The Shock Doctrine, In Practice


Putting the brakes on the auto industry bailout package of $14 billion dollars (which was designed to last until March or April, when Chrysler and GM could come back with better, more formative ideas of future strategies) has absolutely nothing to do with pricipled ideals about capitalism and the free market for Senate Republicans. If that had been the case, the previous $700 billion financial market rescue would have been filibustered and held up infinitely — and Henry Paulson would not be moving the goal posts on how the money is supposed to be used every couple of weeks.

It has nothing to do with waiting for better strategies and plans from those companies, either. If it had been, they would have asked for a clearer explanation from Paulson, the Fed and banks on not hoarding the credit, as they are doing right now.

This is about busting the United Auto Workers union, pure and simple. It’s Naomi Klein’s Shock Doctrine on display: use an emergency situation to force radical, unrelated changes in policy that you had wanted all along.   Please note the plan of one Tennessee senator named Bob Corker yes, the same hick fuck who race-baited former Representative Harold Ford, Jr. in order to win his Senate seat — that the G.O.P. proceeded to line itself up behind:

Under his plan, the automakers would have been required by March 31 to slash their debt obligations by two-thirds — an enormous sum given that G.M. alone has more than $60 billion in outstanding debt.

The automakers would also have been required to cut wages and benefits to match the average hourly wage and benefits of Nissan, Toyota and Honda employees in the United States.

It was over this proposal that the talks ultimately deadlocked with Republicans demanding that the automakers meet that goal by a certain date in 2009 and Democrats and the union urging a deadline in 2011 when the U.A.W. contract expires.

G.M. and Chrysler had already agreed to carry out sweeping reorganization plans in exchange for the help.

The negotiations over Mr. Corker’s proposals broke up about 8 p.m. and Mr. Corker left to meet with Republican senators to brief them on the developments. The Republicans emerged from their meeting an hour later having decided they would not agree to a deal. Several of them blamed the autoworkers union.

“It sounds like the U.A.W. blew it up,” said Senator David Vitter, Republican of Louisiana.

Senator Richard C. Shelby of Alabama, the senior Republican on the banking committee and a leading critic of the auto bailout proposal, said: “We’re hoping that the Democrats will continue to negotiate but I think we have reached a point that labor has got to give. If they want a bill they can get one.”

Both Senators Corker and Shelby have plants from foreign automakers in their home states, ones that are likely hoping to remove the UAW’s clout so it does not unionize its plants’ work force. They are not reliable critics. (I own a Honda. I love it. This isn’t an anti-foreign automaker post, for reasons you’ll see in a bit. As for Senator Vitter, we would rather not take advice on economics from him; he used to spend his money on some rather, um, interesting entertainment.)

It is amusing how this bill now is stuck in neutral because suddenly, labor is not making enough concessions, and thus its gains won through bargaining must be thrown out the window.  (Maybe lawmakers ought to consider that the heads of American auto companies are awful negotiators.)  The whole reason this bailout is even being considered is because there is a massive, unionized work force that is the backbone of these industries, and its fall would be absolutely devastating.

This doesn’t matter to Corker, Shelby, and now the GOP’s Senate Caucus. In order to serve the greater good of socializing the failure and privatizing the profits for crony capitalism (which has been the country’s guiding economic principle for the past 2-3 decades), the workers will just have to suffer and take a major pay cut in a bad economy where every dollar counts.

Fighting the Michigan congressional delegation on tougher gas mileage regulation and tougher emission standards didn’t occur to them, just as it did not occur to the heads of the Big 3 to get out in front of making fuel-efficient cars instead of hoping the SUV gravy train would last forever.  Now, it’s not about reducing the executives’ pay, it’s the workers who must give in.

The urge to remake industries to their failed policy is what greases the wheels of men like Corker and Shelby.

One Response

  1. You’re absolutely right.

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