Save the people, not the corporations

There’s a lot to chew on in the discussion over at the New York Times “Does the U.S. need an auto industry?

I was struck by a couple of passages.

This from Roger Simmermaker, a union official:

We need a U.S. auto industry because American companies employ more American workers; support more retirees, their families and dependents; pay more taxes to the U.S. Treasury; have a much higher domestic-parts content in their vehicles, and operate far more factories in America than foreign-owned companies.

If the Big Three fail, the American taxpayer will be paying the pension and health care costs for the affected workers and retirees.

And this from economist Robert Reich:

The United States needs an auto industry because automobile jobs are good ones. They pay higher than average and provide good benefits. But that doesn’t necessarily mean we need General Motors, Ford and Chrysler. The American auto industry is not the Big Three. It’s Americans who make automobiles.

Foreign-owned automakers, producing cars here in the United States, now employ — directly or indirectly — hundreds of thousands of Americans. And at the rate the Big Three are shrinking, even as they’re bailed out, foreign automakers may soon employ more Americans than the Big Three do.

I think that both of them make the point that we need strong and vital industries here in the U.S. But I tend to side with Reich.

I’m not sure it makes sense to discriminate in a company’s favor simply because it is headquartered in the U.S. Think of this from the perspective of the U.S. automakers. They desperately want to sell their cars overseas. General Motors has focused on building its presence in China because of the possibilities of that market. If we’re going to insist that we simply “Buy American,” then other countries have the exact same right, to the detriment of American companies doing business overseas.

At the same time, though, we need to do everything possible to guarantee to the people of America a decent living and a decent shot at life. In economics, there can be win-win scenarios. But there are also win-loss scenarios. And it’s absolutely the case that lower-income earners have gotten the shaft out of the way globalization has been designed so far.

So what we need is a redefinition of what it means to be a U.S. economic citizen. And I don’t think our identity as economic citizens needs to be tied to a specific industry, or even a specific firm, like GM.

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