Class Warfare Blog

June 24, 2017

Call Them Scum and See them Flock to Your State!

Who said “ye shall reap what ye sow?” (That particular phrase is not in the Bible, but equivalent phrases are, many times.)

Republicans have been beating on teachers for years, calling them “pigs at the public trough,” and undermining their collective bargaining rights, as well as blaming them for all of the ills of our public schools. (The last complaint is like blaming auto workers for the bad designs of General Motors cars in the late twentieth century.)

The law of unintended consequences applies, though, and Nevada, a leading Republican bastion, is facing a 22% shortage (!), that’s one in five, in qualified teachers in their schools (see here). Who needs ‘em, you ask? Ask the kids in classes that have one of the bodies plugged into place in their stead. The qualifications for teachers were not established by teachers, they were established by democratically-elected school boards and democratically-elect law makers to set minimum standards of competence for teachers. What does it say when your schools boast of having one of five teachers not up to minimum standards?

But then, many in the GOP are in favor of doing away with democratically-elected school boards anyway. Replace them with corporate boards. They are much more responsible to their communities needs.

Missing in all of this is the reason the GOP and their conservative backers have gone after unions: basically teachers tend to vote democratic and had the temerity to form unions which not only work for better benefits and rights for teachers, but also advocate for students. Them students should learn to sit down and shut up and be happy with whatever paycheck they end up with.

Too much democracy is not a good thing. This is also why GOP state governments are disempowered local jurisdictions (cities, counties, etc.) wholesale.

This is not “alt-right” stuff but alternate universe stuff. Sheesh!

May 20, 2017

An Argument for a Minimum Wage

There have been myriad studies about the impact of having a minimum wage. Some indicate that there is no particularly strong linkage between creating a higher wage for low wage workers and some indicate that a rise in the min wage causes unemployment.

The politicians arguing against a min wage use a very simplified argument: namely that if employers have to pay their workers more, they will only be able to hire so many workers, mostly fewer. This is way too simple in thinking this. For one, if people are paid more money, they then spend more money (what goes around, comes around) which is good for business. There are many more facets to this issue.

If labor costs go up, and they have myriad times due to labor contracts, etc. how, oh how, do companies cope? (Yes, I am being sarcastic.) The amount of money that goes to labor in any company is not a fixed amount or even a fixed percentage of the company’s budget. There are many, many ways that those increased labor costs can be offset. For one, you can raise prices for the goods created. You could decrease profits. You could find other ways to reduce operating costs (reduce energy costs by going solar, etc.).

Knee jerk responses to these actions abound, of course. “If we raise prices, we will reduce sales!” Really? Companies never raise prices, then? C’mon, get real. Just raising prices alone, of course, is the lazy way to deal with increased labor costs; a combination of actions would be better.

Most of these minimum wage discussions are shallow and politically motivated. Basically, the opponents of min wage increases give minimal arguments and only add to them if we don’t accept (aka we reject vehemently) their overly simplistic argument.

Let me explain a real reason for min wage increases. Minimum wage increases are justified for the simple reason is that business interests (aka the plutocrats) have conspired to suppress wages for a long, long time. This involves bribing politicians to undermine union powers and privileges, delaying minimum wage increases, changing the laws in favor of employers over employees, etc. They have been particularly effective over the past 40 years (see the chart below as to the effectiveness of wage suppression over the past 40 years). The only power source of ordinary people to oppose these powerful business interests is government. The cabal wants wages low (too low) and so government must set a floor on wages. It is not simple but at least that is the political dynamic.

If you want to see this playing out right now, consider the current stance of the GOP. The GOP has been the champion of local rights for a long time. Education, for example, should not be a federal issue, but should reside in the states, with the states deferring to local communities and their school boards. So, what has been the GOP response to cities who have enacted their own min wage increases? GOP dominated states are passing laws to roll back those democratically achieved minimum wage increases and to bar such local increases in the future. Local control doesn’t mean a fig when the GOP’s paymasters issue directives (You will keep wages down, or else).

