SENATE REPUBLICANS: IDIOTS AND FOOLS, II

Yesterday I discussed how republican senators are acting like idiots and fools because they're bent on putting ideology (and a failed one at that) above the facts. Acting like the congressional fools of the 1930s (see Smoot-Hawley), senate republicans are using the current crisis to impose their vision of what labor standards and wages should be for U.S. auto makers. For them, what's wrong with Detroit can all be tied to unions in general, and the United Auto Workers in specific. So they want to set wage and benefit levels - from Washington.

Well, guess what? In Germany, where wages are higher than they are here in the U.S., the Germans are confronting some serious market challenges of their own (see graph below). But their political leaders and their auto executives aren't pointing fingers at workers who make too much money. Instead, if you read this article from Der Spiegel, auto executives are looking at the challenges they face as managers in a collapsing global economy.

That's right. German auto executives actually believe it's their responsibility to manage their company through this economic meltdown. Here's the real fun part: they also think they need to keep as many people employed as possible. If you read the article, there are no references to high wages or to going after organized labor. In fact, German automakers have made it clear that they need the German government to help provide some assistance so they can make it through this market meltdown. They see this as a team, or national, effort (take that, American flag wavers).

Opel is not the only German carmaker seeking government assistance. VW, Daimler and BMW have also submitted their requests. They want Berlin to issue government loan guarantees on the loans taken out by the carmakers' financing divisions. They are also asking the German government to pay a premium to anyone who replaces a car more than 10 years old with a new one. And they want to see Brussels cancel its plans to impose penalties on manufacturers for failing to meet their CO2 emissions targets.

What this article makes clear is that even if Detroit's automakers have been operating according to an outdated 20th century business model, our political system is mired in a 19th century mind-set.

Conservatives in Washington simply don't understand that their utopian market dreams of harmonious markets, where invisible hands exist, is a myth. Worse, they don't seem to understand that by going after labor they are artificially restraining one of the factors of production that Adam Smith made clear was key for market capitalism's success.

Like I said, they're idiots and fools.

- Mark

Here's a comparison of collapsing auto sales in the U.S. and in Europe.



UPDATE: Here's an article from the NY Times that debunks the "auto workers are making $73 an hour" myth. If you're not a republican senator, this graph from the article should help too.