To hear the media tell it, arrogant
corporate chiefs failed to foresee the demand for small, fuel-efficient
cars and made gas-guzzling road-hog SUVs no one wanted, while the
clever, far-sighted Japanese, Germans and Koreans prepared and built
for the future.
I dissent. 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.
As far back as the 1950s, an
intellectual elite that produces mostly methane had its knives out for
the auto industry of which Ike's treasury secretary, ex-GM chief
Charles Wilson, had boasted, "What's good for America is good for
General Motors, and vice versa."
"Engine Charlie" was relentlessly
mocked, even in Al Capp's L'il Abner cartoon strip, where a bloviating
"General Bullmoose" had as his motto, "What's good for Bullmoose is
good for America!"
How did Big Government do in the U.S. auto industry?
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.
Thus 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.
All three nations built "export-driven" economies.
The Beetle and early Japanese
imports were made in factories where wages were far beneath U.S. wages
and working conditions would have gotten U.S. auto executives sent to
prison.
The competition was manifestly unfair, like forcing Secretariat to carry 100 pounds in his saddlebags in the Derby.
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.
Like Alexander Hamilton, they
understand that manufacturing is the key to national power. And they
manipulate currencies, grant tax rebates to their exporters and thieve
our technology to win. Last year, as trade expert Bill Hawkins writes,
South Korea exported 700,000 cars to us, while importing 5,000 cars
from us.
That's Asia's idea of free trade.
How has this Global Economy profited or prospered America?
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.
Are we better off now that these
things are made by foreigners? Are we better off now that we have
ceased to be self-sufficient? Are we better off now that the real wages
of our workers and median income of our families no longer grow as they
once did? Are we better off now that manufacturing, for the first time
in U.S. history, employs fewer workers than government?
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.
Our politicians and pundits may not
understand what is going on. Historians will have no problem explaining
the decline and fall of the Americans.
