Is "Dealergate" a Real Concern?

The conservative blogosphere is abuzz with news that many of the Chrysler dealerships that were ordered to be closed, were owned by big GOP contributors. Only one store that gave to Obama was closed.

Are there legs to this story? Well, it wouldn't surprise me if there were partisan shenanigans, but I also wonder if people are trying to see a pattern where none exists.

In the end, though, I have to wonder if this is an issue we should be worrying about when there are bigger fish to fry.

Thoughts?

How the GOP Killed the Reagan Democrats

There is a lot to be said about the whole Obama-taking-over-the-American-auto-industry line, but the thing that has been bothering me for months is how Republicans have dealt with the current situation, which is to say, they have dealt with it by acting rather boorish.

Now, I know some liberal wags will say that this is the only way that Republicans know how to act, but that is not neccessarily so. Listening to this recent comments like this one from Kevin Hassett and the recent glee from some conservatives on the Swedish Government deciding not to support Sabb as well as Senators like Richard Shelby rants against the the Big Three has made it seem to many a worker living in states like my native Michigan, Illinois and Ohio that the GOP doesn't give a damn about them or their lives.


And the fact is, those workers are in a way correct.

There was a time when conservatives led by Ronald Reagan, went after the Reagan Democrats. The GOP was interested in getting these blue collar voters in the Industrial Midwest.

But that was so, 1982.

Now, it seems that the GOP has lost interest in these states as they have with other parts of America save the South. There is a lot of cheering about how Sweden is allowing the free market to deal with Saab, and how we should be doing the same thing here. That is all fine and dandy. In some cases, it would make sense for GM and Chrysler to just deal with bankruptcy to get their financial houses in order.

And I agree with fellow conservatives that yes, the UAW has to share some of the blame here by wanting benefits and pay that was beyond what the companies could afford.

But what happens after that? What do you tell the guy who has worked at a GM plant in Michigan for 20 years and gets laid off in order to help GM restructure? What do you tell that person who might not have any other skills and now has to try to get retraining? What does the GOP has to say other than the wonders of the free market?

Right now, we have nothing to say and that has made that worker decide to vote for the Democrats since they do have something to say.

As the writer at New Majority.com who goes by "Henry Clay" notes, that a lack of real policy from the GOP means that the Republians have lost the Reagan Democrats. He opines:

The near total collapse of the American auto industry in the Upper Midwest means that conservatives can finally stop their search for those working-class Reagan Democrats. In part because of the free-market revolution that Reagan inspired and presided over, the Reagan Democrats are now either retired and living in Florida or on public assistance.

Whatever happens next with GM and Chrysler, we are looking at further deindustrialization and depopulation for the Great Lakes states. And absent thoughtful reform on the part of conservatives to alter the course of these communities, this phenomenon will only further harden Democrat sympathies in the region.


The last 30 years have not been kind to the Upper Midwest, and its voters are increasingly unkind to Republicans. In 1980 Ronald Reagan won the state of Michigan, along with Wisconsin, Illinois, Indiana, Ohio, and Pennsylvania. Those states gave Reagan 123 electoral votes. In 2008, Barack Obama won all of those states, but they gave him only 100 electoral votes.

Clay goes on to note how the the Reagan Revolution did win the Reagan Dems over, but even despite some successes, left them behind. His example is my hometown of Flint, Michigan:

In spite of their decreasing electoral significance, Republicans cannot afford to ignore these communities. The Northeast and Pacific Coast are long gone. The Mountain West is trending leftward, and the last election showed that Republicans will have their hands full even in the once Solid South.

Reclaiming some ground around the Great Lakes is essential to a Republican revival, but the sympathies of these Great Lakes communities lie increasingly with the Democrats. Consider Michael Moore’s Flint, Michigan. Conceding that Moore is a congenitally dishonest person, his 1989 film Roger & Me did capture the impact of deindustrialization on this one local community. In 1960 the city’s population peaked at almost 200,000. Local GM employment hit a high of 80,000 in 1978. Today, the city’s population is roughly 110,000. And following the 2006 round of GM buyouts, only 8,000 GM workers remained in Flint.

Conservatives should not be afraid to acknowledge that for all of its successes, the Reagan Revolution left Flint and many other post-industrial communities behind.

Instead, however, conservative sentiment is too often a combination of satisfaction that the UAW finally got what was coming to it and belief that citizens in these towns are free to vote with their feet if they are not satisfied with their station.

