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June 6, 2009

Guest Commentary: What's good for GM is now good for China

By Irving Wesley Hall

I remember the hullaballoo in January 1953 when GM CEO Charles Wilson, President Eisenhower's nominee for Secretary of Defense, testified, "For years I thought that what was good for our country was good for General Motors, and vice versa."

GM was the world's largest car manufacturer. The United States was the world's unchallenged industrial powerhouse.

For Americans, Honda, Toyota and Suburu might as well have been exotic Oriental dishes.

Today, General Motors is undergoing the second-largest industrial bankruptcy in history. It's closing fourteen more assembly plants and slashing 21,000 family-supporting jobs. GM will have fewer than 40,000 workers building cars in the United States, one-tenth of its work force of 400,000 in the 1970s.

Fears are spreading throughout GM's vast chain of suppliers and dealers that this bankruptcy will lead to cascading business failures. Large plants that stamp metal parts or build engines will be shuttered, including one in Massena.

GM will reduce 6,000 dealerships to 3,600. Dealership closings will cut an additional 100,000 jobs. These layoffs come after a nationwide loss of 741,000 jobs in January alone _ the most since 1949.

GM will no longer make Saturn, Pontiac, and Saab and will shift production of its remaining lines to new facilities in foreign countries. According to Ralph Nader, shipping production to China has long been GM's strategy.

Despite GM's bankruptcy, the Obama administration government-orchestrated shrinkage has already cost taxpayers $50 billion. The Wall Street Journal estimates "the rescue of the car industry could cost taxpayers close to $100 billion."

Nader asks: "Why are we using tax dollars to facilitate the export of whole plants and jobs to communist dictatorships in China and to oligarchic, authoritarian regimes in Mexico who have turned workers into serfs and denied them independent unions and other rights that workers should have in any country that we have trade dealings with?"

Today, what's good for General Motors is good only for Communist China and transnational corporations that benefit from cheap labor.

GM's bankruptcy and Obama's shortsighted response exemplifies the self-destruction of our country's economy over my lifetime. Before I retired as a teacher, I warned my students about several dangerous economic trends that have accelerated over the last two decades.

The United States has degenerated from a world power based on industrial production to an overextended military empire based on debt and consumption.

Our citizens have gone from well-paid industrial workers with comfortable savings accounts to cash-starved consumers with staggering credit card payments.

According to the Federal Reserve Bank, we Americans owe $971 billion in credit card debt. That's $3,184 per person or $8,299 per household. Consumer loans for automobile, furniture and consumer electronics total $1.617 trillion _ $5,298 per person or $13,821 per household, per a November 2007 report.

As bottom-line obsessed CEOs moved good jobs overseas, factory workers became Wal-Mart clerks selling Chinese products. For decades, real wages have stagnated as prices continued to rise.

Fifty years ago a man was able to support a family on a union member's wages while his wife stayed at home to care for the children. Now almost half of private-sector workers subsist on the minimum wage.

Both mothers and fathers have to work to feed their families _ sometimes two jobs or more! According to one estimate, only three out of 10 children have stay-at-home moms! Who has time to read, to think, to become an informed citizen or understand what's happening to us?

Is there any wonder that so many of us are deeply in debt? How can we afford new cars or find time to take political action for our common good?

Corporations that outsource jobs and use off-shore tax havens have prospered, while working folks have watched the American dream turn into a nightmare.

Our savings evaporated with the 401(k) speculators' scam and now our last nest egg _ the value of our homes _ is disappearing because of the mortgage fraudsters. In the last year, U.S. households' net worth has declined by $13 trillion.

In just fifty years _ under both Democratic and Republican administrations _ the United States has gone from the world's major creditor to the greatest debtor. Taxpayers spend $2 billion a day just to service the national debt. Over $1 trillion of that is held by Japanese and Chinese bankers.

Obama's administration has pushed the nation's marketable debt to $6.36 trillion.

Who profits from this earth-shaking debt? Financiers and the transnational corporations driven by short-sighted greed.

Financial capital has squeezed out industrial capital and largely controls both the executive and legislative branches in Washington.

I recall the outcry when George W. Bush raised $25 million for his 2000 presidential campaign from financiers, war makers, and big oil. In 2008, Barack Obama raised $150 million from the same contributors. He who pays the piper calls the tune.

How else can we explain Obama's choice of Wall Street executives to deal with the economic crisis that they created? Why was AIG too big to fail but General Motors allowed to collapse? Obama's Wall Street approach to the GM bailout typifies his bankers' priorities.

GM's restructuring is being directed by financiers who've never seen an assembly line and are looking for a fast return rather than a long-range solution to America's desperate energy and transportation crisis.

If Obama really believed in the change he promised, he'd immediately initiate a national dialog on re-industrializing America. He'd ship the bankers to China and tax their ill-gotten gains to fund committees of workers, engineers and visionaries in each factory that GM plans to close.

Locally and nationally, these folks can dramatically increase jobs through conversion to production of mass transit vehicles, hybrid or all-electric cars, and alternative energy devices such as windmills and solar panels. Why wait for Obama?

Before it is too late, GM and Chrysler's eager and skilled work force must gear up for this nation-saving mission.

Not enough time? In Flint in 1942, GM halted all car production and immediately converted the assembly lines to build planes, tanks and machine guns for the war effort. Re-industrialization is change we can believe in _ but we will have to make it ourselves.

___

Hall has taught English, political science, philosophy, economics and history at a number of California and New York colleges, most recently at the State University College at Morrisville (Norwich campus). He is the author of the political satire "The Einstein Sisters Bag the Flying the Flying Monkeys" and executive director of the documentary "Onward, Christian Zionists." Visit www.notinkansas.us for details. This article was partly inspired by his Memorial Day address to the Norwich Tea Party chapter.