Senator Richard Shelby: Creator of the First 21st Century Great Depression
Filed by: Jeremy Bishop
November 17, 2008 5:30 PM
The auto industry bailout was the topic du jour on all the sunday talk shows this weekend, and the hypocrisy of those conversations is something I can simply not let go unanswered.
To be clear, I believe the first Wall Street bailout was a complete one over on the American people and another corporate welfare giveaway to Wall Street. If the bailout would actually work I would have had no problem with it. But as I've learned at Pride At Work , rarely can you solve a problem by simply throwing money at it.
This bailout does nothing to solve the problems that have gotten us to this place; the extinction of financial regulation and oversight, the incredible disadvantage American companies have providing health care, as most industrial nations provide health care through the government, and finally, income inequality levels not seen in this country since before the last great depression.
Senator Richard Shelby of Alabama has been hitting the airwaves calling on the Senate to reject an automobile bailout. Of course Senator Shelby has a vested interest in seeing the demise of the Detroit auto industry, as his state has had a boom of foreign car companies like Toyota and Daimler-Benz relocating to Alabama, since, as a right to work state, the ability to unionize is diminished, thus employees at those factories make lower salaries and receive nominal pensions.
The general reasoning being purported for rejecting the bailout is that Detroit has been making a terrible product and deserves to go down for their lack of foresight in the need to make green cars, and that their management needs to learn a lesson. Maybe so.
However, the same standards could be applied to AIG, Lehman Brothers, and all of the Wall Street tycoons who have created the financial disaster that we currently face. If General Motors deserves to go down for "failed management", then one rightly could contend that the same fate should happen to AIG. Instead, AIG employees continue to go on junkets to five-star resorts, all on tax-payer dime. What's good for the goose is most definitely good for the gander.
If Senator Shelby and the Republicans get their way and a bailout of Detroit fails, then they should be forever known as the party that has moved us into the Second Great Depression.
If General Motors goes out of business, we don't only lose those 250,000 jobs, but we lose the millions that are employed making automobile parts across the country. Estimates by economists place job losses with a potential bankruptcy of General Motors at over 2 million.
If we're going to become the bailout nation, then we need to bailout not only those who have missed their million-dollar bonus, but the workers who make cars, automobile parts, and make a middle-class wage and receive domestic partner benefits as well.
We can not afford as a country to see one of the last of our remaining manufacturing sectors disappear.
Sure, General Motors needs some massive restructuring, beginning with a massive push, by the government, for single-payer health care in this country, which would take the burden of health care costs off our manufacturing sector and help level the playing field with other countries.
I never in a million years thought America would become a Socialist country. But since it has, its time to see the Socialist revolution actually help workers instead of people with million-dollar checking accounts.
And to you, Senator Shelby, I see your new claim to fame to be the one who led us into the first great depression of the 21st century.
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17 Comments
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I don't want to lessen the impact of your article because it would be pretty devastating if GM failed. However, continued reliance on the private automobile isn't very sustainable.
In addition to support for a proactive healthcare policy, I would like to see organized labor advocate for greater reliance on mass transit. A return of rail based transit would be a boon to the environment, business, and the labor force. Union members build rail cars and locomotives, they lay track, they expedite traffic, and so on.
Keep up the good work you gize at Pride at Work are doing.
null | November 17, 2008 6:22 PM
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A return of rail based transit would be a boon to the environment, business, and the labor force.
Yes it would! Very good point.
I have mixed feelings about letting GM, Ford and Chrysler fail. Leaders of those companies have had how many years now to see the writing on the wall and convert to fuel-efficient cars?! Instead, they've continued to build gas-guzzlers because they were pocketing millions of dollars on them.
If it were those industry leaders who would feel the pain when the companies failed, I'd be first in line to say, "Let 'em go." Unfortunately, however, it will be the workers who rely on those companies for their collective livliehoods who will suffer. Which makes me feel a bailout may be warranted.
Brynn Craffey | November 17, 2008 7:19 PM
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I sat next to Senator Shelby on a plane yesterday and spent the whole time trying to get up the nerve to give him piece of my mind. But in the end, I just told him that I was a history teacher. I'm such a wimp.
Sarah | November 17, 2008 8:43 PM
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Sarah, I sat in front of Alan Keyes on a flight back from Sacramento in October. I wanted to hate him.
But as we deplaned, he help the little old lady with her overhead luggage and was very gracious, so I realized he couldn't be totally evil.
It was funny that I believe I was one of the few on the plane who actually knew who he was!
Jeremy Bishop | November 17, 2008 9:09 PM
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I know... he was actually really nice... when he found out I was a teacher he told me that I was changing my students lives and doing good work. Damn. I wanted to hate him so badly!