Republicans don't have to try to prop up GM and Chrysler, but they do have to do something for the many who will lose their jobs, be it money for retraining, or increased unemployment benefits for the newly unemployed. There needs to be a domestic policy answer to help people in Michigan and other states that have been hard hit by the woes in the auto industry.

So, why haven't conservatives come up with any ideas? I think part of the problem is that the GOP has become to see conservatism as more of a lifestyle than a guiding ideology. It has become a place that welcomes those who fit into the movement and ignores those that don't fit. In this case, since conservatives don't like unions, they see the workers at GM, Ford and Chrysler as getting what was coming to them. Conservatism has gone from being interested in governing to being interested in being countercultural, in not fitting in or as David Frum notes, it is more interested in protest than in politics. As David Frum goes on to say:

We saw a country divided in two, red states and blue, NASCAR vs. NPR, real America against the phonies in the cities. A movement that had begun as an intellectual one now scornfully pooh-poohed the need for people in government to know anything much at all. But expertise does matter, and the neglect of expertise leads to mismanagement and failure — as we saw in Iraq, in Katrina and in the disregard of warning signals from the financial market. It was under a supposedly pro-market administration that the United States suffered the worst market failure of the post-war era, and that should have sobered us. Instead, we rallied to Sarah Palin and Joe the Plumber.


Disregarding evidence and expertise, we shrugged off warnings of environmental problems. One consequence: In 1988, the elder George Bush beat Michael Dukakis among voters with four-year degrees by 25 points. In 2008, Barack Obama won the BA and BSc vote, the first Democrat to do so since Lyndon Johnson in 1964.


Conservatives stopped taking governance seriously — and so Americans ceased to trust conservatives in government.

What has happened is that we stopped caring about getting votes and winning elections. What is happening is that there is some cache of being seen as out of touch, culturally alienated. The Republican party has become a support group for conservative culture, a place of safety in world that doesn't seem to friendly. While such a role for a GOP might offer safety and succor, it basically assures the GOP to be consigned to a minority party for a very long time.

As a Republican, I totally understand the notion of free markets and support it. I understand that the Big Three were slow to change and become more nimble in the marketplace and should suffer some consquences for that. I think unions aren't all bad, but they have done a lot to bog down the Big Three against their foreign competitors. I am not against seeing the Big Three face bankruptcy.

But I am also the son of two retired autoworkers. I might disagree with them on politics, but I respect their hard work. They went to work in pain, to make sure I had a good life. My dad worked for General Motors for almost 40 years and my mother for 25. It's hard work and their bodies show it. As their son, I can't tell them that they are on their own. I have to offer them and the many like them something more for their years of hard work.

If the GOP wants to be a winning party, it has to offer something to these workers. They can be pro-worker with out being pro-union. They have to be. Cheering the free market and telling these workers to drop dead is the way to ensuring the GOP's downfall.

Dissin' Detroit and It's Consequences for Conservatism

Now that President Bush has decided to go over Congress' head and provide General Motors and Chrysler bridge loans through March, I think now is the time to see how the GOP and conservatives in general handled the issue. This is only my view and it's the view of a crank living in Minnesota. However, in the glorious age that we live in, with handy little computers connected to the internet, one crank can share his views with the whole world and that's what I am about to do.

In my opinion, I think the GOP and conservatism in general failed the test. We were correct on the merits: private businesses should not run to the government for help and should succeed and fail on their own. However, we failed in really looking at the situation around us and seeing if this we could apply this principle at this time. I think we were intellectually lazy, not willing to get from behind our computers and see what was actually happening on the ground. In the end, this shows a problem with conservativism in America in general and has hurt the GOP's chances to make a convincing case in the Midwest.


I've read enough from bloggers at how we should not support a declining industry. For example, this is what David Brooks (a columnist that I normally agree with) said about the bailout back in November:

This (the auto bailout) is a different sort of endeavor than the $750 billion bailout of Wall Street. That money was used to save the financial system itself. It was used to save the capital markets on which the process of creative destruction depends.

Granting immortality to Detroit’s Big Three does not enhance creative destruction. It retards it. It crosses a line, a bright line. It is not about saving a system; there will still be cars made and sold in America. It is about saving politically powerful corporations. A Detroit bailout would set a precedent for every single politically connected corporation in America. There already is a long line of lobbyists bidding for federal money. If Detroit gets money, then everyone would have a case. After all, are the employees of Circuit City or the newspaper industry inferior to the employees of Chrysler?

