Wednesday, September 10, 2008
Everyone (in Michigan) Wins!
"Laws are like sausages: it is better not to see them being made." - Otto Von Bismarck
On the surface, the Auto Industry aid plan being ramrodded through the House right now is eminently sensible. But it also eminently creepy, a text book, unabashed display of how the wheels of Washington turn that eminently gives me the heeby-jeebies.
To recap: House Democrats are raring to give the perpetually troubled auto industry $25 billion, in the form of low-interest government loans. "This is very, very important,” Nancy Pelosi assures us. “It's about jobs. Jobs, jobs, jobs, jobs.”
Okay, sure. Jobs, right. Specifically it is about jobs in Ohio and Michigan, which happen to be swing states.
Still, it looks like a sensible enough plan. This isn't quite a handout, it's a loan. Of course, the government doesn't actually have $25 billion to loan Detroit, so it'll have to put it on the charge card with everything else. The thing is, the government has a really great charge card. Most US debt is actually owned by US citizens, who buy it in bonds which pay very low interest. So if it charges Detroit the same interest as it's giving bond holders, then it can probably break even on the deal.
But it still gives me the heeby-jeebies, and here's why: Nancy Pelosi did not dream up this plan, nor did any of her congressional colleagues. Instead, Ford, GM and Chrysler sent auto lobbyists in force to both major national conventions, peddling exactly this plan. They argued that, since the government was so cruelly asking them to improve fuel efficiency standards, it should loan them some money to pay for it.
So budda-bing, convention's over, and suddenly this plan is on the "fast track." It'll be through Congress in a "matter of weeks" according to Reuters. I am not sure who had to suck the dick of whom to make this happen, but clearly something went down in Denver and St. Louis.
It's just a tad unseemly to hand three huge corporations $25 billion just because they asked nicely. It's also a tad unseemly to claim that you are doing so for the sake of "Jobs, jobs, jobs, jobs, jobs," when all three companies have been aggressively cutting their workforces, payrolls and benefits, while opening factories overseas.
Now, all three companies surely had to do those things. They're looking out for their best interests, not America's, after all. But with this bill America is also looking out for their best interests, which might leave some of their laid off workers wondering who's looking out for them, exactly.
And just to add one last veneer of sleaziness to the whole thing, the Democrats are now working hard not to iron out the proposal, but to decide which bloated bill to strap it to. Hmm... energy or stimulus? Tough decision. What criteria should we make it on? "The best bill to include this in is the bill that has the best chance of getting passed," quothe a GM spokesman, and surely all can agree.
So let's sum up: Corporations use lobbyists to ask Congress for money. Congress sees that complying can be spun as help for workers in swing states, so it obliges. Measure slides smoothly onto "fast track," gets slapped onto tangentially related bill that's more likely to pass than the Give Detroit a Blow Job Act. And the national debt grows. Voila! Instant policy! Everybody wins! Well, everyone in the states of Michigan and Ohio anyway, and probably several campaign chests.
That's another disturbing aspect to all this. Even if you accept that helping GM, Ford and Chrysler helps their workers - a somewhat dubious contention, since the cash comes with no strings attached, and they still have every incentive to trim labor costs - it's only going to help workers in handful of states. So why is federal money, your money and my money, going to a couple states? If these companies need to be propped up so badly, shouldn't that be the province of state governments, drawing taxes from the regions ostensibly benefiting? The money will only benefit the larger economy insofar as it is spent on American goods and labor. And there's absolutely no assurances that it will be used in that way.
Now, sure, the US Auto industry needs the money. But couple this with the Bear Stearns bailout and the Fannie/Freddie takeover, and you have to wonder, how far are we willing to take this thing? To what extent are companies actually on their own in our supposedly capitalist system? As semi-governmental companies Fannie and Freddie are special cases, and yes, Bear Stearns' collapse could have caused widespread chaos. But so would the failure of many, many other companies. Is our government going to tacitly guarantee every sufficiently large corporation? Will it lend money to every company with a cash problem, or only the ones with lobbyists?
What's so creepy about this auto bill is that it displays the entire corrupt lifecycle of Washington initiatives. They originate as lobbyist gladhanding, and wind up getting sold to us, when they are mentioned at all, as methods of propping up the economy. It's the government and corporate America doing the same old circle-jerk, and leaving the public out of it.
No, his won't bankrupt the country, yes it looks at least somewhat well constructed, and hell, keeping the auto industry healthy might just be good for us in the long run. But isn't it a bit disturbing that big companies can just ask the government for money and get it happily fast-tracked on through?
I guess I just wish that economic policy was devised by lawmakers, not lobbyists. Because in the end, "Give Ford a Loan" seems like a pretty shabby excuse for economic policy.