March 20, 2017

The New Administration’s Budget

As vague descriptions of the new administration’s 2017-8 federal budget are being circulated, people are shocked, shocked I tell you, that that proposal eviscerates the Environmental Protection Agency and myriad other federal programs that actually help people (Meals on Wheels … gone, Support for Planned Parenthood … gone).

I do not see how anyone could be shocked at these long promised moves. This is the political party that has railed against and taken every opportunity to diminish labor unions, organizations that only exist to protect workers and their rights. It has also railed against Social Security and Medicare, the two most successful programs ever created to avoid poverty, especially in senior citizens.

They have reasons for doing these things, but if you watch carefully, you will see their lips moving, a clear sign they are lying. They are gutting these social programs for one big reason, their paymasters desire it. All of these efforts make working class people more compliant, less likely to strike back, and place as little opposition to what the plutocrats wish to do as possible.

The GOP said it wanted to, it tried to do it before, and now it is doing it. If you are surprised, you are an idiot.

Let me now … warn you in the most solemn manner against the baneful effects of the spirit of party….
It serves always to distract the public councils and enfeeble the public administration.
It agitates the community with ill founded jealousies and false alarms,
kindles the animosity of one part against another….

George Washington, Farewell Address, 1796

In this new era of globalization, the interests of companies and countries have diverged.
In contrast with the past, what is good for America’s global corporations
is no longer necessarily good for the American people.

Ralph Gomory, Former IBM VP

Wake up people, the corporations own this administration.

March 14, 2017

Betsy DeVos and The Christian Right’s “Big Ideas”

In Rolling Stone there is a big article on our new U.S. Education Secretary (Betsy DeVos’ Holy War by Janet Reitman). (How did Rolling Stone get from being an “entertainment” magazine to the only U.S. magazine with the balls to publish the truth?”)

Here is a condensation of one part of that article:
A staple in modern evangelical teachings is the concept of Christian spheres of influence – or what the evangelical business guru Lance Wallnau dubbed the ‘Seven Mountains’ of society: business, media, religion, arts and entertainment, family, government, and education – all of which urge the faithful to engage in secular culture in order to ‘transform’ it. The goal is a sweeping overhaul of society and a merging of church and state: elevating private charity over state-run social services, returning prayer to school and turning the clock back on women’s and LGBTQ rights. It would also be a system without a progressive income tax, collective bargaining, environmental regulation, publicly funded health care, welfare, a minimum wage – a United States guided by a rigorously laissez-faire system of ‘values’ rather than laws….

More than a few people have questioned my writing about religion in a Class Warfare blog. I tend to write mostly about fundamentalist religions, such as the DeVos family beliefs, because they are seriously at odds with reality. Tell me if you don’t think these people have a political agenda.

For example, look at the list of “features” of our society the DeVos family would rather we did without: a progressive income tax, collective bargaining, environmental regulation, publicly funded health care, welfare, a minimum wage, etc. Notice how these are all ideas that conflict with basic Christian ideology. These are very rich people, Ms. DeVos’ father created Amway, but I don’t expect them to sell all of their worldly goods and go follow Jesus any time soon. The Bible is full of regulations, pages and pages of regulations, including one to be a good steward of the land, hardly in line with the elimination of environmental regulations. Did not Jesus tell his followers to go forth and heal the sick and did he not complain when someone else did likewise (as long as it was in his name)? This is hardly compatible with the elimination of publicly funded health care. People don’t realize how much poverty and ill health there were in our senior citizens before Social Security and Medicare were implemented. These two government programs alone are responsible for pulling massive numbers of old folks out of poverty and desperation.

What the DeVos family and their ilk have done is made a new religion
out of being  politically conservative and rich.

What the DeVos family and their ilk have done is made a religion out of being politically conservative and rich. They are dead set against progressive income taxes and estate taxes as a form of “rendering unto Caesar that which is Caesar’s.” Again, this is hardly Christian, but it is right out of the rich man’s plutocratic playbook.

And we now have that new time religion at the highest levels of the US federal government with an attitude of “Well I’m rich and if you aren’t, you can go suck eggs,” the embodiment of Christian charity.