Brooks is think the danger here is that the government is going to try to save every failing company, thereby threatening capitalism itself. Give the money to these aging dinosuars and they will just misspend it and make the same mistakes over and over.

But is that what's going on here? Are liberals rushing in to end capitalism and create some new People's Republic?

No. Brooks and many others were looking at this from a philosophical standpoint and not a real time standpoint. They were talking about the vibrancy of the free market while at a time when the market is fragile and might not be able to mend so easily if one or more of the Big Three went down.

And that's been the problem here. I think conservatives have been more concerned about the letter of the law than its spirit. They have held fast to a rule and not noticed if the times warranted such close adherence.

In normal times, I think it would make sense to ignore the pleas of Detroit. In many ways, they got themselves into this mess. However, these are not normal times. The housing cum financial crisis has made this economy fragile. While I don't think we are rushing headlong into the Great Depression, Part II we are in a spot where doing the wrong thing could lead us down that road. Allowing the Big Three to fail would have created massive unemployment in states like Michigan, Ohio, Illinois, Indiana and Missouri. Those states would have to use already tapped resources to provide unemployment insurance. And it would have spread to suppliers as well. In some cases, that is already happening. A blogger at Autoblog sums up what is happening at a former workplace:

I've recently been in contact some former colleagues at TRW's headquarters complex in Livonia, MI. Since the start of 2008 there have apparently been five rounds of layoffs at the technical center. In the most recent round in mid-November, one former co-worker with 32 years of experience as a skilled technician was laid off as were numerous other engineers and technicians many with 25-30 years or more of experience.

Much of my former department has been let go, as the work they were doing has been consolidated at another facility. The most recent publicly available information about TRW indicated that the company had over 66,000 employees worldwide with 4,000 in the Detroit area, including 1,200 at the Livonia technical center. It's estimated that as many as one-third of the people in Livonia lost their jobs in the most recent round of layoffs. These are mostly college graduates with bachelors and masters degrees, and many of these same people are having a tough time finding jobs because every other company in the field is also letting people go.

These engineers are technicians are being fired because the vehicle programs they were involved in have been delayed or canceled outright. Lack of a paycheck means these people will be spending less money in the community in coming months, leading to cascading business failures and job losses. This is the real cost of the financial mess on Main St.

Any potential demise would also hurt suppliers, which would in turn, hurt the foreign automakers that have plants in the U.S. since they get their parts from the same suppliers.

If the government did nothing and the Big Three collasped, would we enter a depression? I don't know, I'm a pastor not an economist. But I do think that with the economy has fragile as it is and with rising unemployment, I wasn't interested in testing out that hypothesis.

In the end, I think conservatives did not do anyone a favor for not even trying to provide a solution and as the old saying goes, ideas have consequences. Don't be surprised if come 2010, the Democrats use this failure during the elections. The Dems and Unions will run commercials about how the GOP was willing to put this economy at risk and many people will remember. They will not care that these bloggers and politicians were sticking to principle, they will remember that the GOP tried to stick it to them.

The sad thing is that 30 years ago, it was the autoworkers that Ronald Reagan went after to win the Presidency. Back then, those autoworkers were disatisfed with the Democratic Party and started voting for the Republicans. It was in Macomb County a suburban county of Detroit where the term "Reagan Democrats" was coined. Three decades later, the GOP has basically told these people to drop dead and forced back into the arms of the Democrats. It's yet another sign of how tone deaf the GOP has become and so willing to write off total sectors of the American populace for a thin slice that they think will carry them to victory.

Maybe a "bailout" was a great idea, but the GOP wasn't that interested in presenting anything new. Creative destruction, as they say. Nevermind if this time the destruction was the Apocalyspe.

Again, I am not an expert, but I am the son of two autoworkers and have seen the hard times in my home state. In the past, I would have said this was the result of the economy and Michigan hasn't moved forward. And I still think that is true. The Big Three have been slow to change and again, if it were normal times, I would say they should go hang. But we live in risky times and the GOP failed to see that and was willing to gamble with the lives of tens of millions of people. I believe in the free market, but I wasn't willing to let such a massive calamity happen that could bring down the rest of the economy. I'm a conservative, but I am also loyal to my parents.

I don't know what the answer is for conservatives here. But before we start throwing out that "elitist" charge at liberals, we might want to check ourselves.

