Senate GOP to UAW: Drop dead

Organized labor campaigned mightily against Southern Republican senators. So kiss that auto bailout goodbye, because now it's payback time.


Andrew Leonard
December 12, 2008 3:14AM (UTC)

So many ills are afflicting the U.S. economy right now that to single out any particular indicator as responsible for depressing investor sentiment is foolhardy. But let's just say, for the sake of argument, that the news that Senate Republicans nixed the auto bailout was the guilty party in triggering Thursday afternoon's 200-point fall in the Dow Jones industrial average.

If so, the drop might stand as the first verdict of history on what may be remembered as an epochal event and, potentially, a huge blunder. If the Senate Republicans really have killed the bailout, and if, say, General Motors is indeed forced into bankruptcy before President-elect Obama takes office, isn't there at least a chance that a collapse so massive could propel an already crippled economy into a near-death state?

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Attentive readers know that I have gone back and forth over the bailout-vs.-bankruptcy question. I'm not confident that a "car czar" could successfully restructure the industry in a new profitable form. I have never been a fan of Detroit's long-term strategy, and have always been incensed at the opposition of the Big Three to increased fuel economy standards and efforts by states such as California to reduce greenhouse gas emissions. They don't deserve a bailout.

But then again, neither did Wall Street. The presumption, as we were told by the likes of Senate Minority Leader Mitch McConnell, R-Ky., was that the consequences for the greater economy would be simply too disastrous if we just stood by and watched as the financial titans whose own greed and irresponsibility created this mess crashed and burned. And that was back in September, several months before the economy started losing half a million jobs a month (a number that seems sure to go up judging by today's awful jobless claims figures). The U.S. economy is in much worse shape than it's been for at least a quarter-century, and appears to be unraveling at terrific speed. Thus, an even more timely case can be made for saving Detroit as was offered for Wall Street. Does it really seem like right now is the best time to see what happens if G.M. declares bankruptcy? As a worst-case scenario, might not it be better to help Detroit limp along for another year or two, until we see whether we can get out of what our current president not too long ago called "a rough patch"?

Both Bush and Obama agree: Doing nothing is a bad idea.

From the New York Times:

"We believe that the economy is in such a weakened state right now that adding another possible loss of one million jobs is just something our economy cannot sustain at the moment," Dana Perino, President Bush's chief spokeswoman, said at a news briefing.

Mr. Obama sounded a similar theme.

"I understand people's anger and frustration at the situation our auto companies find themselves in today," Mr. Obama said at a news conference in Chicago ... [but] at this moment of great challenge for our economy, we cannot simply stand by and watch this industry collapse. Doing so would lead to a devastating ripple effect throughout our economy."

And yet, now, none other than Mitch McConnell tells us enough is enough. There's no sugarcoating this one -- what's good for Wall Street fat cats is not good for unionized Midwestern workers. It's hard not to agree with the Detroit Free Press: We're witnessing payback time for the UAW. Republican senators are on the warpath against organized labor.

Over the last decade, the UAW has spent more than $10 million to elect Democrats and defeat Republicans -- some of them the same GOP senators now being asked to rescue the domestic auto industry ...

Sens. Richard Shelby of Alabama, Bob Corker of Tennessee and Minority Leader Mitch McConnell of Kentucky represent states where foreign automakers have significant operations and the UAW has less sway than in Michigan or Ohio. Each also has been the target of considerable political support from the automakers' union flowing to Democrats who have opposed the senators in elections.

Complicating matters for the union -- which has been lobbying hard for passage of the rescue plan -- is that it threw its political weight behind many of the Democratic opponents who managed to beat Republican incumbents last month. Now those same defeated GOP senators are being asked to save the domestic auto industry from ruination before giving up their seats.

An extra dose of humiliation for Detroit: Sweden is bailing out its own domestic automakers, Volvo and Saab, even though they are owned, respectively, by Ford and G.M.! Little old Sweden is bailing out Detroit's mistakes, while Senate Republicans play the fiddle and watch the economy burn.

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It seems hard to conceive that G.M. and Chrysler could not somehow manage to totter forward just one more month, when Obama will take office with a significantly strengthened Senate majority and presumably a much more potent bully pulpit. And perhaps there is still some last-minute backroom dealmaking going on in the Senate. But it's not so difficult for me to imagine looking back at this point from the perspective of a future historian detailing the events that led up to the Second Great Depression, and deciding to pinpoint the abandonment of Detroit as yet another grievous error that ensured a patient barely holding it together on life support went terminal.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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