Strengthening Constitutional Self-Government

No Left Turns

The Crisis of the New Order?

Is the problem we see today the collapse of the New Deal and its successors?

The real story is the frightening extent to which Detroit is just the New Deal U.S. in microcosm...the Big 3 became essentially private versions of the middle class welfare state...social agencies for providing non-market validated income, health and retirement benefits, with a sideline of making cars....and now the model is unsustainable. In part it is because of the burden of the retired UAW workforce, which now vastly outnumbers the actual working members. As of 2007, the UAW represented 180,681 members at Chrysler, Ford and General Motors; it also represented 419,621 retired members and 120,723 surviving spouses.

This is not dissimilar to Social Security and Medicare for the U.S. economy as a whole. Both of these entitlement programs are unfunded liabilities of the U.S. government, politically, if not legally, and, on a current basis, consume almost 50% of the $3 trillion federal budget. They were viable on a pay-as-you-go basis only at inception and as long as the ratio of workers to beneficiaries is high. Neither condition obtains today. So it becomes an interesting question and rather soon I think: when the U.S. government becomes like Detroit...who does the bailing out?

Discussions - 10 Comments

John Hinderaker:

" It must be very strange to be President Bush. A man of extraordinary vision and brilliance approaching to genius, he can’t get anyone to notice. He is like a great painter or musician who is ahead of his time, and who unveils one masterpiece after another to a reception that, when not bored, is hostile."

John Hinderaker has zero cred.

Hinderaker has a point. As for the bailout, it is, even if indirectly, a pure UAW bailout.


The entire US auto industry is not in trouble (Toyota and Honda, both of which manufacture a substantial portion of their US sales right here at home)were doing quite well, while the Big 3, saddled with Depression era unionism have been mired in failure for years.

So it becomes an interesting question and rather soon I think: when the U.S. government becomes like Detroit...who does the bailing out?

Answer: We will. I am 39 years of age. Anyone my age or younger will be in the 70-80% tax bracket (possibly higher if you include the requisite inflation the government will use) by the time we are ready to retire in 25-30 years. That is true even if we don't expand SS and Medicare/aid, which we will.

The question is not rather we have crossed the proverbial line into immoral levels of government taxation (we already have), it is what that will look like.

Will our country look like a euro-socialist one (e.g. Sweden), or will it look like Argentina (i.e. corrupt, perpetually impoverished). I think it is too much to hope for to think our large and diverse nation can be a Sweden. Nope, Argentina is our future.

By the way, Argentina just "nationalized" their 401K program last month. Think about that before you invest in the false promise of a Roth IRA...

Oh, and PLEASE no posts about how Detroit has something to do with "national security" and our industrial base.

Just a small amount of fact checking will erase any delusions you might have about that. The coming auto-bailout is all about the UAW...

Bash the UAW all you want, but so many industries are tied into the disposable income of those overpaid proles. It is funny that people are now directing anger toward them, are you all volunteering to give up insurance and retirement at your job to help out the economy? As for the nationalization of 401k, that already happended here. The government said that if your pension is underfunded you can't get all of it now becuase then there would be none left for the people behind you. Why choose between aregentina and sweden? What I am thinking is a clean break, a tabula rasa moment. Would we reinstitute the Constitution and the principle of Federalism, mabye. A clean break is the only way we get an environment with optimism toward the future. And yes, that means revolution. Whatever happended to glorifying the words Jefferson said on this topic. Is it hard to do now that you might have to get your hands dirty or risk your necks? Get your AR15 before they outlaw all 223 308 and 45 caliber ammo which is what Obama has said he wants to do. Its time to choose between telling your grankids that about freedom lost or glory earned.

Bash the UAW all you want....are you all volunteering to give up insurance and retirement at your job to help out the economy?

It's not about anger or "bashing" - it's simply that they asked for (who wouldn't) and received too much (this is managements responsibility, as well as the legal environment Washington created).

I was listening to the hearings yesterday and the president of the UAW was trumpeting the fact that they have given up any wage increase for the next few years!?!?

Increase! How about wage CUT of 50% to get them on par with the successful American auto industry of the south??

The 'Big 3' blew it with the buying public when they put out the horrible quality of the 70's and 80's. Even so, they still have a viable business by being the 'Small 3' and selling work trucks and the like. However, they can't even do that competitively because they gave away too much tot he unions. So any bail out is really a giveaway to an unworkable business model, and everyone knows it including the congress who will vote for it next year. Why would they do it? Because they don't want to fight the union...

Of course this is the UAW's fault, although pointing that out is hardly bashing them. The UAW would have been fine if it weren't for the fact that other people started making cars of approximately equal quality with drastically less overhead. As a talking head recently put it: what's worse - lower wages and fewer benefits or no job?

As a talking head recently put it: what's worse - lower wages and fewer benefits or no job?
Glad to see that the spirit of 1776 is alive and well with the populace. How would you explain this to a child, who the world that is forming right now will be his reality? What if someone in China said they would do your job for way less money and no benifits? The Union's pushed hard and got a good standard of living for their people. If you don't protect that in this crucial point than the standard of living goes down across the board. For instance, what happens to the huge health care industry now that people may not have the benifits to spend their last few years in and out of hospitals ringing up MRI's and $50 asprins. What is the appeal of the middle class deteriorating? Do you all think it will bring people back to the church and tradional values, as opposed to decadence and hip nihlism? The funny thing is that I have not heard the old buzz word "service economy" during this downturn. I was troubled from the first time I heard this and the idea that everyone would just have an office job and no one would produce anything and we would be fine. I think the only service industry that can exist without real production of tangible goods would be prostitution.

Brutus,

You ask allot of questions that you imply are interrelated but allow me to address two:


1) The Union's pushed hard and got a good standard of living for their people. If you don't protect that in this crucial point than the standard of living goes down across the board.

Problem is, they asked for - well, they got by the point of the sword - too much. Folks like me simply can't afford all their benefits by paying such a high price for a car, thus we go else where. There has to be a balance. The successful southern car industry, with workers who actually help their industry by helping build better cars, is proof o positive you don't need to chain political prisoners to the machines to have a viable and vibrant manufacturing system.

2) For instance, what happens to the huge health care industry now that people may not have the benefits to spend their last few years in and out of hospitals ringing up MRI's and $50 asprins.

I work in said industry, and yes with the coming socialization it will shrink.
But that is not the free market's fault, that is the sword again...

The liberal illuminati can't be thinking logically with this bailout, and who it will help.

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