Old axioms unsuitable for new needs

20 November 2008
“Wandering between two worlds, one dead, the other powerless to be born.”--Matthew Arnold
The time for Obama and his “change” phrases will soon get tested. As candidate, he wisely refrained from spelling out the specifics of policies the country needed or what he actually planned to do about failed foreign policy and a badly wounded economy -- aside from his less than radical health care package. Three days after the election, unemployment rose and foreclosures continued, and one of the pillars of global economy, General Motors, pleaded with Congress for bailout money. Ford and Chrysler joined the begging parade. GM executives announced the company was losing $2 billion a week and only Congress (the taxpayers) could save the company that had extracted unimaginable hundreds of billions in profits over the years from the very same source -- including mammoth salaries and perks for the top honchos. The auto CEOs met with Congressional leaders and behaved as if everyone knew they deserved the money. When House Speaker Nancy Pelosi questioned these pompous failures about the accountability of the funds they requested, she also promised these czar-like auto chiefs that Congress would monitor the spending of the bailout funds -- if it decided to vote for them. She and her Senate counterpart, ironically, shared the basic assumption of the dim witted auto moguls. “A healthy automobile manufacturing sector is essential to the restoration of financial market stability, the overall health of our economy and the livelihood of the automobile work force,” wrote Pelosi and Senate majority leader Harry Reid to Treasury Secretary Henry Paulson. (NY Times, November 8, 2008) Did Pelosi and Reid know that in the early 1920s, General Motors brass bribed the Los Angeles City Council not to finance public transportation so that the motor car industry could thrive in the entertainment capital? Did they recall that in the early 1950s, GM CEO Charles Wilson boasted, “What’s good for General Motors is good for the country?” At the time, liberals feigned outrage at such a callous remark. But Wilson’s statement contained a painful truth: this large corporation had become a means and end of U.S. policy. Automobiles, after all, required glass, rubber, metals, chemicals, cloth for upholstery, plastic and other ingredients. Factories large and small throughout the country furnished these goods. Auto dealers, new and used, repair shops, and car washes serviced those who used this basic American product. Cars became so quintessentially American that Chevrolet (GM) took its place alongside apple pie and baseball. Who could question the centrality of auto manufacturing to the soundness of the economy? In those days, the big 3 automakers controlled production and sales -- long before VW, Toyota and other foreign manufacturers began to compete with better products and prices. But in recent years, the auto bosses have behaved like the Wall Street idiots and other titans who directed the U.S. economy straight into the toilet. They made stupid decisions, rewarded themselves with high salaries, bonuses, perks and stock options and sneered at critics who warned that by continuing to emphasize SUVs and Hummers and not try to make a car for the times, they would lose their traditional markets. Eventually, even the stupidest Americans learned that “buying American” meant owning a gas guzzling, road destroying, environment polluting collage of heavy metal and cheap plastic. Furthermore, it would break down far more rapidly than the much demeaned but more gas efficient and environmentally friendly cars. “Can you imagine these jerks coming to Congress, not to plead their case and admitting they were terrible managers, but we shouldn’t worry because they’ll do better in the future?” an irate House Member confided to me. “These multimillionaire losers walked in here with a sense of total entitlement! As if they had earned our infinite respect because they led GM, Ford and Chrysler. I hope someone gives them the news. They’re not number one any more.” By 2008, much of the U.S. auto-related industry had already fled to cheaper labor markets and the foreign competitors (like Toyota) assembled cars in the United States. But beyond that, think of what the letter signed by Pelosi and Reid assumed axiomatically. As the environment deteriorates, why not question the continued manufacture of autos and not propose a switch to mass transit and more sustainable vehicles? In the global warming age, to juxtapose the words “automobile” and “health” as they do in their letter seems incongruous -- even if thirty years from now someone designs a car that runs on nitrogen. The Founding Fathers created two Houses so Members of one (Senate) could think long term. Unfortunately, the contemporary Solons have absorbed the truncated future orientation of the immediate gratification society and six years seems to be the longest any of them dare peek ahead. No one in power has faced the obvious environmental challenge. Al Gore, now out of competitive politics, delivers periodic sermons on the subject. His essays vibrate with sincerity, but remain vague when it comes to dictating the harsh measures needed to deal with the critical situation he portrays. If Congress thinks bailing out the undeserving car manufacturing tycoons will help restore economic equilibrium, then they might also fund experiments designed to make pigs fly. Even with some accountability built into a Congressional auto bailout -- not that likely -- steering money to antiquated and damaging technology appears logically counterproductive. Perhaps President Obama in January will begin to challenge this and other antediluvian assumptions? In foreign policy, the elite still stride confidently with that “We’re Number 1” step. This supposition derives from the 20th Century, when the United States possessed the world’s most formidable economy and, much of the world assumed, a powerful military loathe going to war again with an enemy that could fight back. The world now knows that U.S. superior will, technology and fighting ability has resulted in lost wars (except against tiny Grenada and impotent Panama) and squandered resources, including lives. After the invasion of Iraq, the world also learned that partnership with the U.S. means subservience to the President’s Oedipal whims or just plain hubris. After January 20, President Obama will have to define the role of the United States in the world just as he will weigh in on how the government directs the U.S economy -- not a return to Wilson’s 1953 “What’s best for GM.” The United States no longer leads a free world. Indeed, the very meaning of the words “free world” in 2008 should confound all mavens of international affairs. If Obama opts for another try at a New Deal, he will try to direct money away from bailing out the Wall Street and automobile company losers and into desperately needed public works. He will need many times more the investment made under FDR in the 1930s, for restoration of water and sewage treatment plants, reparations to roads, dikes and bridges, the refurbishing of education and health foundations and public transportation. The environment’s health must also become the parchment on which the new policies are written. An honest and intelligent new President will subject to scrutiny the axioms that now underlie language relating to the U.S. role in the world. Isn’t it time to forget the silliness of the “we’re number one” axiom -- a meaningless concept in an age of deep environmental threat and interlinked economies? The practical meaning of #1 means ever higher defense budgets that produce weapons that don’t defend the country. Look how quickly the mavens of free market economics abandoned their prized dogmas. Those who demanded bailouts of Wall Street and now the car industry had steadfastly demanded deregulation so the invisible hand of the market could govern their business dealings. As soon as business got really bad, they came like indignant beggars to demand government help for financial and manufacturing business they had run into the ground. Instead of simply taking over the financial and manufacturing areas, the government seems intent on lending taxpayer money to these arrogant airheads -- because liberals in Congress want to forestall more huge job losses. But cars had their century -- the 20th. This century’s environment has sent dire warning signs about continuing to employ technology that relies on fossil fuels and causes insane highway congestion, noise pollution and death. Because people -- including the most powerful -- don’t question axioms, Obama will face a Herculean task. He seems up to it!
Saul Landau is a Fellow of the Institute for Policy Studies and a senior fellow of the Transnational Institute. His latest book is A Bush and Botox World. His latest film is We don't play golf here! And other stories of globalisation .