The more I research his record, though, the more I realize that I can still hate him, even if he's nice: he was a co-sponsor of a federal anti-gay amendment that would not only enshrine inequality into the American constitution, but also deny gay couples ALL of the benefits of marriage. So... even though he complimented my teaching, he's still a total douche-bag.
I should have said: "Oh, by the way, my seventh graders just threw me an engagement party for my super gay engagement... so you're right, I am changing my students' lives."
Sarah | November 17, 2008 9:38 PM
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Your students were proud of your engagement, in Alabama?
That is wonderful to hear.
Jeremy Bishop | November 17, 2008 9:55 PM
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"I have mixed feelings about letting GM, Ford and Chrysler fail. Leaders of those companies have had how many years now to see the writing on the wall and convert to fuel-efficient cars?! Instead, they've continued to build gas-guzzlers because they were pocketing millions of dollars on them."
Kind of. They were also pocketing millions from their financing, and we all know what happened with that.
I don't want to see them fail, I just want to see them (forced to, if necessary) move to greener technologies.
Christopher | November 18, 2008 12:58 AM
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Any company or financial institution that fails should be nationalized without compensation and run by democratically elected councils of consumers and workers in unions. The absence of economic democracy makes political democracy impossible.
The time to end subsidies for the rich is over. The bipartisan laws that deregulated corporate predators cut taxes for the rich, instituted draconian cuts in social spending and pushed thru NAFTAs are responsible for the economic crisis. They let the lunatics run the asylum.
To solve the crisis bailouts should be exclusively for the benefit of working people and consumers including imported and immigrant workers.
Bill Perdue | November 18, 2008 4:55 AM
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Jeremy -- Actually, I live in Maryland, but I do teach in a majority republican school and my students have been over the moon about my getting engaged. So... the future is bright, we just have to keep being out to young people and things will be better when they are running the world.
Sarah | November 18, 2008 10:24 AM
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I have difficulty with the bailout of the American automobile industry. I've read several comments about their need to see that "green cars" was their downfall. That probably is part of the answer.
BUT, I believe the major reason for their eminent demise is they've been making cars that aren't nearly as well made as the Japanese and Korean.
I'll be brutally honest. When I go car shopping, The first thing I want to see on a car is MADE IN JAPAN or MADE IN KOREA. Here's why:
Chrysler Sebring 1997--at 90K miles the electrical system started going haywire. Was worth $2K in trade in out of $19K purchase
Chrysler #2, a 2000 Sebring--at 100K miles the auto repair tech whom I had been to so often we were on a first name basis, told me I needed to get rid of the car ASAP. I was $7000 upside down in payments
Chrysler #3--1976 Cordoba--The front end was so bad it couldn't be aligned and kept getting worse
Plymouth 1975--The automatic choke got stuck several times, causing me to start going so fast even though I had my foot jamming on the brake. I ruined a set of brake pads before I could get it to stop. That's just one thing wrong with the car
Buick Skyhawk 1986--cracked block at 35K miles
Chevy Vega 1974--set itself on fire when I cranked up the car--1800 miles after it was purchased
Chevy Monte Carlo 1974--The transmission dropped to the pavement while stopped at a toll booth
Pontiac 1972--developed a serious oil leak at 30K miles, requiring a quart of oil about every 1000 miles
Compare that track record with the Japanese cars
Toyota Corona 1978--traded in at 120K miles--no repairs
Datsun Sentra-- 1980--totalled in a wreck, but got over 40mpg.
Mazda MPV 1993--100K miles traded because I wanted a cute little convertible--no repairs
Honda Del Sol 1995--100K--doctor said I needed to quit driving a manual transmission because of advanced neuropathy
Honda CR-V 2003--at 131K miles it's still driving with no repairs beyond maintenance. I looked at a 2008 Honda and found out that my current Honda was worth $11K out of the $18K I paid for it, My CR-V had 130K miles
The last decent American Auto was a 1965 Barracuda and a 1940 Buick Limited.
It will really take a major development for me to ever buy American cars again.
Rick Elliott | November 18, 2008 10:27 AM
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Rick, I bought a couple of lemons but I had seniority with a well paying union job so it wasn't the end of the world. (Please, keep this under your hat but if it makes you feel any better I actually exchanged money for an AMC Matador.)
But Rick, you seem to have bought a lemon orchard. Not that you're alone. Consumer advocate Ralph Nader* and others long ago explained why. Planned obsolescence. US automakers built cars to fall apart so that consumers would always be lining up to buy new clunkers. Stupidly, they didn't count on competition. But then all business owners, bankers ,and managers motivated by greed are retarded.
For years the Big Three have tried to recapture the market by making auto workers pay the price for their short sighted greed. They engaged in union busting and took back health care, retirement and decent wages. They exported jobs, outsourced to scab companies and used speed ups to engage in mass layoffs.
All on the eve of a depression.
