness. Retail businesses calculate “shrinkage” or theft, into their profit calculation. Let banks calculate in a percentage of their loans that will turn bad, and then work to keep that number down. Put the effort at reducing losses on the front end where the borrowers are instead of at the back end where bookkeepers can only react to events.
High wages benefit the economy and society. Medical insurance for all would prevent the primary reason for personal bankruptcy. That should be the mantra for the new administration.