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View Diary: The $70-Per-Hour Lie (353 comments)

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  •  The other problem (22+ / 0-)

    Apocryphal tale that exists in various forms.  Some Ford guy (Henry, Henry Jr, plant manager in Cleveland) was bragging up the planned new robotic automation of an auto plant.  To which Walter Reuther (or some other union official) eventually interrupted to say some version of:  "And how many cars are your robots going to buy?"

    Or some such.  If the workers aren't paid enough to buy the products they make, the whole system is pretty much guaranteed to collapse.

    "The river always wins" - Mark Twain

    by Land of Enchantment on Fri Nov 21, 2008 at 06:55:39 PM PST

    [ Parent ]

    •  You're right but some of the perks that UAW (1+ / 0-)
      Recommended by:
      wishbone

      employees have been getting--like guaranteed pensions and healthcare coverage in retirement--are probably going to have to either be reduced or eliminated. These retirees will probably have to pay for more of their healthcare.

      This is just unsustainable. I think that the UAW needs to adjust to that reality. They aren't by far the ones "responsible" for GM going under. GM's corporate strategy is responsible because they failed to effectively design cars that people wanted.

        •  My Analogy (2+ / 0-)
          Recommended by:
          gdunn, not a cent

          The Club of Rome developed a computer model a while back to analyze the stability of nations in the notoriously tumultuous South America of the '70s and '80s - they found that the variable that possessed the highest positive correlation with instability was the level to which ownership of the land was concentrated in the hands of a small group of elites.

          In South America, ownership of land equates to the ability to make a decent living.

          In America, a secure job with good benefits equates to the ability to make a decent living.

          Conclusion: Depriving a nation's people from the ability to make a decent living, sentences it to extinction.

          •  addendum (3+ / 0-)

            Supply-Side Economics has duped itself into believing that it is the best school of thought to maximize the wealth creation of a nation's economy.

            What it doesn't take into account is that nation's societal stability.

            You could say Republicans are tunnel-visioned [misguided] economists.

            Democrats are big-picture sociologists who also 'happen' [can you sense the sarcasm] to run the economy better than the 'economist' party does.

            •  "Creating" wealth? (4+ / 0-)

              Unfortunately, we're just now finding out that much of the wealth supposedly "created" by the glorious unregulated Free Market was basically imaginary "wealth" that Wall Street types pulled out of their asses by inventing and manipulating exotic financial derivatives with no connection to the real world.

              •  We need to create Value (1+ / 0-)
                Recommended by:
                canyonrat

                Industrial production does that

                Labor jobs do that

                CEOs need the pay cut across the board.

                -G

                •  FDR had some great ideas (3+ / 0-)
                  Recommended by:
                  canyonrat, gdunn, firemage

                  Like the "maximum wage"

                  Back then, I think it was 15X the minimum wage.

                  I think there is a grain of intuitive truth in the fact that one person isn't capable of making 3000X more wealth than another person working the same hours per day.

                  •  For all his faults FDR was great (0+ / 0-)

                    i should study him more.

                    -Gabe

                    •  here are a few of FDR's faults ... (1+ / 0-)
                      Recommended by:
                      dansmith17
                      1. could not walk very well, but swam like a fish.
                      1. ugly wife that he cheated on, but Eleanor visited the war fronts on his behalf and after his death as our representativein the UN chaired and spurred on the UN committee that drafted the Universal Declaration of Human Rights -- an almost perfect start to the human rights movement. She was the liberal conscience of his Administration.
                      1. provoked Hitler into declaring war on us (if he hadn't done so, Hitler might have crushed the USSR and won the war.)
                      1. provoked Japan into attacking us, but was betrayed by Admirals Kimmel and Bloch and General Short who ignored the war warning.
                      1. did not understand economics, but in 1933 Keynes had not yet written the General Theory, and almost every other economist thought the government ought to let everything slide, increase taxes and cut spending. The crackpots Roosevelt listened to urged him to try something, anything, and he did, but the rich (who thought him a traitor to their class) refused to invest and recovery was slow and irregular.
                      1. he was rotten on minority rights. He depended on support of Southern white supremisists in Congress. He let a crazy, racist general expel and imprison the persons of Japanese ancestry on the West Coast,but he chose Harry S. Truman as VP who as President integrated the armed forces and forced the walk out by the Dixiecrats from the 1948 Democratic Convention which freed us from a curse.
                      1. he was silly enough to wage a war against a disease --infantie paralysis that struck many classrooms every summer. He created and financed the startup of the foundation that financed the basic research on virology and proteomics -- research that led to the Salk and Sabin and other vaccines that protect almost everyone in the world and to vaccines to prevent many other disease (e.g. mumps, measles, diphtheria, river fever, shingles,... and extend the life of victims of HIV/AIDS.
                •  Industrial production does that (creates value) (0+ / 0-)

