Giving the Devil His Due
Over at Takimag, Chronicles contributing editor Tom Piatak has a thought-provoking piece on the proposal to extend $25 to $50 billion in government-backed loans to the Big Three automakers. Among other points completely ignored by those who reflexively shout "Let them die!" whenever the American auto industry is mentioned are, as Tom notes, that as many as three million U.S. jobs may be lost; that the "tax loss from such a catastrophe would be over $150 billion over three years"; and that over 850,000 retirees receive pensions and health benefits from the Big Three--and taxpayers are on the hook for at least some of that cost through the Pension Benefit Guaranty Corporation.
In other words, the extension of $25 to $50 billion in loans may be the cheapest way out of this mess. Predictably, though, the same people who declared that we had to bail out Wall Street have drawn the line at Midwestern Main Streets.
Tom's thoughtful, reasoned, and fact-filled post drew a response from Richard Spencer, modestly titled "A Modest Proposal." Alas, there's nothing Swiftian about Richard's post. His modest proposal comes down to this: "Give every Big Three worker a direct cash handout of $100,000, and then cease all bailouts." He offers this alternative to loans to the Big Three because, as he writes, "arguments for saving the Big Three are arguments for saving jobs and helping out the good people who work for these massively unionized and horribly mismanaged companies." So why not just give the money to the workers and be done with it? (And save as much as $25 billion to boot!)
Since Richard doesn't really support this idea, it's perhaps a bit unfair to point out what his proposal reveals about his knowledge of the economic impact of the American automobile industry and of manufacturing generally, but I'll do it anyway. Like a good individualist, Richard instinctively assumes that all jobs and companies and industries are interchangeable. Individual wages and profits tell the entire economic story.
But they don't. This passage in Tom's post should have alerted Richard to that point: "The November 3 issue of Crain’s Cleveland Business reports that in greater Cleveland, where I live, 26,800 people work in the transportation equipment sector, and 100,000 jobs depend on that sector, directly or indirectly." Here in Rockford, as recently as three years ago, 23 percent of jobs were still in manufacturing, but another 23 percent of all jobs in the area depended on the manufacturing jobs.
That's why, even though Richard finds in Wikipedia that "there are around 240,000 people working in the American auto industry," Tom notes that "The Center for Automotive Research has estimated that a collapse of GM, Ford, and Chrysler would cost nearly three million jobs." Different types of occupations have different effects on the economy. Industrial manufacturing has a relatively high multiplier effect; internet punditry (to pick an example out of the air) does not.
None of this, of course, necessarily means that the proposed loans are a good idea. I, for one, would like to see a serious debate in Congress before such loans are approved--far more serious than the one held before the Wall Street bailout. (Financial services, by the way, also have a rather low multiplier effect on the economy.) And I'm heartened by the fact that some commenters at Takimag--especially Evan McLaren, "Eagle," John Médaille, Derek Leaberry, Sean Scallon, and Red Phillips (among others)--clearly understand the issues at hand. (Others, unfortunately, cannot avoid bleating out "one size fits all" libertarian talking points.)
Some of the commenters, including McLaren and Leaberry, note the irony that paleoconservatives now find themselves in the position of trying to save America from deindustrialization, even though industrialization had many very anticonservative effects. This was a subject of one of my Rockford Files columns over five years ago. In light of this debate, that column seems relevant again, and so I present it below.
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Giving the Devil His Due
Early in the morning factory whistle blows,
Man rises from bed and puts on his clothes,
Man takes his lunch, walks out in the morning light,
It’s the working, the working, just the working life . . .
One of the oddest ironies of our postindustrial age is that conservatives—true conservatives, not the various utopian progressivists who call themselves by that name—find themselves defending the remnants of the industrial system, the onset of which their intellectual and spiritual forebears viewed with dread. It is not that the crazy mystic William Blake was wrong when he wrote of the destruction of the English countryside by “these dark satanic mills”; still less Robert Burns, in his “Impromptu on Carron Iron Works”:
We cam na here to view your warks,
In hopes to be mair wise,
But only, lest we gang to hell,
It may be nae surprise . . .
