President Obama, announcing the nationalization of General Motors–one of the more dizzying recent developments in American capitalism–sought to soothe startled free-market sensibilities by promising to “get GM back on its feet, take a hands-off approach and get out quickly.” This was not enough to appease his rabid critics on the right, such as Republican National Committee chair Michael Steele, who condemned the move as “another government grab of a private company” and a “handout to the union cronies who helped bankroll his presidential campaign.” The alternative course Republicans apparently prefer is the liquidation of the company, a position galling in its indifference to this country’s economic and human needs.
At the same time, however, Obama’s message, coming only nine weeks after his administration demanded that GM “slim down” in order to qualify for federal help, must have been hard to hear for GM workers, 21,000 of whom are slated to lose their jobs as the firm closes US plants and shifts production to low-wage countries. As Robert Reich observed of the government’s stick-’em-up stance toward the auto companies, “Having General Motors or Chrysler cut tens of thousands of jobs in order to be eligible for a government bailout reminds me of ‘saving’ Vietnam by bombing it to smithereens.”
It is more than clear by now that the goal of this intervention is not to help the workers who are suffering the effects of this devastating downturn. It is not even about saving Detroit: when pressed on whether the “new GM” would move its headquarters, the president reportedly responded that it would be a “commercial decision” and he “wouldn’t get involved.” Nor is this part of a bold new industrial strategy, let alone a step toward a more ecologically sustainable economy. It is a company bailout. As such, it is not only a letdown for American workers but a missed opportunity for the Obama administration to live up to its transformational rhetoric.
Some believe that the $50 billion taxpayer investment in GM is merely buying time–that the once-mighty auto giant is bound for the scrapheap, taking its remaining 60,000 jobs with it. They might be right. To be sure, the half-million-plus middle-class jobs GM used to provide as the bedrock of the economy are unlikely to return. And after the economic meltdown of the past year, we are facing a national unemployment crisis. By the administration’s own estimate, the stimulus will create or save 3.6 million jobs over the next two years. But 28.5 million workers are already effectively unemployed, and 3 million more are likely to lose their jobs over the next twelve to eighteen months. Because the government has responded to this crisis by addressing the needs of companies first and foremost rather than those of workers and communities, we appear to be headed for a jobless recovery.
A smarter government policy on manufacturing could be the starting point for a long-term solution to the jobs crisis–and protect the planet at the same time. There is little question that the auto industry needs retooling. In the past decade, Americans bought more than 17 million new cars a year, many financed through home-equity loans and easy consumer credit. That economy is gone; even the rosiest of estimates puts new sales at less than 10 million a year through 2010. And even if consumer lending ultimately bounces back to pre-crash rates, the combined effect of the recession and the climate crisis may be to jolt Americans into breaking their addiction to the car culture.