March 13, 2017

We Have Met the Enemy … and It Isn’t Us

We have met the enemy and it is … our corporations. Consider first a couple of examples:

You have heard, I am sure, of the so-called “skills gap,” which is that American workers just do not have the skills needed for “today’s marketplace,” so we need to issue more foreign worker visas to fill the necessary jobs. One of the fields clamoring for more of these visas has been Information Technology (IT). IBM, a quintessential American IT company, hid the facts for many years but now it is clear. Between 2003 and 2010, IBM fired so many American IT professionals and hired so many engineers and computer programmers in India that the workforce of IBM India is now larger than that of IBM USA. IBM India had a mere 6,000 workers in 2003 but by 2010 had somewhere in the range of 100,000-130,000 workers. How did IBM manage this into the teeth of the worst global recession ever? It did it by firing over 30,000 workers here in the U.S.

IBM calls this “cross border job shifting,” which sounds ever so much more like a transfer than people getting fired here and others getting hired there. And IBM is not alone in doing this, so how can there be a shortage of IT workers in the US when there are so many Americans who used to hold the very same jobs that are claimed are “going wanting?” What is the real rationale for the demand to be issuing more visas for foreign workers? There is no shortage of highly qualified IT workers. This is simply a classic wage-suppression tactic. Bring in foreign workers and pay them less than you would American workers with the same qualifications. This makes it very much harder for Americans to get wage increases here and also harder to form unions that would look into such practices. Foreign workers do not want to anger their employers because if they lose their job, they lose their job sponsor, and it is back to India for them. They will not join a union, period.

Now, consider another quintessential American company, Ford. Can there be a more American story involving business that the creation of the Ford Motor Company from scratch? But in the late 1990’s, Alex Trotman, Ford’s then CEO, admitted “Ford isn’t even an American company, strictly speaking; we’re global.”

And if American companies like these do not consider themselves “American companies,” how much can we expect them to act on our behalf? When I was a young man, many corporations had multiple stakeholders. These corporations considered their customers to be one, along with their workers as another, and their communities, too. And, of course, also their shareholders. Modern business practices, spurred along by quack economists like Milton Friedman, had reduced the number of corporate stakeholders to one: the shareholders. Well, just one stakeholder if you do not count the executive’s self-interest in their own remuneration, which has skyrocketed while worker wages have been experiencing trickle-up growth.

As a union officer in the 1980’s and 90’s I participated in an experiment with management of our enterprise ($150 million annual budget) on creating a more cooperative governance structure. Part of that effort was coming to an understanding of relationships between and among the two groups. One facet of that learning was that “workers” (we all worked for the company) we all tended to imbue our work relationship with trust, that is we put our trust into our employer to some extent. This was not earned trust but, basically, we trusted our employer because we wanted to have a job in which we could trust our employer. This wishful thinking trust usually had no repercussions, but when something happen that a worker or workers did not like, they felt betrayed by someone they had trusted (trusted to do what was never specific, usually it was “the right thing”). Such “betrayals” existed in collective memory for decades. (I know this as when I was hired into this company I heard “stories” from other employees. I found out later that some of them were almost 30 years old.)

We are making that mistake now. We are told by representatives of these “American companies” that we should “trust the marketplace” and “trust them.” But their actions indicate that not only are they untrustworthy but they are not even American companies. Imagine how you would feel if a foreign company, say from China, wanted to come into your community and build a plant, one with a bit of pollution associated with it. Then think how you would view that intention were is an American company? Would your response be the same? Yet, these American companies no longer consider themselves to be American, and have acted accordingly for decades now, but we still “trust” them more than we do others.

