Strangling the Big Three

Some points you have seen before--but worth re-iterating.

What killed Detroit was Washington, the government of the United States, politicians, journalists and muckrakers who have long harbored a deep animus against the manufacturing class that ran the smokestack industries that won World War II.

...Washington imposed a minimum wage higher than the average wage in war-devastated Germany and Japan. The Feds ordered that U.S. plants be made the healthiest and safest worksites in the world, creating OSHA to see to it. It enacted civil rights laws to ensure the labor force reflected our diversity. Environmental laws came next, to ensure U.S. factories became the most pollution-free on earth. It then clamped fuel efficiency standards on the entire U.S. car fleet. Next, Washington imposed a corporate tax rate of 35 percent, raking off another 15 percent of autoworkers’ wages in Social Security payroll taxes State governments imposed income and sales taxes, and local governments property taxes to subsidize services and schools.

The United Auto Workers struck repeatedly to win the highest wages and most generous benefits on earth--vacations, holidays, work breaks, health care, pensions--for workers and their families, and retirees.

Now there is nothing wrong with making U.S. plants the cleanest and safest on earth or having U.S. autoworkers the highest-paid wage earners. That is the dream, what we all wanted for America. And under the 14th Amendment, GM, Ford and Chrysler had to obey the same U.S. laws and pay at the same tax rates.

Outside the United States, however, there was and is no equality of standards or taxes.

So what?

...when America was thrust into the Global Economy, GM and Ford had to compete with cars made overseas in factories in postwar Japan and Germany, then Korea, where health and safety standards were much lower, wages were a fraction of those paid U.S. workers, and taxes were and are often forgiven on exports to the United States.

With the exceptions forced onto the foreign manufacturers by Ron Reagan, of course....but those were hardly enough due to the reality:

Japan, China and South Korea do not believe in free trade as we understand it. To us, they are our “trading partners.” To them, the relationship is not like that of Evans & Novak or Fred Astaire and Ginger Rogers. It is not even like the Redskins and Cowboys. For the Cowboys only want to defeat the Redskins. They do not want to put their franchise out of business and end the competition—as the Japanese did to our TV industry by dumping Sonys here until they killed it.

While we think the Global Economy is about what is best for the consumer, they think about what is best for the nation.

It's called "mercantilism."

In the 1950s, we made all our own toys, clothes, shoes, bikes, furniture, motorcycles, cars, cameras, telephones, TVs, etc. You name it. We made it.

Things change:

We no longer build commercial ships. We have but one airplane company, and it outsources. China produces our computers. And if GM goes Chapter 11, America will soon be out of the auto business.

And, by the way, Harnischfeger's corporate HQ is no longer in the USA. Bucyrus (Erie) is building plants offshore like there's no tomorrow to shift production capacity (partly for shipping reasons, granted). Maytag is closing its appliance factories around the US. Not just shifting production--but closing them.

Do you blame them?