The big three should be nationalized and run by a council of consumers and union members, and federal laws passes restoring UAW contracts and applying them to all automakers, foreign and domestic and to all auto parts makers. The only way to prevent a depression is to make sure working people have plenty of money to cover thier expenses.
Cars can be designed to run safely and last for 20 or so years and be non-polluting. But it won’t be done by private owners of businesses because it’s not profitable.
*Nader is the guy that Democrats blame when their anti-Labor bigot pandering prowar policies lose them elections. He’s not particularly radical and he won’t get my vote but he’s a verifiable hero of the consumer movement.
Bill Perdue | November 18, 2008 2:29 PM
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I have a real hard time understanding people like you. The auto industry is the last of the big manufacturing systems for big product left on our shores. If you like Mexico and China I think you should go live there. Then give me and the usa a update on your standard of living and lifestyle changes.
It seamed ok to bail out the wall street, and deregulate that system. But do we hold those leaders acountable for there actions? not when they give themselve raises.
In October the company I was working for went out of business after 30 years working with the big 3 here in metro Detroit. now i am a unemployeed worker here, with no job access because Michigan has the worst unemployed workers.
I have friends in fla. who have had 3 or more jobs since June. There still looking for work.
when are we as a country going to wake up that bush's programs are killing our people and country!
I really hope the country as a whole wakes up and lets there legislatures know the system is failing and its starting with manufacturing , wait till it its hits retail. this holiday season,
then what......
dan sturgis | November 18, 2008 11:23 AM
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Jeremy thank you for exposing the underbelly of Senator Shelby's opposition to the big three automakers bailout. It is also total hypocrisy for other legislators to say that the white collar sector deserves to be bailed out while the blue collar sector does not. Or is it just union organized workers who deserve to lose their jobs?
Yes, we can all agree that this situation did not happen overnight. I remember being in a political science class 20 years ago where the economist instructor spoke of the conservative and multinational corporate plans to deconstruct this country by:
1. Moving good paying jobs to "undeveloped" countries so they could pay poverty wages with no benefits and people would appreciate just having a job.
2. Changing the corporate tax structures so that they would not be penalized for off-shoring US jobs.
3. Change labor laws to favor employers and stop the growth of labor unions.
3. Disassembling the education system because we as a nation would not need a highly educated population as we were transformed into a consumer and service sector economy from a producer economy.
4. And one added but most valuable consequence of a less educated population is that a.) people spend less time paying attention to what is going on around them as they scramble find decent paying jobs to support their families. b.) leading to a less informed and apathetic population that doesn't see the value of voting.
So, here we are at a crossroads. We have just witnessed the turnaround of that trend toward hopelessness and powerlessness with an amazing voter turnout and the election of President Elect Obama.
What are we going to do to support this potential new era of hope? We have to stop the bleeding NOW! So long as we allow the corporations to call the shots and continue to destroy our economy--and the big three auto industry is a HUGH part of that economy--the they win and all of us lose!
I say support the 2 million jobs in the auto industry and support the building of quality green cars and mass transit at the same time (put qualifiers on the bailout like they were supposed to do with the banks). Demand universal health care so we can even the playing field for all sectors and rebuild our education system. Do not let them continue to control our future. We can do it--YES WE CAN!
Jo | November 18, 2008 2:33 PM
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More on the history of US auto, the UAW and how nationalization creates economic equality which leads to political equality.
http://www.kclabor.org/whattodowithbig3.htm
Bill Perdue | November 18, 2008 5:35 PM
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This is the dumbest analysis I've seen yet. Auto workers in the south are bombarded with UAW literature daily and continue to reject union association. It is not Mr. Shelby that wants to expunge unions from Alabama, but the prospective union members themselves. Furthermore, the AIG/Lehman issues were specific to only one department of the company. A comparison to the auto-makers is just plain stupid. In contrast, the US automakers ENTIRE business model has been contaminated for over 25 years. The current finanical crisis in the US has done nothing but accelrate the unavoidable for the US auto-makers.
chris | November 18, 2008 5:52 PM
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Chris, I'm sorry, but I couldn't find any sign of what you believe might help the current economic crisis amidst your name calling.
The way I see it is if a bailout is good enough for any poorly run corporation (department or not) then it should be good enough for another corporation that is responsible for such a significant sector of our economy. Fair is fair. Let us deal with what is before us. It is important to realize that what happens in Detroit will have a direct impact on you. There is just no way around it.
Jo | November 18, 2008 7:08 PM
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Jo,
I worked for the auto cos. for 35 years- non-union.
But you are so right on everything.
The auto bailout is needed to save jobs and a fiscal stimulus to create alternative energy and pollution control/elimination to create jobs is needed.
A person wants to know his job will still be there next week before he does any discretionary spending. Let's create those kind of jobs with the fiscal stimulus.
Frank | December 1, 2008 5:12 PM
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