These companies have no issue with firing you and hiring a replacement from overseas and ask you to train your cheaper replacement (happens all the time, happened to my ex-wife). These companies have no problem with going through bankruptcy to eliminate their obligation to pay into their worker’s pensions. These companies have no problem with manipulating our tax laws so that they pay no taxes, with the burden to make up the difference shifted to you and me. These companies have no problem in bribing our public officials to do their bidding instead of the people’s. And if you want to know why our recovery from the Mother of all Recessions was so weak, with employment struggling to get back to anything approximating normal, realize that business leaders see every crisis as an opportunity and in this crisis they used the opportunity to outsource even more jobs. They were hiring, just not in the U.S. That is how much loyalty they have to their bottom line and how much they have to you and me.

Ironically, we have just elected a corporate businessman President to fix this mess (drain the swamp). If this were not so ironic, so funny, I would be crying. When are we going to wake up? When are we going to invest our passion and our votes in organizations, like labor unions, that have proven track records for countering these un-American corporate interests?

Wake up people! It is very close to “too late.”

March 10, 2017

When They Told You “You Can’t Trust the Government” They Really Meant …

The GOP and corporate interests have waged a propaganda campaign over the past few decades with one of the primary messages being “You can’t trust the government.” They expanded from there to include “You can’t trust experts.” (What do they know about anything?) and “You can’t trust schools” (They are all failing.) and “You can’t trust teachers.” (They are just in it for the money. They need to be easier to fire.) and “You can’t trust government employees.” and many, many more of our social institutions. They didn’t even bother with “You can trust labor unions,” because they had already sold that trope to workers. Imagine that, working people were convinced that labor unions, the only force that could oppose the wage suppression efforts of corporations and their hired government, were not to be trusted. Amazing. Equally amazing is that these people are referring to them selves as “conservatives,” you know, those people who support our basic institutions and social structures over most anything else.

But, when they said “You Can’t Trust the Government” what they really meant was ““You Can’t Trust the GOP to Run the Government.” A case in point, one of many, is the Secretary of State of Mexico was visiting and had meetings scheduled at the White House. A member of “The Media” (Oh, “You Can’t Trust the Mainstream Media.”) called the U.S. State Department to find out why the Mexican Sect’y wasn’t meeting with our SOS; they were told “We were unaware he was visiting.”

Think about this: a political organization which has a platform that you cannot trust the government gets in charge of said government, which do you think they are more likely to do:
a. perform their duties to the best of their ability, or
b. mess everything up so people will be more disgusted and more untrusting of their government.

If you think the answer is “a” then the “best of their ability” is woefully short of the mark and constitutes a danger to all of us. If you thought the answer is “b” then we have elected gremlins to our highest offices.

In either case, boy, are we fucked.

March 7, 2017

The GOP on the Move!

Slow to begin, the GOP legislative onslaught is picking up steam. Here is a partial list of some of their coming hits:

HR 610 Vouchers for Public Education — (The bill also repeals basic nutrition standards for the national school lunch and breakfast programs.)
HR 899 Terminate the Department of Education
HR 785 National Right to Work (aimed at ending unions, including teacher unions)
HR 861 Terminate the Environmental Protection Agency
HJR 69 Repeal Rule Protecting Wildlife
HR 370 Repeal Affordable Care Act
HR 354 Defund Planned Parenthood
HR 83 Mobilizing Against Sanctuary Cities Bill
HR 147 Criminalizing Abortion (“Prenatal Nondiscrimination Act”)
HR 808 Sanctions against Iran

Actually, I can get behind the HR 899 effort. The Federal Department of Education has been either an embarrassment or a front for the privatization of public education (Arnie Duncan!). So this is no great loss. But what do the other bills have in common? Oh, if the GOP is suggesting it, it favors the rich!

HR 610 Vouchers for Public Education The rich have been trying for decades to get the private religious school educations they provide their children and currently pay for out of pocket to be paid for by the public. That and they also want to send their kids to lily white schools, preferably one with Country Day School in its name. And even the little touches are precious: with the repeal of the basic nutrition standards for school meals, ketchup is finally a vegetable again.
If the GOP is suggesting it, it favors the rich!