                  Unless it builds Yugos.

              •  So true! (0+ / 0-)

                "Value" is a confidence game. Sincerity is the essence of selling bonds; learn to fake that, and you have it made.(Ivar Kruger).

          •  Club of Rome (0+ / 0-)
            1. Believe nothing you think a Club of Rome tells you, especially if it is a fraternity at the College of Cardinals.
            1. Believe nothing you think a computer model tells you. It is at best an abstraction. In retrospect it always turns out that the really important variables were omitted, wrongly estimated, or incorrectly measured. E.g. investor confidence,present value of future earnings of anything, any dependent variable, any exogenous variable, any predetermined variable, the true stochastic distribution, or the best time to break for a drink.
            1. Believe nothing a solitary economist tells you. Be very suspicious if two economists tell you the same thing, especially if they independently agree Any good economist can pick another economist's theory or model to pieces in 30 minutes. It takes a bad economist (e.g. a supply sider). or a believer in the neoclassical synthesis, or a marxist at least an hour" (Jimmy Carter) "If two economists were laid end-to-end they would not reach a conclusion, and it wouldn't be a bad idea." (Karl or Groucho Marx, I forget which, fellow with a mustache) "Two economists will always come up with two different recommendations, unless one of them is J.M.Keynes, who will come up with at least two conflicting theories by himself." (FDR) "Forecasting is inherently unreliable, especially if it concerns the future." (Yogi Berra)
      •  Charles Dickens (7+ / 0-)

        Here we come!  (Or are we already there?)

        "The river always wins" - Mark Twain

        by Land of Enchantment on Fri Nov 21, 2008 at 07:07:10 PM PST

        [ Parent ]

      •  Who the fuck else (10+ / 0-)

        is going to pay for health benefits?  If the most productive workers in the world can't produce enough to pay for health benefits, then who the hell can?

        Voting changes things. That's why they don't allow it.

        by happymisanthropy on Fri Nov 21, 2008 at 07:07:35 PM PST

        [ Parent ]

      •  Why? (2+ / 0-)
        Recommended by:
        Land of Enchantment, deedogg

        Shouldn't we first go to the stockholders who got the dividends and stock buybacks when the firm should have been funding the pension and health care benefits? Difficult yes, but reasonable given that the stockholders made a deal with their employees which you are prepared to give them a pass on. One way to retrieve the money is to kill all outstanding equity.

      •  Already have (8+ / 0-)

        There were major concessions in the 2007 contract negotiation.  New workers make about $12/hr and do not have the same benefits package...some would say no benefits package.  The UAW gave up a lot already, so they are supposed to give up even more to bring down costs?

        The only thing scarier than a McCain presidency is a Palin presidency.

        by Mote Dai on Fri Nov 21, 2008 at 07:45:03 PM PST

        [ Parent ]

      •  Who the Hell are you? (9+ / 0-)

        Why do you go around every diary and post comments that seem like they are from the opposite side of the aisle?

        What do you mean give up the "perks" of health care and retirement? Who the Hell is going to pay for the workers health care and retirement?

        Jesus H. Christ! I hate this bullshit.

        We are Democrats here. We want to raise people up, GET them health care and retirement benefits. NOT advocate them being stripped from people.

