Since there’s one standard for automakers and another for bankers, the quickest way for GM to pick up some loose change would be to buy a few banks and thus get the company’s mitts on some of the Treasury’s $700 billion. If insurance companies are doing it, why not GM?
A story on the Bloomberg wire on November 17 told us that four of the world’s biggest insurers, including Transamerica and Hartford Financial Services Group, may buy some ailing S&Ls in trouble with the Office of Thrift Supervision for making shifty loans. That way the insurance giants can join the excited line at the back door of the Treasury’s Troubled Asset Relief Program (TARP) and dip into the moolah. “Hartford’s $10 million acquisition of Sanford, Florida-based Federal Trust Corp.,” Bloomberg’s reporters wrote, “may entitle it to $3.4 billion of U.S. capital. Lincoln National in Philadelphia may win access to $3 billion by taking over Newton County Loan & Savings, which has three full-time employees and $7.3 million of assets.”
Whenever the issue is one of giving money to big industrial corporations employing real, live workers, particularly workers in labor unions, the commentariat hauls up the Double Standard and nails it to the top mast, next to the Jolly Roger.
Last Sunday I had the usual urge to machine-gun the TV set while listening to the McLaughlin Group, all of whom presumably haul home at least $200,000 a year, as they deplored the unconscionable wages of line workers in Detroit. The same urge flares up when reading the Wall Street Journal‘s editorial page. As a matter of economic principle, the WSJ‘s editors have always taken a stern line about letting the weak die in the snow.
In the November issue of Le Monde diplomatique, editorial director Serge Halimi quotes George Melloan, a particularly bloodthirsty sidekick of the late Bob Bartley, commander in chief of the WSJ‘s editorial pages for many years. Melloan once recalled, “Before President Reagan, Jimmy Carter had named Paul Volcker Federal Reserve chairman to kill inflation. Paul invited Bob [Bartley]…and me to lunch at the New York Fed not long after he was selected, and asked: ‘When there’s blood all over the floor, will you guys still support me?’ I responded ‘yes’ without waiting for Bob, which was [a] clear breach of etiquette. There was blood indeed, as over-extended Latin borrowers and American farmers were caught out by a return to a sound dollar. But we held fast.”
So it was the law of the capitalist jungle for millions in Latin America or farmers driven to bankruptcy and suicide in the Midwest, but when it came to prostrate bankers, the Angel of Mercy descended from heaven and took up residence in the WSJ‘s editorial suite. On September 27 an editorial approved of the $700 billion banker bailout. Then came GM’s crisis. On November 10 the Angel of Mercy quit the Journal‘s editorial page abruptly: “We hope Messrs. Bush and Paulson just say no. The Tarp was intended to save the financial system from collapse, not to be a honey pot for any industry running short of cash.”
You see, shoveling money at Goldman Sachs and the other titans of Wall Street constitutes systemic rescue of the billionaires vital to national well-being and self-esteem. Stabilizing the remaining core of America’s industrial base, particularly a core infested by people with union cards, is quite another matter. In the same editorial the Journal flailed excitedly at its favorite targets: “While GM has spent billions of dollars on labor buyouts in recent years, they are still forced by federal mileage standards to churn out small cars that make little or no profit at plants organized by the United Auto Workers.”
Of course, the target of the WSJ and of the Republicans and DLC Democrats in Congress is organized labor. The WSJ again: “The very success of this U.S. auto industry indicates that highly skilled American workers can profitably churn out cars without being organized by the UAW.” The aim is to use the current crisis of GM–a company that in world terms is doing reasonably well–to help it renege yet again on its health obligations to its workers, active and retired, and cheapen the cost of domestic industrial labor. Auto parts factories haven’t all been shipped to China. In fact, they are flourishing in the Midwest. It’s just that they aren’t union shops, aren’t as dominated by the white and black working class; rather, they are nonunion, usually antiunion, sweatshop-type factories with few benefits and an increasingly Latino and undocumented workforce. These shops have been springing up and expanding over the past few years, but the workers have had virtually zero bargaining power. Remember also, being mindful of the November 4 benchmark in America’s history, that those auto plants really are the last stand for the black industrial working class.
If America loses its auto industry, it means maybe 5 percent of the workforce will be on the street. Finance capital wants it all. The head of the FDIC wants $24 billion to help mortgage holders, and Paulson says no. GM wants $25 billion in loans, and Washington says no. The Democrats had better remember who put them back in power and in the White House.
Obama doesn’t need to read histories of FDR’s first 100 days to know something elementary. As economist Paul Craig Roberts remarked in CounterPunch recently, “A country that doesn’t make anything doesn’t need a financial sector as there is nothing to finance.” A country without decent manufacturing jobs doesn’t have citizens and immigrants with the money to buy things, hence to keep the economy afloat. A country without a sane housing policy will end up with nothing but palaces and trailer parks. A government seeking a sane manufacturing policy, a sane housing program and a well-considered strategy for investment and recovery cannot hope to move in this direction with Wall Street financiers in the control room.