I drove my Chevy to the levee, but the levee was dry…

According to a breaking New York Times report, Senate Republicans scuttled the negotiated bailout proposal for the auto industry, thereby producing a resounding beat for President Bush and President-elect Obama. Why did the Republicans extend themselves this time around? Are they biased against the real economy? Do they actually despise common Americans who will suffer their decision for a generation or more? I ask because they want to use the UAW, the crisis in the auto industry and the economic crisis as a whole to build a more exploitative American auto industry or, failing that, to eliminate an example of a successful trade union. Senator Mitch McConnell (R-KY) put the matter in rather blunt terms:

The sticking point that we are left with is the question of whether the UAW is willing to agree to a parity pay structure with other manufacturers in this country by a date certain. And I understand their reluctance to do that.

Yet, the problem is not as simple as enforcing a bit of belt tightening, for, as Aaron Weiner of the Washington Independent reports:

Union leaders, not surprisingly, reject the notion that concessions are needed. "Talk of more givebacks by our union ignores the cuts we made just one year ago, when our union agreed to a 50 percent wage cut, down from $28 an hour to $14 an hour, and no pensions for new hires," said Hammer. "Reducing our quality of life would have a ripple effect on our entire economy, and would just make things worse. The reality is that our labor constitutes just 8 percent of the price of a new car. We could work for free, and it wouldn't solve the crisis."

Who, exactly, would or even could buy American-made vehicles if the United States were to become a low-wage, low-benefit, low-tax economy as the Republicans want it to be? If not Americans, then who? The hardnosed Republicans seem not to care about these questions. If McConnell and his allies did care and if it is a parity wage which entices them, then they may wish to consider taking measures meant to increase the average real wage if they want the United States to become again an internationally competitive economy. A structural crisis of this magnitude will not resolve itself as soon as it possibly could if the government promotes unemployment, wage and benefit cuts, balanced budgets or a return to the status quo ante. James Galbraith put the matter thusly:

This is a chronic illness. Swift action is definitely needed. But we also need recovery policies that will continue for years.

Well, the Senate Republicans seemingly want policies that will last for decades….

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