Monday, June 1, 2009

I drove my Chevy to the levee and it collapsed under me

As American as mom, apple pie and Chevrolet: mom has lost her pension and health insurance; the pie filling comes from China; Chevy is bankrupt and then some. Even with GM stockholders wiped out, its bondholders getting pennies on the dollar and 70 billion in tax dollars throw in, there is no guarantee that GM will survive even as a shadow of its former self.

How could they go from being the world’s largest car maker to nonexistence in only 25 years? The simple answer is Ronald Reagan. His premise was that middle class union workers were nothing more than greedy, lazy louts and a drain on the rich. We could all be rich if we let the Masters of the Universe run their businesses the way they wanted. We didn’t need to make Chevy parts here; imports are cheaper and better. We didn’t need to have any of those dirty factory jobs at all. High tech jobs and financial "industry" jobs were better and they would create service jobs for everybody else. Union workers became Reagan Democrats, Republican car dealers that suffered under the tight money policies of the Fed during the Carter years were happy as clams with Reaganomics. Everybody was putting their retirement into the stock market, they didn’t need that stinking socialist security.

The end result is an economy so hollowed out that it could collapse entirely at anytime. Things are so bad that even Toyota has contemplated the possibility of abandoning its North American operations. Reagan Democrats are living under bridges and Republican car dealers are finding that their multi-million dollar car dealerships aren’t worth a much as a bucket of warm spit. As American as Chinese apple pie.