Every Foreign Dollar Counts at NRO
National Review Online has run numerous editorials against the idea of a federal loan to the Big Three, without, so far as I can tell, any dissenting voice arguing for such a loan from any of its columnists, most of whom have also attacked the idea of a loan for Detroit. NRO's opposition to a loan for the Big Three cannot credibly be explained by any general opposition to government loans to private enterprises or concern for fiscal restraint, since NRO was an active proponent of the Wall Street bailout, with National Review editor Rich Lowry going so far as to chide House Republicans who had argued against Treasury Secretary Paulson's plan for being "extremely irresponsible." So far, the amount of federal money given to the financial sector by the Treasury Department and the Federal Reserve is $4.6165 trillion, vastly more than the Big Three are requesting, and Bloomberg reports that the "U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers." Instead, NRO has taken a line that, in any other context, it would condemn as anti-American, repeatedly praising foreign manufacturers and denigrating American manufacturers and the Americans who work for them.
Given NRO's position, one would think it unseemly, at least, for NRO to be running advertisements for the "Hyundai Holiday Sales Event," but NRO has done just that. Of course, Beltway conservatives have a long history of accepting foreign money while taking positions inimical to American manufacturers. The Heritage Foundation's dependence on South Korean donations became something of a scandal in the 1980's. And there is no doubt that Hyundai is a foreign interest: in the 2007 model year, its cars sold here had an average of 10 percent domestic content, as opposed to 80 percent for GM and Ford. Meanwhile, South Korea, a country saved from communism by American blood and still guarded by Americans, effectively blocks American car imports into the country. Perhaps NRO might want to change the slogan for its current fundraising drive from "Every Dollar Counts" to "Every Foreign Dollar Counts."
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What chance do we have in this country when our media giants are so throughly compromised, and yet the vast majority of the public still believes their lies?
It's folk like the staff at NRO with their let-them-eat-cake attitude toward anyone who doesn't know a Chardonnay from a Chablis that give, by association, conservatives a bad name.
Had they told Wall Street's billionaire mendicants to get stuffed, when they appeared with outstretched tin cops before congress, their Scrooge-like attitude now toward the Big 3, though hard hearted, would have been recognized as a stand on principle. But, now reflexively telling the Big 3 to pound sand, illustrates why the Republican establishment they represent is dooming itself to the ash heap of history.
Or, after eight years of the dull-witted George Bush, has NRO fallen prey to reliance on faith-based policies?
You've hit the bull's eye. A loan is a loan, after all, and despite all of my opposition to your's and Mr. Richert's arguments in behalf of it, I now agree with you. A loan is not the same thing as that largess given to the banks. Now, that was an abomination.
What is even more ludicrous is the spectacle of Bob Corker, alleged "conservative" (complete with phony cornpone accent) from Tennessee, who voted for TARP, excoriating the Big Three on health benefits for its workers. This from a clown who opposed restrictions on executive pay for Wall Street. (I guess blue-collar folks get their health benefits wiped out while Wall Street still gets bonuses.) Oh, and that jackass also had the termerity to ask the CEOs last month if they'd work for $1, again after he'd opposed any restrictions on compensation for Wall Street.
And, as if to illustrate clearly, what an absurd embarassment Corker is (what an apt name, BTW) he accuses Chrysler of just wanting money to last long enough for a merger. This from someone who voted for TARP that has not apparently accomplished anything except consolidation among banks. (As evidenced by today's announcment that Capital One, a nonbank credit card provider whose advertisements substract IQ points from viewer, is buying Chevy Chase Bank in Maryland. Capital One received $3.5 Billion in bailout money.)
This is a ludicrous spectacle. As Miles notes, the GOP is deservedly reducing itself to permanent minority status.
P.S. Corker is doubtless angry that GM gave up on Saturn, which is based in TN. That criticism has merit, but GM gave up back in the 90s and now uses the Spring Hill plant to build crossover vehicles.