        Sheesh!

        McCain: US economic woes 'psychological'

        by DAVE DIAL on Fri Nov 21, 2008 at 08:02:01 PM PST

        [ Parent ]

      •  A contract is a contract (1+ / 0-)
        Recommended by:
        happymisanthropy

        Companies should make plans that involve supporting all the contracts they make.

        UAW and the Big 3 made agreements, both have to hold to them.

        Health costs need to be lowered, then you won't need to worry as much.

        -Gabe

        •  At the cost of the company going out of business? (0+ / 0-)

          I didn't have any part of the "deal" between management and the UAW, so I expect that my tax dollars won't be used to supplement their business... right... right...?

          Do you think that the car companies still need to maintain their agreements even when the companies are on the verge of bankruptcy? Or do you plan on putting me on the hook for supporting them? If so, maybe I'll just make a deal with my employer that they'll pay me $200/hour tomorrow; oh yeah, and you're responsible for paying for it.

          •  Extremely specious analogy, (0+ / 0-)

            a reductio ad absurdium not worthy of the seriousness of the topic.

            We should all be very suspicious whenever someone attacks the value of labor, or claims it would be "unreasonable" to hold industry to agreements with labor.

            When has labor ever made such a claim? Why is it always the cost of labor that is suddenly "unreasonable"? Why not the cost of materials, or - wait - management salaries? Even taxes, they bitch about them, but it is never the bete noir that is labor costs (maybe because they know govt will be complicit on their levying and collection anyway.)  

            Time for a change.

            The difference between ignorance and apathy? I don't know, and I don't care.

            by pjeans on Sat Nov 22, 2008 at 12:24:33 AM PST

            [ Parent ]

            •  Because cost of labor is main differential (1+ / 0-)
              Recommended by:
              Sparhawk

              between successful foreigners and bankrupt Big 3. I am not against unions, but asking tax paying Wal-Mart employees (1 million of them) to help bail out UAW employees takes some explanation. So, other than "Big 3 will take USA economy down with them", a good business plan and some sound reasoning are required for Congress to borrow from all taxpayers to fund a single segment (less than 50% capacity) of an industry.

              I voted with my feet. Good Bye and Good Luck America!!

              by shann on Sat Nov 22, 2008 at 01:50:39 AM PST

              [ Parent ]

              •  3 million wage earners, and 20 million more (1+ / 0-)
                Recommended by:
                gadrielle

                indirect wage earners out of work, won't shop at Walmart or anywhere else.  

                We really are all in this together.

                "Out of Many, One." This is the great promise of our nation.

                by Uncle Moji on Sat Nov 22, 2008 at 01:54:43 AM PST

                [ Parent ]

                •  The numbers get worse with each telling... (0+ / 0-)

                  but, I get the idea. Is it enough to extort Congress into a payoff to the auto industry? We will soon find out.

                  I voted with my feet. Good Bye and Good Luck America!!

                  by shann on Sat Nov 22, 2008 at 02:21:58 AM PST

                  [ Parent ]

                  •  The finance & credit bailout numbers (0+ / 0-)

                    are also getting worse with each telling, and the $700 billion will probably not be enough.  AIG has revised its figures upwards and will continue to revise upward as the market continues to crater.  

                    The truth is the AIG bailout is symptomatic of the problems with our economy and the lack of stewardship and leadership and oversight expressed by the executives of the industry (the people making the big bucks) and the Bush administration.  AIG has no idea how much money it needs.  They don't know because they insured loans made by banks (an absolutely insane idea since the business of banks is to secure the loans they make) and more and more of those insured loans are going into default with each passing day.  Yet we, the US government, have decided that to protect banks from collapsing, we must bail them out with funds that have even less scrutiny or strings that the request from the Big 3.

                    Believe me, I don't trust the automakers any more than AIG, and I hope Congress or a new Treasury Secretary can restructure the way money is being doled out to the financial markets, but I do believe banks and industry that contains 10% of the US workforce are too big to fail.  What is shocking to me is that both the finance and auto industry CEOs seem confused by the idea that they would be required to produce a credible business plan in exchange for a loan.  Golly, if you went to a bank and asked for a loan for a failing company, you couldn't show up in a limo or come from a $400K business "retreat" and expect to be greeted with open arms.    

