The Bush Administration, assisted by Congress, used a double standard in the doling out of the huge amount of “bailout bucks” in its last stand for Bush’s corporate buddies. Interestingly, the bailout battle developed into one more about class than economics. President Bush and Congress pretty well gave the Wall Street bankers – our Nation’s financial royalty – a blank check with no real safeguards or controls to protect the American taxpayers when they authorized what was then said to be $700 billion in bailout bucks. During the limited debate on that bailout package nothing was said by anybody in power about the banking royalty flying into Washington in their corporate jets with hands out, but with no real explanation as to what had caused their fiscal problems or how the money they wanted would be spent.
Royalty are always treated differently in our Nation’s Capitol and certainly not like any working class folks who may happen to show up there. Consider that the bailout bucks were authorized when Treasury Secretary Paulson – on orders from the Bush White House – showed up with a three-page document demanding Congressional approval for a bailout of Wall Street. Congress in almost record time caved in to the demands of the elite of the banking royalty and pretty much turned over the keys to the federal treasury without any real protest. Where was a well-defined justification for receiving the money and a plan on how it would be spent? What assurances were given to Congress by the banking royalty for what they would do with the money?
But when the American automakers showed up asking for help it was an entirely different story. To put it mildly – all Hell broke lose in Congress and politicians lined up to get in their licks. While the CEOs of GM – Ford – and Chrysler didn’t do much to help their cause, it was a totally different game for them on the Hill. Some say it was because the automakers are really a blue collar outfit – even if their big bosses act like royalty – and as a result they are a much easier target. The attacks on the workers who make the cars started quickly and the attackers never let up. The Unions were sort of like the Christians in the Lions’ Den and the attacks on their members were more than brutal. During the attacks, the attackers didn’t always let the truth stand in their way and a great deal of misinformation was fed to the media. While everyone concedes there must be real changes in the way the American automakers operate, the Unions are not the real problem. If you check the record you will find that comparing the U.S. companies to their foreign competitors can be very misleading unless you dig deeper into the differences that really matter.
For example, when the attackers tossed out the $73 per hour pay scale for Union autoworkers they didn’t tell us that the number included all of the health-care and pension costs of retirees, all of the training costs, and all of the payroll taxes that the companies have to pay. I understand the base wage of a veteran UAW member is about $29 per hour. When you consider that a non-union worker in Toyota’s Kentucky plant is $26 per hour, you will see that the pay scales are actually pretty close. The most recently-negotiated Union contracts will lower a domestic company’s total labor cost to a level on par with what most Japanese companies are currently paying non-Union American autoworkers. Some experts say the ever-rising cost of healthcare is the American automakers’ big problem. Before the GOP Senators condemn America’s Union workers, you might want to find out how healthcare costs are handled in Japan, Korea and in the European countries that are building their automobile plants on U.S. soil. National healthcare – financed by these foreign governments and their taxpayers – are very much a fact of life in those countries.
Regardless of how you might feel about Unions, it’s abundantly clear there was a definite double standard in play when the corporate bailouts involving the financial royalty and the automakers were being discussed in Congress. In my opinion, the banking royalty and the automobile manufacturers along with their Union workers should have been treated the same. Neither should be given a pass if their prior conduct had contributed to the economic mess these industries find themselves in.
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