Tom,
You have been caving walls on these folks for some time and we certainly appreciate it. As Dr. Wilson said a few months ago, "How many walls need to fall on you folks before you see the light.?" Well this bunch you are trailing seems to prefer darkness to the light of day so just keep tumbling the walls. Thanks
Just because government overregulation of the automobile industry has contributed to the malcondition of the industry, just because the labor unions have been cartelized and have demanded more than they and their members are worth in wages and benefits, just because greedy executives and some share holders have pursued profit above quality and a competative tactics, and just because some, particularly Republicans, are duplicitous enough to bail out the financial institutions but not the automotive industry, does not mean that the government should be able to take from me and other Americans through the three I's - Income tax, Interest on debt, Inflation tax - the money to bail these people out. Although the Constitution has been a meaningless piece of paper since 1865 - being that the union of constitutionally federated republics for which the Constitution was written ceased to exist at that time- I still hold these people accountable to that Constitution; and that Constitution does not allow this bail out, whether it be financial institutions, the automobile industry, construction contractors (now demanding their share) or "homeowners," i.e. people living in houses technically owned by banks because they hold the mortage although the banks themselves do not actually have the money to claim ownership.
Lets hope the main stream media which is owned by 5 media barons who are members of the same club go bankrupt as well who own publications like NRO, Weekly Standard, etc.
I must admit, I'd hoped this topic was dead. Reading Piatak and Gutzman attack each other was just no good.
Don't worry Mr. Piatak, they will get their bailout. But don't expect much.
If you stick to ChroniclesMagazine.org, Mr. Maxwell, I don't think you'll need to worry. Professor Gutzman declined my invitation to bring the discussion over here.
Why anyone even bothers to pay attention to the yuppified corporate rag that once was National Review is beyond me.
Mr. Peters,
I do so enjoy your posts about days past, but I must disagree with your current position on the auto industry loans.
Allow me one question, given your reasoning:
As I recall, you are a native of Louisianna. Would you consider that French territory that you were raised on or do you find President Jefferson's acquisition of said property beyond the reach of aforementioned Constitution?
Mr. Piatak,
As you know from my many posts, I am for these loans to save manufacturing in the US.
However, I am just astonished by the poor performance of these docile CEOs.
When they got attacked for using private jets while the companies were sinking into bankruptcy, not one had the temerity to point out that the federal government provided over 100 similar jets and that body is beyond bankrupt.
Not one had the guts to speak up and point out the sheer lunacy of the massive grants to Wall Street as versus a relatively meager loan to Main Street.
Not one could sputter a few words about saving over 3 million jobs across the country. And then point a finger at the foaming Congress-crooks and ask if they want to be responsible for that job loss.
Not one thought of standing up and acting like a man.
What would have been the risk to them? Get fired and have to settle into retirment with only a few hundred million in the bank?
We need the auto sector but we are long past needing worthless gazillionaire chief executives.
I think what Miles Glorious is alluding to @2 is the real reason for the NRO crowd's hypocrisy on the automaker bailout - the perception that working-class people might benefit from it. Its truly amazing that with the ever-growing list of "oppressed people" for whom we are to show the utmost tolerance, its nonetheless OK to dump on working-class people (especially working-class whites).
Unbelievable. If only your average movement conservative knew how treacherous these standard bearers truly are....
Eagle @ 20
Yes, I do consider Jefferson's move unconstitutional, although good men saw it otherwise in those days of the nascent union; and the union of of constitutionally federated republics paid a price for it.
Eagle @ 20
I would add that your question about Jefferson and the Louisiana Purchase reads not unlike the admonition: Since it is known that your mother fornicated, how can you speak out against fornication? Or it reads like Satan's ploy: Since you have once sinned, there is no turning back. You might as well keep on sinning.
A conspiracy-nut friend of mine said if William Buckley had not shown up when he did, he would have had to be invented. On the other hand he was a New England patrician who worked for the CIA, so the Establishment concocted the conservative movement so it could mislead the gullible into supporting no-fault capitalism. Brilliant!
