Why The Double Standard On Detroit?

Why The Double Standard On Detroit? Bill Press 11/21/2008 No wonder people don't trust politicians. Americans just voted overwhelmingly to steer this country in a new direction, yet Congress has ignored the pleas of Barack Obama and voted instead to continue the disastrous economic policies of George W. Bush by letting the American auto industry collapse.In the acrimonious debate over an emergency loan to Detroit, we saw some of the worst examples of political preening, pretending and pontificating ever. And not just by Republicans.Suddenly, before approving any financial help to automakers, members of Congress demanded answers from them that they never demanded from Wall Street. Everything they wanted to know was reasonable: What kind of changes are they going to make in their day-to-day operations? What structural changes have they agreed to? What limits are they going to put on executive salaries? What guarantees exist that we'll get our money back?Again, those are all good questions, and questions Congress should ask. But Congress members were hypocrites in demanding answers to those questions from Detroit automakers when they had so recently approved a $700 billion bailout of Wall Street banks and financial institutions with nary a peep: no oversight, no accountability, no conditions, no restrictions.Have Ford, Chrysler and General Motors made mistakes? Absolutely. For years, they stubbornly ignored all the signs and all the warnings that their business plan was headed for disaster. They fought congressional pressure to raise make more fuel-efficient cars. They dragged their feet on research into alternative fuels or electric cars. Instead, they kept turning out bigger and bigger gas guzzlers. Now the turkeys have come home to roost. Detroit automakers are stuck with outmoded plants and a huge inventory of cars nobody wants to buy. And they're still years from producing anything close to Toyota's hugely popular Prius.Should Ford, Chrysler and General Motors be forced to change their ways? Absolutely. Indeed, this is the chance for Congress to force automakers to make the structural changes they have so long resisted: retooling plants to produce smaller, greener cars; dumping SUVs and Hummers; speeding up production of electric, photovoltaic or hydrogen non-fossil-fuel vehicles; and placing limits on executive compensation. Those are fair demands to make of Detroit in exchange for a federal bailout.There's nothing wrong with putting strings on federal dollars. But here's my question: Why the huge double standard? Wall Street firms, remember, also screwed up. Indeed, they're the ones that drove us into the ditch in the first place. So why should they get all the dollars they want with no questions asked and no strings attached, yet Detroit be forced to jump through so many congressional hoops? Or why, as decided by George Bush and Hank Paulson -- and endorsed by Congress -- should banks and financial institutions get the entire $700 billion, while automakers most likely get not a penny of federal assistance?For Republicans, we know the answer: because Wall Street is non-union, and Detroit is all-union. Because Wall Street is white-collar and Detroit is blue-collar. Because Wall Street is upper-class and Detroit is middle-class. And Republicans would rather swallow glass than help a middle-class, blue-collar union member.But what's wrong with Democrats, who got re-elected with the help of labor unions and are now gleefully stabbing them in the back? Do they really want to make their first post-Obama-election move the death of the American auto industry? Apparently so. Massachusetts Democrat Michael Capuano set the tone by telling leaders of the Big Three: "Damn it, I don't want to give you this money and have it stuffed back in my face."Instead, Capuano and fellow self-righteous Democrats decided they'd rather help George W. Bush kill 3 to 5 million more jobs, cause 775,000 retirees to lose their pensions, and force 2 million workers to lose their health benefits. You think the economy's bad now? Imagine how much worse it will be when U.S. automakers go belly up, wiping out 20 percent of all retail sales in America, eliminating one out of 10 American jobs and destroying what little is left of America's manufacturing sector.This is the time to change Detroit, not to kill it. If Congress can suddenly find $700 billion to bail out the banks, certainly it can find $25 billion as an emergency loan -- not bailout, but loan -- to help the auto industry retool and regroup. Letting Detroit go bankrupt is a risk we simply can't afford.