HR 785 National Right to Work This is famously anti-union legislation. The GOP is financed by corporate employers who wish to suppress worker’s wages. They have been doing a fabulous job of just that for the past 40 years, but still any opposition to their wage suppression scams is not to be countenanced. The plutocrats have pulled the fabulous rhetorical trick of getting their white, working class base to hate unions, the sole power player that can help them against the tyranny of the corporations.
If the GOP is suggesting it, it favors the rich!

HR 861 Terminate the Environmental Protection Agency Who needs the EPA? Clearly businesses do. When Ronald Reagan called in William Ruckelshaus to tame the EPA’s burgeoning bureaucracy, Mr. Ruckelshaus was astonished to receive encouragement to strengthen the EPA from none other than several chemical industry chief executives. Their message was that “the public, they told me, was spooked about the turmoil at E.P.A. Americans didn’t believe anything was being done to protect their health and the environment. They didn’t believe the E.P.A., and they didn’t believe the chemical industry. These executives had concluded that they needed a confident, fair and independent E.P.A. They knew that an environmental agency trusted by the public to do its job gave their businesses a public license to operate.” But the GOP just can’t help themselves, can they? All of those burdensome regulations hinder the American genius for making money (for plutocrats). Who needs air to breath and water to drink, we need jobs! (Remember the Goose That Laid the Golden Eggs?)
If the GOP is suggesting it, it favors the rich!

HJR 69 Repeal Rule Protecting Wildlife Hey, they have tooth and claw and don’t they have their own law about those? Let ‘em protect themselves. Under other new GOP legislation they will be allowed to buy firearms with no background checks, just like everybody else.
If the GOP is suggesting it, it favors the rich!

HR 370 Repeal Affordable Care Act The rich get a tax cut, the poor get early graves, a “win-win” situation for the GOP.
If the GOP is suggesting it, it favors the rich!

HR 354 Defund Planned Parenthood First they complain that people of color are having too many babies, now they want to make it so they have to have them. Don’t expect any consistency here. This was a campaign promise (not of Donald Trump’s) and a promise is a promise, even if the Planned Parenthood “issue” is another straw dog, like “Acorn.”
If the GOP is suggesting it, it favors the rich!

HR 83 Mobilizing Against Sanctuary Cities Bill Hey, we said “state’s rights” not “cities’ rights.” Local control? Nope, not while the local control guys are in power.
If the GOP is suggesting it, it favors the rich!

HR 147 Criminalizing Abortion “Doctors, lock ‘em up!” According to the GOP, those babies must be born before they can be abused and legally executed. It is a matter of the rule of law.
If the GOP is suggesting it, it favors the rich!

HR 808 Sanctions against Iran The GOP cannot help itself, it has to “poke the bear.” The Big Bear is Russia but Iran is an ally of Russia, so close enough. The neocons and apocalyptic proselytizers (Steve Bannon, et. all.) want war now because it will only get harder to wipe out those enemies of Christ as time goes on and the MIC says “There are no profits like war profits.”
Oh, and, if the GOP is suggesting it, it favors the rich!

 

March 6, 2017

GOP Plans to Repeal Dodd-Frank Legislation

Why do we need legislation that prevents big banks from undermining the whole world’s economy with overly risky investments? We can trust them. They are our friends.

Granted the Dodd-Frank legislation didn’t go nearly far enough (millions of dollars per day were spent lobbying against the law in the first place and weakening it and then against its implementation after it was passed). The Glass-Steagall law should have been re-enacted verbatim, plus a whole lot more, but “burdensome regulation” is undermining progress in this country (whine, whine, sniff). This is why the big banks circumvented the existing regulations, corrupted regulators, and invented unregulated shadow banking in the first place.

We will only be free when big banks can wreak havoc as much as they desire … and, of course, our government bails them out every 6-8 years when it all crashes into ruin. Heck, the last time only cost us $2,000,000,000,000 (yes, that is two trillion dollars plus or minus a few billion or so) plus several trillion more in lost property values, but that only affected ordinary citizens (they got no bailout, don’t you know).

At this point, I am starting to root for the GOP’s bad ideas. The party has so desperately wanted to do all of these things for years! And they are going to own the repercussions of each and every one of them.