Personally, I think that many of these globalists would love to see the American auto industry fall, since it would make the U.S. dependent on Asia for imports, thus inextricably binding the U.S. even more to the globalist apparatus.
Mr. Peters,
What I took from Eagle's point is that even conservatism and consitutionalism, when it becomes divorced from any practical inquiry and refuses any form of change, becomes ideology. The only argument for assistance to Detroit is a pragmatic one, that its benefits to the citizens and communities affected will outweigh the costs. That it is well beyond the Framers' intent for the powers of the federal gov't cannot be debated--it is evidently true. But that question is not the sole one to consider.
And Tom is quite right that much of the opposition to the Detroit bailout is faux conservatism masking a contempt for the Midwest and unionism. (And even the contempt for the latter is really just a proxy for contempt toward the former.)
I remain hard pressed to understand how a transfer of wealth from those of us who produce it to those who lost it through mismanagement, malfeasance and poor planning - including the government itself, the unions, Ford/GM/Chrysler - by means of Income tax, Interest on debt and the Inflation tax - is nothing but theft regardless of how allegedly noble the cause is, i.e. "saving" a fundamental industry.
Mr. Wilder @ 20
I understand it quite differently.
It seems to me that it is rather like one who is in favor of goring everyone's ox but his own.
Or, preach against everyone's sins but my own.
I do not in the least accept that the benefits of the impending bailout out weigh the costs because no one has come close to demonstrating it, save in the framework of his own bias.
I, for one, am not divorced from practical inquiry.
It would also seem that there might be some on these fora who champion "fundamental principals," but when those principals are turned against an issue of their bias, those principals suddenly become "ideology" and the one applying them becomes a "faux conservative."
One anticipates a conservative movement of one, with everyone else being liberals.
“Our 'neoconservatives' are neither new nor conservative, but old as Babylon and evil as Hell”--Edward Abbey
Mr. Peters, could I offer an illustration of this conundrum to show how it might be possible to hold both sides of this paradox?
I remember being at first stunned to find out that Rep. Ron Paul routinely inserted pet spending projects for the benefit if his constituents into some of these pork bills that go before Congress. He would then vote against the bill. A contradiction? A lack of values? Tim Russert certainly foamed.
His explanation was simple and fair. Why should he cheat his constituents out of their share of this money? They pay taxes too, do they not? At the same time, voting against the bill (which would probably pass due to the corruption of Congress) maintained his cohesive value system as a conservative.
@18Etienne Gervaise
Buckley attended a few Bilderburg meetings and was part of the law suit to shut down Liberty Lobby so I don't think he is a genuine conservative like Pat Buchannan.
http://www.americanfreepress.net/html/bill_buckley128.html
I think your friend is right.
What does your friend think of 9/11 and the cover story that 19 hijackers some being monitored by the FBI, in Attas case 3 different intelligence agencies German, Czech and US with boxcutters were able to hijack for commercial planes undetected for hours with a few hours of flight training and crash them into major landmarks in the US unobstructed..
I think the government story is totally believable and we shouldn’t even question it.
If I was the US I would make sure Al-Queda doesn’t recruit Santa Claus as his sleigh can go faster than any US aircraft, routinely every year violates restricted airspace and has the ability to enter people’s houses even the White House.
NORAD monitors him every year around Christmas time.
He would be a perfect mull for transporting Afghan heroine which raises the question how does Santa fund his operation each year?
Where is his base in the North Pole?
All of this goes along with the "free trade", open border, globalist mantra of the neo-con elite.
They desire to break the high wage backbone of American manufacturing and thus the middle class so as to bring the Americans into their globalist "new world order". The Detroit based auto industry must be ruined so that it can be refocused on cheap wage high markup auto imports that are planned to come from China.
