26 Dec Auto industry bailout protects the mediocre
It’s funny and sad how the government did nothing to protect cutting-edge jobs in IT and telecom, but now elects to protect mediocre, Industrial Age automobile jobs that aren’t even producing world-class products.
The concern of losing an industrial base of one million jobs was a recent top concern of Congress. Some automobile bailout proponents claimed it would be cataclysmic to let all these people lose their jobs and the economic impact in the U.S. couldn’t be fathomed by anyone. How do you fathom it?
There’s no longer anything to conceptualize about this type of catastrophe. It has already happened. We are already past the point of seeing what losing one million good-paying jobs does to the American economy. Ask the highly skilled people who were in the IT and telecom industries that have had to take jobs paying a half to a third of what they were making.
The recent job erosion in these industries has cost individual families their lifestyles as well as their houses as the economy continues to sputter. The tsunami wave of lost IT and telecom jobs already has hit the economy and has affected other parts of it. There was no preventative action to try to avoid it.
New-car sales plummet to 20-year lows, houses get foreclosed at a skyrocketing rate, and all other credit issues like student loans, car loans, and credit card debt start to default at an increasing rate. Is this damage irreparable? Giving money out to banks doesn’t bring back those jobs.
Some argued the general economy couldn’t stand the type of economic downturn that a one million job loss would bring. In the last seven to eight years, though, the IT and telecom industries have lost at least that many jobs, if not more, due to outsourcing and labor dumping. Where was Congress then?
It’s true that the IT industry didn’t have any large union or trade association like the AMA or American Bar Association representing the software engineering people of this country. There was no major media spotlight on this problem, except for maybe Lou Dobbs.
You would have thought all the various engineering and programming guilds that so many paid dues to would have been heavily lobbying Congress in this time period. It’s too late for most people and membership in these “professional” organizations was a joke at a time when jobs were being lost.
Most media didn’t care because they didn’t understand software, network infrastructure, or high-tech equipment. If they proclaimed to be technically savvy at all, that meant they knew how to use an iPod or take pictures with their cell phone. Talking about Anna Nicole Smith, Britney Spears, Donald Trump, Paris Hilton, Dick Cheney, and others was so much easier.
What are the skills of the future?
This is a hard question that Congress, the media, and everyone else better start asking before we slip more into a second-rate economy. We lose cutting-edge jobs and future prominence in emerging technologies while we protect those in Industrial Age jobs. Is that a good strategy? We had world-class software skills that were second to none in this country.
Many in government positions failed to recognize this was a large “special interest group” that they should have been aware of and fiercely guarding their growth instead of listening to the corporate lobbyists telling them to open up the floodgates for cheap labor.
Most companies either outsourced their IT departments or replaced workers with cheaper visa workers. Though this may have made short-term sense to get executive bonuses for “cutting costs,” now we’re seeing the long-term effect of less spending, less new car buying, and defaulted mortgages and credit cards from those displaced from the IT and telecom industries.
Congress should have rushed to protect these jobs because they are the real jobs of the future and national security. Software skills, engineering skills, and complex project management skills will take a country further in this global economy. These were jobs that required complex skills, degrees, advanced degrees, and constant training rather than union membership.
As for the economic experts on TV and in other media, they can’t seem to connect the dots in our failing economy. It’s pretty simple. Car sales are at 20-year lows, mortgage foreclosures have skyrocketed, and credit card debts are soaring through the roof because many people have lost good jobs and salaries from the beginning of this decade and are now at the end of their monetary rope.
Few have spotlighted its cumulative effect until now. Most of the “expert economists” can’t really explain it because they can’t find a chart where the indicators match up to reality.
So this is Christmas?
Fred Thompson comments about the plan to spend our way out of this recession: “Ask not what your country can spend for you but what you can spend for your country.”
It’s not just Fred Thompson questioning the bailouts. Readers have been sending in their perspectives almost daily, too. They should be spotlighted as much as those “experts” on CNBC and other news channels. This is from one former student and longtime reader:
Goldman Sachs and others are apparently using bailout money (from U.S. taxpayers) to pay bonuses to “keep their talent.” I assume by talent they mean the same people who created the bogus securities that got us into this mess in the first place. If there was outrage regarding the automakers, where is the outrage here?
Banks apparently can’t report on where taxpayer bailout monies go and what part was spent where because it’s too hard to account for. This is from the same people with sophisticated accounting systems that can track any part of a loan they make.
U.S. immigration services spend $700 per person to fly illegals back to Central America and parts of Asia. They provide lunch on the planes, too. As one U.S. official said in an interview: “We want them to have a last good impression of the U.S.” Maybe if they had a last bad impression of us they’d be less eager to come back.
The utter amazement of this boggles the mind. These are the same people who are going to do a “better job” of running the automobile industry.
Money doesn’t bring change
Nothing is going to change once the automakers get their bailout of billions of dollars. Once they get it, will that change the buying habits of the populace? Is it going to change your buying habits? Do you really believe all these people in IT and telecom jobs who still aren’t making what they were earning back in 2000 and 2001 are going to rush out and buy a new Ford Expedition or Chevy Tahoe?
As another reader mentioned, we would be better off if everyone got a voucher for $15,000 to $20,000 to buy a new car.
That would at least move a lot of the inventory that’s sitting in various lots across the country and provide people with more fuel-efficient cars. On big-ticket items like cars, more people are looking at buying used cars and trucks and are reading the reviews more carefully before plunking down their money.
Buying habits change dramatically when people no longer have discretionary income. Do you really think someone is going to buy a car from the Big Three when they’re looking for something that has to last longer because they can’t afford to flip cars every three years?
Bailouts? Bah humbug.
Carlinism: Non-binding agreements like the automobile bailout have no teeth. Watch for the automobile deal to change completely as we move forward.
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This article previously appeared in MidwestBusiness.com, and was reprinted with its permission.
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