March 3, 2017

The Utter Failure of Economics and Politics to Prevent the Ravaging of the Rich

I ran across this rather incredible graph recently:

20-year-annualized-productivty-growth-in-the-uk

The data are from the UK so I looked to see if I could find any similarities to data from the US, and yes, they are there.

The graph shows the growth of worker productivity from the years 1800 to 2010. Since all of the values are positive, productivity has trended upward in general. But you can see four distinct trends on this graph: first there is a strong increase in productivity from 1800 to about 1870, then a general decline in the rate from 1870 to about 1900 (while still being positive, the amount of increase dropped period by period). Then there is another long period of productivity increase improvements from roughly 1900 to the mid 1970’s, followed by another decline in the rate of increase from 1970’s to the present.

What do these periods in which productivity changes steadily decline in magnitude correlate with? Ah, the period 1870-1900 is often referred to as the “Gilded Age.” And the mid-1970’s to the present started with Reganism/Thatcherism and is the second great period of wealth transference to the few in this entire time period.

We have been told over and over that the accumulation of wealth by the few in our society is a good thing. The wealthy are the “job creators,” the movers and shakers who get things done. But the reality is exactly the opposite. The people who have been telling us that wealth inequality is a standard feature of capitalism and a “good thing” are just the PR men for the wealthy, trying to avoid pitchforks and torches showing up in the gated communities of their rich paymasters. That so many of these flacks are economists should be appalling to the intellectual community. (Maybe we should disbar them and transfer academic economic departments to become part of the marketing programs of schools of business.)

All of the data show that periods of extreme wealth accumulation by the few devastate economies instead of facilitating them. The steepest upward portion of this graph takes place between the end of World War 2 and the arrival of Reganism/Thatcherism and anti-unionism. Productivity grows the fastest when the wealth is shared more fairly.

Please note that there were rich people during this post-war period. There were many people getting rich for the first time. They weren’t, however, getting filthy rich by distorting the political systems in their favor. Becoming rich through your own skills is one thing. Becoming obscenely rich by hook or crook, though, hurts all of us.

February 23, 2017

Why Do Conservatives Want to “Let the Markets Rule?”

It is axiomatic that conservatives want there to be as little government regulation of economic markets as possible, because they claim that “the Invisible Hand of the Marketplace (Adam Smith)” guarantees the best possible outcome and the more we interfere with that, the poorer the outcome will be.

Conservatives say this as if it were a fundamental truth of economics.

Recently a prominent economist died (Kenneth Arrow) and his work is often held up as part of said proof of the infallibility of markets. As the obituary writer put it “Professor Arrow proved that their system of equations mathematically cohere: prices exist that bring all markets into simultaneous equilibrium (whereby every item produced at the equilibrium price would be voluntarily purchased). And market competition puts society’s resources to good use: Competitive markets are efficient, in the language of economists.” (Amen!)

But to prove that particular economic theorem a certain number of “assumptions” had to be made. Here are some of those:
•  all markets are perfectly competitive (all buyers and sellers have perfect information, no buyer or seller is big enough to influence prices)
•  markets in different locations are different/separate markets (so the market for milk in California doesn’t affect the market for milk in Illinois)
•  all markets contain “forward markets” as futures markets in which you can contract to buy anything, for example pork bellies (to make bacon, we hope), for any future year … forever
•  plus, of course, everyone has perfect foreknowledge of those futures markets, too.

This work is considered foundational in economics, earning the authors Nobel Prizes, etc.

Now, what that work actually proves is exactly the opposite of what is claimed. The work shows that markets are perfect and benefit society only with those pre-conditions. Of course, no such markets exist or can exist with those elements in play. What they proved was that the conditions for the trust people place in markets to “do the right thing” are only available in Never-Never Land.

Think about it. If one had perfect information of the future of the prices of pork bellies or any other commodity, why would trades be made? Currently, futures buyers buy future goods because of price uncertainty. The thinking is “I am going to buy now when the price is reasonable because I think the price is going to go up.” You certainly wouldn’t “buy now” if you knew the price was going to go down. And why would a seller sell to you at the current low price if he knew he could get a higher price by just waiting?