The destruction of this backbone will create a negative economic multiplier effect that will ripple across the United States causing the newly poor Americans to finally embrace the neo-cons dream of regional global government as solution to the mess that they created. Arn't these people wonderful?
A small point on Korea. Even in a totally free market,very few US cars would be sold in Korea or, indeed, anywhere outside the American continent. The problem is that US cars are of a different conception to those bulit in, say, Korea, Japan or Europe. Too big and too hard on fuel. The crazy thing is that, through their European subsidiaries, the US carmakers have had access for years to the technology to build world-style cars but simply haven't adapted their European models to the US market.
Mr. Peters,
Mr. Wilder expressed my thought very well. While not entirely consistent with the way the world would look if I drew it on a blank sheet of paper, I cannot see how one can pragmatically scoff at the LOANS that are being sought and condone the destruction of the American auto sector.
As to your point about wealth transfers: unlike the trillion-plus dollars given to the Wall Street gangsters, we are talking about a $35 billion LOAN. The last major loan given by the government to an auto maker was in the 1970s when Chrysler paid it back EARLY and at a PROFIT to the federal Treasury.
Not consistent with my belief in the separation of government and commerce - true. Prudent and beneficial to Americans under the circumstances in the 1970s - absolutely.
Mr. Kenny,
Your's happens to be a fashionable, but completely false statement. I suggest forego the mass media and look at the reality of the situation.
The Big 3 domestically, but particularly through their foreign subsidiaries DO make cars appropriate to the closed markets you mention.
AND, interestingly, in Japan some of teh rich and powerful are willing to forego doemstic marks and pay the huge tariffs to purchase a Cadillac for their limousine because it represents a status symbol.
Here is a great (though bit crass) explanation of the auto industry "bailout". As is usually the case, Mr. Stewart's "fake" news makes much more sense then what the blondie bobble heads are instructed to read to us on the "real" news.
http://www.thedailyshow.com/video/index.jhtml?videoId=212877&title=autoeroti
Surprises will never cease. CNN, of all outlets, produced some interesting statistics.
Motor City is USA
http://money.cnn.com/news/specials/storysupplement/stateautoworkers/index.html
Eagle @ 27
I am certainly aghast at and do condemn the transfer of wealth to the "Wall Street gangsters."
The "loan" of which you speak will likely be at a "special interest rate" to be paid off in inflated dollars, assuming it will be paid off and will not be in some instance of "mercy" forgiven. There are no guarantees that this "sweetheart loan" will work. In fact, what "works" has not yet been defined by any party.
Finally, why should the people of the United States, whose money this is, take the risk when banks and private billionaires don't want to put up the money?
Be it principle or ideology, which will depend on whose ox is gored, I stand firm against consumerism; and this "loan," a bailout by another name, is promoting consumerism with the money of hardworking Americans. Federal, state, and local governments have subsidized the automobile industry with roads. A car, brand new, as it is driven off the lot, depreciates in value. Madison Avenue is set to work telling us all that we need this "thing" as often as possible. Through this "thing," suburban life and non-agrarian "rural" life have been made possible. One could go on with the list. Now that the parties involved - government, the unions, the CEO's and shareholders, and "consumers" have made, each of their own part, bad choices, the money of hardworking Americans is supposed to "rectify" that on the assumption that the system will be thereby saved and on the assumption that the saving of such a system is "good." Somewhere there is a "conservative" principle, I believe, which speaks against this; or is it the ideology of a faux conservative?
Julius @ 26
Most, although not all, of the U.S. manufacturing sites for foreign cars are located in the South and in other regions of the country in which we have "right-to-work" laws, contributing in no little part to the competitiveness of the foreign cars. Do you then favor, as per the spirit of your post supra, federal legislation eliminating "right-to-work" laws? This would certainly be a "pragmatic" domestic step in leveling the playing field for "American" cars.