                    "Out of Many, One." This is the great promise of our nation.

                    by Uncle Moji on Sat Nov 22, 2008 at 09:56:53 AM PST

                    [ Parent ]

              •  But Wal-Mart (1+ / 0-)
                Recommended by:
                mayim

                Screws their employees by not allowing them to work enough hours to get company health care.  And, they inform their employees to apply for state health care benefits.

                So, is it OK for state governments to subsidize Wal-Mart and it is not OK for the Big 3 to ask the Federal government for a loan?

                Not sensical.

                •  True, Walmart is not fair to their employees.... (1+ / 0-)
                  Recommended by:
                  Sparhawk

                  But Walmart employees are tax payers and their increased debt or taxes (no other option) will go to the UAW employees. Yes, some people see this as fair.

                  I voted with my feet. Good Bye and Good Luck America!!

                  by shann on Sat Nov 22, 2008 at 05:07:42 AM PST

                  [ Parent ]

              •  major cause of Big3 distress (0+ / 0-)

                Actually, Germans and Japanese pay as well as US at home. The real burden of the Big 3 is the cost of medical insurance and pensions (including retirees) which they have to pay while most of the costs are borne by society as a whole everywhere else. Also everyone else gets VAT refuded on exports, while imports all have to pay the tax. This constitutes a huge tariff for us and a huge export subsidy for every where else. Wage differences among rich countries hardly matter. Of course, in time, China will eat everybody's lunch and he will have to pay for thood.    

              •  who pays for bailouts? (0+ / 0-)

                Don't you realize that taxpayers don't for deficit spending by Congress or money creation by the Fed? Ever. We haven't paid off the national debt since Andrew Jackson. Hamilton told us a national debt was a blessing. Exactly right, Jackson left office after destroying the Bank of the United States and restoring sound currency with the sub-treasury system and the specie  circular (everything had to be paid for in in silver coins (overpriced gold disappeared, be too valuable to spend until 1849) -- none of those damned banknotes except the state wildcat bank notes which one had to threaten the seller with violence to make him accept - or interest bearing notes of hand from trustworthy citizens) -, paying off the debt, and balancing the budget and in 1837 the nation plunged into a horrible panic and depression caused by hard money. Today Treasury bills pay little interest (the discount rate is 1 percent and banks can borrow as much as they want from the Fed. But they just buy Treasuries, they are to afraid to lend money or T-bills even to other banks. The Treasury is issuing piles of T-bills, and the money markets of the world say "More! More! For God's sake More! Thank God we are so broke, or their would be any securities that anyone would buy, and the price is right for us -- much cheaper to carry a debt of a Trillion at 1.5% intewrest than 500 billion at 6%. When the U.S. with its wonderful credit finally guarantees all bank deposits and all collateral backed bonds, and every corporation's commercial paper, and securitized credit card debt ... the mind boggles! Value is in the mind of the beholder, and Barack can rush a few more inaugural balls into production (why should they they both be on the same night?) The only limit on the wealth of tomorrow is our lack of imagination and greed today. Why shouldn't everyone own a stunning portrait of Obama facing right and left, and center layered in pure 24k gold at $19.95 (plus shipping and handling (with white cotton gloves!) made by the real Mint. (Because of the extraordinary demand there may be a slighgt delay in delivery by the USPS (Correction: there will be a considerable delay). All will be well in the Spring.

          •  You can pay for it upfront and get some control (1+ / 0-)
            Recommended by:
            not a cent

            over how the industry proceeds or you can pay for it after everything collapses.  We taxpayers are on the hook, one way or another, and I'd rather be on the leading edge of this with a loan with strings, than on the trailing edge paying for unemployment, welfare, emergency services, food stamps, social services, crime, homelessness...

