Twice a week, columnist and former Presidential candidate Patrick Buchanan posts a column to the Human Events website. Of late, Pat has railed in favor of the Big Three bailout, casting its recent failure in his latest column as a permanent blow to Republicans because they’ll forever lose the votes of the Reagan Democrats who work at these auto plants.
While Pat makes a good point about the subsidies that several Southern states have provided to get various auto plants within their borders, the cost of these pale in comparison to the amount of money the Big Three would receive from the federal government. Moreover, there’s no guarantee that the Big Three wouldn’t have to file for bankruptcy and close anyway should the “car czar” installed as part of the bailout proposal not decide that their business plan is meeting whatever specifications are dictated to the automakers as a condition for survival.
Buchanan is known as a protectionist conservative, who supports the idea of tariffs on imports in order to save American jobs. He notes:
In today’s world, America faces nationalistic trade rivals who manipulate currencies, employ nontariff barriers, subsidize their manufacturers, rebate value-added taxes on exports to us and impose value-added taxes on imports from us, all to capture our markets and kill our great companies. And we have a Republican Party blissfully ignorant that we live in a world of us or them. It doesn’t even know who “us” is.
While there are definitely inequities in how we open our markets to others as opposed to how they open their markets to us, on the whole the trade situation benefits consumers in America. (This isn’t to say some improvements couldn’t be made.) And while Pat decries the “Toyota Republicans” who voted against the bailout, it’s worth noting that many of these Reagan Democrats abandoned the GOP two cycles ago because the party was straying from fiscally conservative principles!
The Republicans had a poor choice in the matter – either alienate those who work and depend on the Big Three (and make up a significant percentage of voters in Rust Belt states) or go against their principles and support a bailout that wasn’t guaranteed to work without significant concessions from many of those same voters. And it’s doubtful that the GOP would get any credit for attempting to save their jobs in the auto plants via the union missives these workers receive, but I’m certain the Republicans would be assigned the blame for making the unions concede wages and benefits for workers and retirees.
There’s no question that one or more of the Big Three would file for bankruptcy in 2009 without some sort of federal help, but this could be a liberating factor as well. Perhaps a merger is in order between two or even all three of Detroit’s automakers – certainly it wouldn’t create a monopoly because the Big Three’s market share has declined to a point where foreign automakers are closing in on the lion’s share of the American market.
In this case, the conservative Buchanan advocates for the wrong choice. Certainly many Republicans set a poor precedent by voting to bail out the financial industry, but one wrong move does not deserve another and it’s time for Detroit to catch up to the marketplace.
Michael is right in most of his points. I would ask clarification on his last statement – “it’s time for Detroit to catch up to the marketplace”. What does that mean? The fact is that their cars are, in most cases, the equivalent of their foreign competitors. The problem is the cost of producing their now high quality cars. The UAW most be brought to its knees. Benefits and wages need to be slashed. And, while those that have retired and enjoy health benefits must be protected in some way, future retirees must be on the same grounds as the rest of the American workforce – when you leave your job the company stops paying for your benefits. Anything short of bringing Detroit’s cost structure in line with Asia will sooner or later result in failure.
I elaborated a little more on the Red County site.