Sunday, December 14, 2008

Thom Hartmann on Countdown: This is an Absolute Consequence of Reaganomics.

Thom Hartmann looks at what the Republicans are currently doing towards the US car industry as a continuation of Reagan's assault on American unions. They really are, as a party, bitterly opposed to American workers being properly represented in any meaningful way.

And he has advice for Barack Obama:

Hartmann: David what he needs to do immediately is read Alexander Hamilton's 1791 report to Congress on manufactures. Hamilton laid out this six step plan to build an industrial economy in the United States and we followed it. We, Congress actually put into place in 1792 and it stood until Ronald Reagan came along and started deconstructing this, followed by George Herbert Walker Bush, Bill Clinton and George Bush now and the legislatures, mostly pushed by the Republicans taking this thing apart. You could argue some of this started with Taft-Hartley. But basically the founders laid this thing out. They had it figured out and it worked. We built the biggest industrial infrastructure and industrial economy in the world.
We have gone, when Reagan came into office we were the largest exporter of manufactured goods and the largest importer of raw materials on the planet. And the largest creditor. More people owed us money than anybody else in the world. Now just twenty eight years later we're the largest importer of finished goods, manufactured goods, exporter of raw materials which is kind of the definition of a third world nation and we're the most in debt of any country in the world. This is the absolute consequence of Reaganomics.

The current problems in the American car industry are the absolute consequence of Reaganomics, as much as the current economic disaster can be laid at the door of that failed political policy which stated that one must deregulate the markets and give more and more to the rich in the hope that some would trickle down to the rest of society.

People are greedy which is why markets need to be regulated. The Republicans have no answer to the current economic downturn as it was produced as a result of the policies of deregulation which they have used to define themselves ever since Reagan came to power.

All they can offer is more of the same, which is why their natural reaction is to kick a union when they have the chance to do so, even if that would result in millions of Americans becoming unemployed.

I've said it before but we are witnessing the death of Reagonomics, and the fact that the Republicans have no answer other than more of the same, even as the economy teeters on the edge of collapse, proves that point more than anything.

"Deregulate and cut taxes". It's all they know. So we shouldn't be surprised that they are repeating this mantra at a time when it is hugely inappropriate.


And, whilst considering what is happening regarding the American auto industry, am I the only person who finds this simply outrageous:

Still, autoworkers remain angry with the senators who tried to negotiate wage and benefit concessions from the union, then scuttled the House-passed bill that would have granted the loans and set up a "car czar" to oversee the nearly insolvent companies and get concessions from the union and creditors. Their top targets were Senate Minority Leader Mitch McConnell (R-Ky.); Senator Bob Corker (R-Tenn.), who led negotiations on a compromise; and Senator Richard Shelby (R-Ala.), who has been a vocal critic of the loans.

Kentucky, Tennessee and Alabama all house auto assembly plants from foreign automakers, and union officials contend the senators want to drive UAW wages down so there would be no reason for workers at the foreign plants to join the union.

"They thought perhaps they could have a twofer here maybe: Pierce the heart of organized labour while representing the foreign brands," UAW president Ron Gettelfinger said at a Friday morning news conference in Detroit.

Here we have American Republican Senators negotiating with foreign car manufacturers in an attempt to bring down the wages of American workers. That is beyond outrageous, that is an offence that should see them hounded out of office.


Dear God, these loons have even lost Pat Buchanan.


The Young Turks give their take on this.

Hat tip to Crooks and Liars.


Ingrid said...

Amen pat buchanan. Never thought I'd say that but I have to tell you, Buchanan can surprise you.Just when you think you got him pegged...poof..there's goes your conception of him..
so true so true..the republicans are just a bunch of corporate lackeys..


Kel said...

Buchanan can occasionally surprise, but these Toyota Republicans are so out of line that even Bill Kristol is attacking them.

Steel Phoenix said...

Pat has some issues, but he really knows his politics. I have to disagree with him on this one though. The Toyota Republicans have a conflict of interest, but this just further proves that politicians can't be trusted to decide where bailout money should go.

In the end, the free market will win out. Those who are left standing won't be those companies which have been surviving on stale ideas and government handouts.

Kel said...

In the end, the free market will win out. Those who are left standing won't be those companies which have been surviving on stale ideas and government handouts.

Like most of Wall Street?

Steel Phoenix said...

The Wall Street crash wasn't caused by a failure of the free market system. It was caused by poor credit decisions and triggered by government meddling at the worst possible moment.

A free market system would have rebounded by now, and a highly regulated market would have been continuing a slow and inexorable decline. What we have is the worst of both worlds. I don't know about the regulations in Europe, but every action the U.S. government has taken since the beginning of the housing crisis has worsened the problem.

The first thing they did when mortgages started to default was slap a bunch of regulations on banks preventing them from lending. I know, I was buying a house at the time. I had two loans become illegal after I had been pre-approved. My third one stuck and became illegal shortly thereafter.

This meant that the people who wanted to buy couldn't, the ones who were struggling to pay their mortgages couldn't refinance or sell, and the house prices tanked further. Those banks which were the biggest failures were then bailed out and rather than use that money to lend, they used it to buy out their competitors.

Where in a free market system would you see the failures subsidized to buy out the successes?

Kel said...

The Wall Street crash wasn't caused by a failure of the free market system. It was caused by poor credit decisions and triggered by government meddling at the worst possible moment.

Those poor credit decisions were taken within a deregulated free market system.

Mortgages were sold to people who couldn't afford them and those risky mortages were then sold on, removing the risk from the people who took the dodgy decision to lend in the first place.

Steel Phoenix said...

Maybe the whole credit based economy was a bad idea. Maybe we should go back to gold.

The free market was never intended to prevent failure. It is meant to embrace them.

"The economic miracle that has been the United States was not produced by socialized enterprises, by government-union-industry cartels or by centralized economic planning. It was produced by private enterprises in a profit-and-loss system. And losses were at least as important in weeding out failures, as profits in fostering successes. Let government succor failures, and we shall be headed for stagnation and decline." – Milton Friedman

What do you think would have happened if the government had just let nature take its course?

The reason those loons have lost Pat is not that he supports regulation or unions, it is that he supports tariffs. He is a protectionist paleoconservative. He wants to go back to the policies of Reagan and away from those of the neocons like Bush. He supports the bailouts from a combination of nostalgia and nationalism. The problem in a democratic war of ideologies is that you end up legislating a mixed bag, which just doesn't work right. What I have been trying to say is that this was not a true free market. Nor was it truly regulated. The failure is one of a poorly timed combination of both.

Kel said...

What do you think would have happened if the government had just let nature take its course?

SP, well obviously I am not naturally inclined to favour the bailout but we were told that without it the entire financial system would collapse and we were being told that by Bush, McCain and Obama.

Under the circumstances I felt that we had no option other than to give it to them no matter how much it stuck in our throats to do so.

Perhaps wiser economic minds than mine will one day say that we were scammed, but at the time we appeared to have no option. Sometimes, I thought, the choices are between bad and worse and I certainly thought that in this case.