The bankruptcy of Chrysler crystallized a pretty straightforward choice about which side you are on in our society: do you care about what happens to workers and their communities or are you more interested in making a few more dollars? The Administration made its choice. A few hedge funds made their choice and, along with some wing-nuts (more on them in a moment), decided that personal enrichment trumped the interests of the larger community. Let's look at this morality lesson.
Let's start by acknowledging that the set of options before the country were not great. The economic collapse devastated auto sales--not just in the U.S. but around the globe--pushing already weakened companies closer to the brink. The U.S.-anchored companies (notice I deliberately do not refer to these companies as "American" companies because their management and boards of directors long ago embraced a global identity) were burning through cash at a rapid rate, requiring taxpayer loans just to survive.
So, a deal was structured in which everyone had to give. Let's be clear what the important societal goal was here: making sure that tens of thousands of people continued to have jobs and that tens of thousands of older Americas, retired workers who put in 30 or 40 years in back-breaking jobs, could would continue to get a modest pension and health care.
Trying to achieve that goal is the essence of patriotism to me. A patriot, according to Webster's, is someone "devoted to the welfare of one's country". It's not empty flag-waving and pimping for some empty slogan called the "free market". It's making sure real people--the people in our communities--can live a decent life.
On one side of the Chrysler saga, we had the president, Chrysler management, the United Auto Workers and, to their credit, the big banks representing 70 percent of the company's debt. There was a deal made where everyone had to take a hit. These are the patriots of the country.
The UAW agreed to more concessions. "More" because the union's members had already agreed to concessions in 2005, 2007, and 2008. To be part of this attempted rescue of Chrysler, retired workers--again, people who had worked for decades expecting a modest level of security--had to agree to cuts in health care coverage that will mean that they will pay, on a fixed income, more out of their pockets.
On the other side, are the traitors. These are the hedge fund guys--by the way, the very class of people who were central players in the destruction of trillions of dollars in wealth. They felt they were not going to get enough money out of the deal so the deal went south and now we are in bankruptcy court.
Understand, that for the hedge fund guys, the jobs of the auto workers are irrelevant. In fact, their biggest hope is to see Chrysler liquidated so, like vultures, they can descend on the carcass of the company, pick apart its assets and sell them, piece-by-piece. In their world, workers, who actually make the company run, are not seen as assets but liabilities standing in the way of a profit. The president rightly denounced the hedge fund hold-outs as "speculators".
Yesterday, I debated Larry Kudlow and Stephen Moore of The Wall Street Journal. The unhinged nature of their response to the attempt to save Chrysler is a testament to both blind ideology and an unwillingness to deal with the reality. Check this out:
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What is striking in this debate was the extent to which anti-union animus and knee-jerk love of the so-called "free market" blind these folks to seeing both the problems and the solutions. I point I made briefly with Kudlow--how can you actually be heard in this goofy screaming match--is that the real problem facing the auto industry (not to mention other companies) is the burden of health care costs, which can only be dealt with if we adopt a single-payer health care system. Erin Burnett--who is usually not too kind to unions--acknowledged in an earlier debate I took part in yesterday that, yes, health care costs are a crucial issue (yes, they were really scraping to have me on twice in one day):
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So, to sum up, the Chrysler story is one that is testing our morality. The president, the union, the workers, and some banks have passed the test. The hedge fund speculators have not.