All of these assumptions are bogus. You cannot say that the local market for celery in California is unconnected with the local market for celery in Illinois when virtually all of the celery in the U.S. is grown in California. Similarly (and if you hadn’t been around for the past 50 years or so) we couldn’t get tomatoes or fresh fruit in the winter months (or lettuce, etc.) and we made do with substitutes (cabbage for lettuce, etc.) until the fresh, local harvest came in. Now, all winter long we get produce from Mexico, Peru, Southeast Asia, etc. We can have tomatoes and lettuce all winter long. Many of these markets are global making them most definitely not local.

And, then we have advertising to make sure that seller and buyer do not have the same information. (If you think advertisers are trying to share information, wake up!) And so, in no market is there “perfect information” for both buyer and seller.

So, getting back to the original question: why do conservatives want to “let the markets rule?” They actually do not want this. What they want is minimal or, better, no regulation of what they are allowed to do to make money. The “free markets” economics is just a smokescreen for “Do not tell me what I can do!” Further proof of this is the fact that these same people are trying to get advantages for their business written into law: tax breaks, labor favors (labor unions are disadvantaged in “right to work” states), and if they can pull it off: monopolies. Of course, these people say “competition is good,” but basically they want none of it.

If you want a case history of this in action, look at the U.S. automobile industry over the last 50 years or so (post WW2). At the beginning of that period the U.S. car market was dominated by Detroit Iron, mostly in the form of huge, heavy vehicles that got very poor gas mileage (even into the single digits of mpg). Foreign imports began to trickle in in the form of small, gas thrifty cars like the Volkswagen of Germany and Japanese imports (Honda, Subaru, Suzuki, etc.). The major U.S. manufacturers looked down their noses at these vehicles: they were small, had little power, and even less chrome details. But then there were the gas crises of the early 1970’s. All of a sudden, having a gas thrifty car was quite desirable. Sales of “imports” skyrocketed and American manufacturers started bringing out “economy models” to compete. But if “competition was good” Detroit was having none of it. It sought and got protection from the federal government which limited the numbers of cars that could be imported. Japan, previously content to be sending smaller, cheaper cars to the U.S. saw an opportunity. If it could import only so many cars, those cars should provide more profit than the small economy models, so they started importing higher end vehicles (still not luxury models, like the Lexus, but higher end vehicles). These vehicles were much better made that U.S. vehicles and offered much better gas mileage, too, so people snapped them up in droves. Having their numbers restricted also drove up prices because there were only so many around. (This resulted in the cars available being snapped up close to ports of entry, so people in Middle America didn’t notice this at first, but the coasts were bristling with imports.

So, the reaction of Detroit? Going back to Congress and asking for more protection.

At the same time, automotive safety standards were being introduced at the federal level. I remember watching the hearings regarding having a “5 mph bumper.” Detroit’s “Big Three” auto makers said such a requirement (that a car would survive a 5 mph collision with little or no damage—5 mph is a brisk walking speed) would bankrupt them. All of these manufacturers supported this claim. Then a witness, a “shade tree mechanic,” testified that he had a 5 mph bumper, all tested, and available for license that he had made that cost just about the same as what Detroit was paying for bumpers then. These whinging, uncooperative titans of industry certainly lost credibility in front of Congress, which hurt their efforts to get protection from their competition.

So, these claims of markets and competition are “good” are just smokescreens for what they really want: a guaranteed path to make as much money as they wanted to with no interference, certainly not regulations on fuel economy or safety. They preferred to compete on the basis of which cars had the most shiny bits, so as to impress your neighbors when the car sat in the driveway.

Granted, there are some conservatives who probably believe the economic BS (they aren’t a particularly bright group) but that doesn’t make their beliefs true. The real problem is the public has been brought to a similar belief because of the repetition of the false claims over and over and over. I used to carry a spray can of bullshit repellent for just such utterances, maybe I should produce those for sale. The market should be strong.

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