Auto Bailout Fails in Senate

The Detroit News is reporting that the bailout deal has failed in the Senate.

In the weeks since this has become an issue, I've gone from saying let them hang, to doing what we can to help the Big Three, to thinking that maybe bankruptcy wouldn't be such a bad idea. In normal times, I would say, no to any government help, but then these aren't normal times.

Maybe my fellow conservatives are correct that giving the big three money is just throwing good money after bad. But I keep having this bad feeling that we might be ideologically correct at the wrong time. I keep wondering if one of the automakers goes under, what it will do to an already sinking economy.

But tonight I keep thinking about my native Michigan and all those families wondering what will happen next.

Thoughts from the Son of An Autoworker

I was born and raised in Flint, Michigan, a company town. Both my parents worked for General Motors. My dad came from his native Louisiana to work at Buick from 1953 to 1992. My mother got on a plane in Puerto Rico and headed to Michgan in 1963. After stints as a teacher and a nurse’s aide, she ended up at AC Spark Plug in 1967. With the exception of some stints in the 80s due to health issues, she worked from ‘67 until 1992.

I came along in 1969, a little over a year after they married. I can remember growing up around cars. I remember driving in Dad’s 1965 Buick Wildcat. It was a sweet car.

In the late 70s, times in Michigan started to get bad. Gas prices went up and the Big Three got flat footed in responding. They ended up making cars that no one wanted. People stopped buying American cars and went to the more efficient cars from Japan: the Toyotas and Hondas.
Meanwhile, things in Flint changed. Plants closed, and people were laid off. Businesses started to leave. Unemployment rose and rose and for a time in the early 80s, Flint had the nation’s highest unemployment rate. The town went from a clean city to an economic basket case.
I left Michigan for good in 1992. Flint was still losing plants and would continue to see GM shed more and more jobs.

I still come back to Michigan to visit my parents. Flint is a shadow of its former self. The population was around 200,000 when I was born; now it is around 100, 000.
These days, I worry about the state of GM. My reasons are personal: my parents. Both of them are now GM retirees in their 70s. I wonder what would happen should GM go under. I know that their pensions are insured by the government, but will they get their full pension or some pittance?

If there is anyone that would like to say “good riddance” to the Big Three, it should be me. For decades, the companies made cars no one wanted, spent time making gas-guzzling SUVs and basically drove away a generation of car buyers. That includes myself, who is the proud owner of Toyota Prius.

I would also say (out of earshot of my parents) that the United Auto Workers forced the automakers into contracts that were not sustainable.

I agree that the Big Three got themselves into this hole. But I have to say that in the end, I think the feds should consider giving them some kind of financial help, with strings attached, of course.
I know, some would say that the free market means that you are on your own. Some would also say that we can’t “nationalize” every industry. After all, it’s only throwing good money after bad.
Most would say that if the Big Three go, life will go on. This is what Megan McArdle has to say about autoworkers:

GM can’t be saved. It needs to go into bankruptcy, which is the only possible
way I can see to adjust its legacy labor problems, and possibly provide
sufficient shock to the corporate culture to allow the company to make a
competent car. Even that may not work. And it’s going to involve a whole bunch
of pain for everyone.

But unless we’re willing to essentially nationalize three auto companies,
that pain is going to come, sooner or later. And if we want to keep auto workers
from feeling pain, then we should just up and give them money. There’s no reason
to waste steel on a lot of crappy cars.

Forgive me, but I want to know what planet she is on. Autoworkers have been feeling pain for a long time. Look at the factories that sit empty or the ones that have been razed. Think about all the jobs lost. There are people that have been feeling pain for 30 years.

A recent NPR interview thinks that if one or more of the Big Three close, the costs would be big. And let’s not forget that if the companies close, so do the suppliers and every business that depends on autoworkers. States like Michigan would become economic disasters.

All this has been met with some annoyance. Again, I understand. But I also know what could happen in states that have a heavy American auto presence. The results would not be pretty.
I do wonder if those who don’t seem to care about this, do so because they have never lived in working class towns like Flint. It’s easy for someone in California to say to Ford to “go hang,” when your job isn’t going to be affected. But for someone who has seen the downturn up close, this isn’t something to take lightly.

So, even though it goes against my conservative fiber, I hope that President-elect Obama does do something to help. Hold them to promises, make them pay back loans, whatever. But don’t tell us that this pain is good for us. Because I sure as hell know it isn’t.