Friday, December 12, 2008

Detroit Bailout Dies in Senate

Old news by now, but it has made us think a little bit.

We are by no means certain that we liked the plan ourselves.  Bankruptcy seems like a more reasonable way to go as the Big Three restructure, which is a polite word for "implode."  But that said, the means by which the plan failed are revealing, since they were purely political.  Despite support from  Republican White House, the plan was killed by Republican senators, apparently disappointed because they could not wrestle the concessions they wanted from labor unions.

They actually filibustered.  Mr Smith went to Washington expressly to kill the unions

We will freely grant that labor unions can be a pain in the neck -- if you are management.  After all, they exist for the purpose of making your labor more expensive.  (Also safer and better trained, something else management has a long history of resisting.)  

But look at it from another perspective:  unions have been the building block of the American middle class.  They allow industrial workers to earn a remotely-equitable share of the profit created by their own work.  No less significant, they help non-industrial workers whose particular jobs, while perhaps important to the overall function of the economy, tend to be massively undervalued -- we are thinking, for example, of schoolteachers.  These are people who, a century ago, rarely had much hope of owning homes or, as they became available, automobiles.  

So the Republican bias against unions has had an unintended result:  it has decimated the middle class, which -- as even non-economists can see at a glance -- has diminished terribly in recent years.  And when you cut down the middle-class, you cut down the consumer base for a lot of industrial products.  Such as cars.

Republicans sometimes take pride in being a party of big ideas.  It seems they are so deeply committed to the idea of union-busting that the GOP is willing to kill what's left of US manufacturing, and the US middle class, if that's what it takes to keep from doing a deal with Big Labor.  Great idea.

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