Mr. Peters is certainly correct that the South's proclivity for using tax subsidies (you didn't mention that) and its anti-union, anti-worker laws to attract business (earlier having lured away the textile industry that it then lost shortly thereafter.) These are the New South men who were denounced by the 12 Agrarians.
I understood your point, which is essentially one of consistency in philosophy. I do not agree with either your assumptions that the loans will be unpaid (that is rank speculation on your part) or your repeated statements criticizing the industry and its workers, which I think are overbroad.
But what cannot be questioned is the point Mr. Piatak made, that the fashionable "Right" gave either its support or only token opposition (which was promptly abandoned to ensure success of the bailout) when the financial industry was involved. That effort now amounts to a commitment of $7.7 trillion dollars, that is Detroit's loan request amounts to one-half of one percent of that commitment. Yet that same fashionable Right opposes Detroit's request. The irreconcilable contradiction can only attributed to prejudice. And yes, to insist on your position because it can be successful against a weaker opponent after failing against a vastly larger one is still prejudice.
It is fine to register skepticism and philosophical opposition, and use that perspective to rigorously test the structure of the loan to ensure it bodes the best ground for success. On the other hand, to allow it to oppose and defeat the loan (which would be successful only because of demagoguery against Detroit) is impractical and conservative only in an abstract sense.
Mr. Peters:
The cars made by the Big Three are far more American than what the foreigners are peddling here. In the 2007 model year, the average car made by the Big Three had 79% domestic content, versus 35% domestic content for the foreign cars sold here. The Big Three also buy 80% of the car parts made here, as well as spending vast amounts on research and development, employing 65,000 in R & D in Michigan alone. By and large, the foreign auto companies do all that high end work abroad. I'll tell you what you call a nation that assembles products designed abroad for sale only in that country: a Third World nation.
A not often mentioned reason for the "competitiveness" of the foreign car makers you cite is the fact that they have received massive government subsidies to set up operations here: http://www.howtobuyamerican.com/content/db/b-db-autos.shtml Funny, but I don't remember hearing all those hyperventilating over the prospect of a loan for the Big Three decrying government subsidies for foreign automakers.
Perhaps it is just plain old "evil" raising its head here. Look at the temptations placed in front of these "kids" (Joseph Sobran's term), and look at what is on the other side.
As conservatives, I think we can agree that fealty to neighborhood is important. Rich Lowry's Manhattan neighborhood is full of slick stockjobbers who made out big for years until the floor fell out from under their world. Like Mr. Lowry, these friends of his do not work with their hands except to type at their computer consoles and to tap text messages on their Blackberries. When Mr. Lowry dines out at Mario Batali's, he doesn't see his old Wall Street friends any more. His friends aren't around to share dinners and the appropriate course wine pairings. The Wall Street collapse has left a big hole in Rich's world.
But Detroit is not part of Mr. Lowry's neighborhood. It is an ugly city and its auto workers actually work with their hands with tools- pretty rough stuff. Mr. Lowry has no fealty to Detroit but to use it as a pinata for his free market scribblings.
With all due respects Mr. Peters, it doesn't really matter if the South does offer a lower, non-union wage alternative to the North. As long as that region, along with the rest of the country, remains trapped in a no-win race to the bottom with the likes of China and Vietnam, it will economically go nowhere either.
Mr. Leaberry makes an important point regarding fealty to neighbors and regional bias. We should not forget that one of the reasons David Frum attacked Chronicles and the Rockford Institute in his infamous "Unpatriotic Conservatives" piece for National Review was the fact that they are based in “the rusting industrial city of Rockford, Ill.” Frum and his ideological confreres have no use for "rusting industrial cities" or the Americans who live in them.
My previous post was partly facetious. However, it is true that people of the stripe of Rich Lowry, Rick Brookhiser and Ramesh Ponnuru have much more in common with a Lehman Brothers broker who gave $ 1000 to the Obama campaign and feeds Charles Schumer's enormous fundraising apetite than he does with a Polish-American Detroit autoworker who lives in Macomb County, hunts and fishes in the UP, voted for Ronald Reagan twice, and has been tortured by Detroit Lion ineptitude for fifty years.