            Don't kid yourself, if the automakers go belly up, it's not just the automakers and the UAW who lose, we all lose.  There are 3 million jobs in the auto industry (manufacturing, assembly, parts, etc) there are an additional 20 million jobs that are directly impacted by those 3 million wage earners.  There are 5 million people currently unemployed, how much more can our economy take?

            I believe there is a way to restructure the industry and the contracts that protect both. I am not sure why folks assume that unions are not aware that without a viable industry, they are all out of work.  This is an underlying principle of all union negotiations, if the business goes under, there are no jobs.  Unfortunately Big 3 management has been the party that failed to live up to its part to keep the industry viable, and now they blame the unions.  That being said, all parties, including investors, will have to be part of a solution that will involve shared sacrifice.  Management has fired the first volley however, with the lie about the $73 dollar wage rate, and that is not a good start toward shared sacrifice.

            "Out of Many, One." This is the great promise of our nation.

            by Uncle Moji on Sat Nov 22, 2008 at 01:10:32 AM PST

            [ Parent ]

        •  tell that to the bankrupcy judge (0+ / 0-)

          contracts of a bankrupt corporation can be canceled or modified by the bankruptsy judge (subject the the approval of his Federal District Judge. But did not the Constitution say something about impairment of the obligation of contract  -- my union won a case against the governor who tried to ignore our contract with the state, but we weren't bankrupt. Wonder why Bildisco didn't win its case against Bildisco. Judge probably got confused.  

      •  You are just wrong . . (1+ / 0-)
        Recommended by:
        No Preference

        Why should any of us be "adjusting" while CEOs and even middle managers are making the equivalent of 500 employees, each? People like you are either rightwing trolls or just plain blind to reality.

        Why shouldn't all workers deserve a decent retirement and good healthcare, especially those who spent 30 years on an assembly line? What are you thinking?

        Obama '08 "Enough. Enough triangulation, calculation and equivocation. Enough clever straddling, enough not offending anyone." Molly Ivins

        by gadrielle on Sat Nov 22, 2008 at 01:46:52 AM PST

        [ Parent ]

      •  However you do the math.. (0+ / 0-)

        the cost of retiree benefits are real and are part of the cost of production for each car. I would like to see the cost of top management's salary and perks figured up on a per car basis.

    •  Not really Apocryphal (1+ / 0-)
      Recommended by:
      dansmith17

      My "Henry Ford and His Time" Professor told us about that one, and it was Henry Ford II. (said prof is also at the Village)

      Well known story around Detroit.

      -G

      •  I tried to source it recently (1+ / 0-)
        Recommended by:
        firemage

        Found a variety of versions of it, and it is oft repeated.  But no real hard source.  If it didn't happen it could/should have, so it might as well be true.  But I haven't been able to find exactly what happened.  Even as to whether it happened in Michigan or in Cleveland (etc)

        "The river always wins" - Mark Twain

        by Land of Enchantment on Fri Nov 21, 2008 at 08:18:45 PM PST

        [ Parent ]

    •  Good sound bite, but let's think (0+ / 0-)

      How many UAW employees are there in the USA, about 350,000? How many vehicles do the Big 3 manufacture per year, about 10,000,000? How often do UAW employees buy new cars, once every three years? Now, we have 3 x 10,000,000 / 350,000 = trivial percentage of Big 3 cars bought by UAW employees.

      Any industry based on its employees buying other than a trivial percentage of its output is doomed to failure. Think "Perpetual Motion Machine", sounds good but never works.

      I voted with my feet. Good Bye and Good Luck America!!

      by shann on Sat Nov 22, 2008 at 01:44:42 AM PST

      [ Parent ]

      •  You don't get it (0+ / 0-)

        The UAW used to set the standard for wages and especially benefits for all US workers.  Before the UAW it was quite rare for union members to get health insurance benefits.  The argument is that unless average workers, not just auto workers, can make a decent living, the nation will not prosper.  

        It's an excellent point. Democrats should be making that point with more fervor. And, more importantly, Democrats should be changing policies in order to redress the massive imbalance of wealth that has developed over the past 30 years.

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