Rather, conservatives, knowing that Jacobin optimism is more dangerous politically (and, possibly, even more destructive spiritually) than despair (you can, after all, repent of despair), see all too clearly that, whatever the damage wrought by industrialism, the emerging postindustrial “service” or “technology” economy bodes far worse for society.
Through the mansions of fear, through the mansions of pain,
I see my daddy walking through those factory gates in the rain,
Factory takes his hearing, factory gives him life,
The working, the working, just the working life . . .
“Factory gives him life”: Can the same be said of the job at Wal-Mart or McDonald’s or even the relatively high-paying technology positions at WorldCom or Enron? Libertarians and neoconservatives may long for the day when subsistence farming and manual labor disappear completely from the American scene, but what kind of a life can you build for your family if your continued employment—let alone the continued existence of your employer—is always in doubt?
These questions have an added urgency here in Rockford, now that Ingersoll Milling Machine has closed its doors after 112 years and filed for bankruptcy, and one of the largest private employers, Hamilton Sundstrand, is sending signals (perhaps unintentionally) that the days of its factory in southeast Rockford are numbered. (After months of negotiations, Sundstrand’s management gave the union less than a day to examine a six-inch-thick contract proposal; when the union asked for more time to examine the details, Sundstrand locked the employees out.)
Shortly after Ingersoll gave its 300 employees two hours to clear out and locked its doors forever, the local Gannett paper’s token Republican columnist opined that “Some doomsayers will predict that Ingersoll’s failure signals the end of manufacturing in the Rock River Valley.” I’ll take the bait: Yes, manufacturing is leaving Rockford—20 percent of local manufacturing jobs have been lost over the past three years. And, unlike in my hometown in Michigan—which, in the recession of the early 1980’s, successfully exploited its access to Lake Michigan to move to a tourist economy—nothing is replacing it: Unemployment in Rockford is back in double digits—its highest rate since that earlier recession. Rockford is more like Flint, post-GM, struggling to avoid bankruptcy. The major difference is that the political, media, and civic leaders in Flint acknowledge the problem.
When Bruce Springsteen wrote the final verse of “Factory,” he was describing the pain and anger of men who would return to their jobs the next morning, when the factory whistle blew once again:
End of the day, factory whistle cries,
Men walk through these gates with death in their eyes,
And you just better believe boy,
somebody’s gonna get hurt tonight
It’s the working, the working, just the working life.
That pain and anger, however, is nothing compared to the social disruption caused by the loss of those jobs. Over the past year, I’ve watched marriages end—good marriages, loving marriages, with young children—as the financial strain of unemployment, compounded by the loss of healthcare just when it is needed most, pulls families apart. Homes are lost, and the financial effects of factory closings cascade through the local economy as small businesses—from sandwich shops to metal-working and packaging plants—find themselves without customers. What does a father do when he can’t find a new job within six months, or nine months, or a year? He can “retrain” in one of the “hot new fields,” the democratic capitalist replies—but that assumes that companies in those fields are opening up in Rockford. (They aren’t.) Then he can uproot his family and move where the action is, the libertarian smugly answers. (The market has spoken.) But at what cost to his family and to Rockford? And where? And when his family arrives in the Promised Land, what guarantee will the father have that his new job won’t head south, or to China, or to India?
Yes, life involves certain risks, and most of us are here in the United States because our ancestors suffered similar economic “dislocations,” but there is a difference in kind, not simply in degree, between the farmer in 1832 who left one subsistence existence in Alsace for another in the fertile fields of Southern Indiana and the engineer in Rockford in 2003 who may eventually—and, in all likelihood, far from his hometown—find work that will pay him wages that the subsistence farmer would never see. After all, that engineer will always know the uncertainty that comes from earning your livelihood at the mercy of another man.