@37 Derek
In 1929 the stockbrokers who lost everything leapt from high windows. It's a pity today's new breed of seared-conscience cowards hasn't the decency to do likewise. They just move to Washington where they can ruin the nation from another angle.
And since I was in Detroit a couple of months ago, I'll dispute the ugly part. I drove through several neighborhoods between 7Mile and 8Mile. The houses were well maintained, the lawns were trimmed and flowers bloomed aplenty. Folks were washing their cars and waved as I drove by. The roads are pot-holed, and the main drags were pretty run down, but that was a result of City Hall taxing businesses so hard they all moved to Southfield.
@34 Bill
The reason the textile industries moved from Massachusetts to North Carolina was the former state's passage of Child Labor Laws. Capital fled south in the face of government meddling. When the government can take no more from us, we'll become enterprising again.
@41, Etienne Gervaise
I can only assume you were on the west side of Detroit between 7 Mile and 8 Mile Roads. Go a little east and you'll see ugliness, especially on Van Dyke, around 6 Mile Rd. Or, go up Jefferson Ave. toward Grosse Point and St. Clair Shores. Tell me there isn't a contrast. Or go down toward to the River Rouge on Highway 75: absolute industrial ugliness. Of course, I find cities in general: ugly. So, my comment is probably relative, since beauty is in the eye of the beholder.
Mr. Peters,
How can you assume the loans won't be repaid or will be issued at low rates? To use your words: " no one has come close to demonstrating it, save in the framework of his own bias..."
In fact, the history with Chrysler and the vast media coverage of this all would suggest the likelihood is quite high that the opposite of what you suggest will happen.
As to consumerism, that is a different war you are fighting on this battlefield upon which we are discussing who in this world will have technological innovation, manufacturing independence, sound wages for skilled labor, and whether those things are important to a state.
If you suppose that we can do without manufacturing and millions of people can instead find their work in some magical "new economy" comprised of internet ad posting and hamburger flipping, then perhaps you have missed the very well argued points presented by intelligent men on this here site.
@43 J Meng
Detroit is a large city and I only got a small sampling. I did drive 7Mile to Grosse Point and saw lots of modest duplexes, but not the ugliness of a blighted community. I did wonder about 12' fences around the schools, and the roll down doors on businesses admittedly look like Caracas, but with the exception of Riverdale I saw no really ugly neighborhhoods while I had expected to see extensive blight.
Mr. Piatak:
You ought to at least have the courtesy to address my (unarguable) point at #18 - why should those of us forced to compete without any subsidy in the free market have to subsidize the overpaid management, as well as Democratic UAW goons, at the Big Three?
"Conservatives" should stick with race or at least moral issues advocacy. Libertarians won the economic debate decades ago.
Great column Mr. Piatak.
Ive given up on NR.
Rich Lowry and friends oppose the bailout of the Big Three as opposed to Wall Street out of animus towards organized labor.
Rich Lowry is just a piece of yuppie garbage. And the party that he supports (the Republicans) is going to get its teeth kicked in again and again, as long as types like Lowry and his NR flunkies keep on calling the shots for Republicans.
Mr. Haller,
You are surely joking that libertarians "won" the economics debate at any time, much less "long ago." Libertarianism is based on prescriptions of a mythical ideal market that does not exist in reality. I also would substantially question your claim to be competing "without subsidy" in a "free market." The manipulations of tax codes at all levels of gov't provide substantial subsidy. The use of unconstitutional trade deals to bring in goods produced overseas at low-cost (due to foreign subsidy as well as US gov't subsidy, including through the Ex-Imp Bank) create a subsidy to pretty much every business in the country. Artificially low interest rates and the intervention of Fannie and Freddi, et al., create artificial demand for the housing and construction industry. I'd be interested for you to present actual examples of your "unsubsidized" competition.