Saturday, August 19, 2006

detroit and others

Occasionally I agree with a Republican. Today I agree with Senator Lamar Alexander, who sees no choice for the US auto industry but to learn to compete with Japanese, German, Korean, and other foreign manufacturers. Lessening the pressure on foreign manufacturers, as the Post article points out, foreign car makers employ over 100,000 people in the US. And much of Detroit's problems aren't just with retiree benefits and medical costs, which are considerable -- and costly to the US. Toyota recently picked a Canadian site over Mississippi because health costs were lower and employees better-educated. Detroit is also facing the results of bad choices, including the Big Three's over-reliance on big SUVs and trucks.

Now, that's not to say I agree with letting wages and benefits continue to erode relative to the take-home pay of senior executives. But the growing wealth gap in the US isn't primarily about globalization. It's about political choices. Gaps between the richest and the rest of us dropped during the FDR and Truman and Eisenhower and Kennedy-Johnson and Nixon-Ford and Carter administrations, soared under Reagan, Bush I, stayed flat under Clinton, and have taken off again under the current de facto Bush. Coincidence? Nope. Policy.

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