Right now, we face the most devastating economic collapse since the Great Depression. We need massive government spending to help rebuild demand. But we also need to think long-term, about how that spending now can best ensure a future capacity to pay back the cost of this spending over time. Compared to the $700 Wall Street bailout-half of which is already gone, the auto industry loan is a pittance. Letting the auto industry go under would obviously be devastating even if we weren't in the midst of an economic crisis. The ripple effects would put millions of people out of work. The problem is, the auto industry has been a big contributor to our nation's problems, fighting doggedly against consumer and environmentally-responsible measures every step of the way. The cost of keeping the industry afloat has to be an end to such obstructionism. And not just an end to that obstruction, but a positive re-orientation toward becoming a big part of the solution.
Repurposing The Auto Industry To Help Solve Multiple Long-Term Problems
The easiest way to do this would be two-fold. First, some form of nationalization, but not one that would centralize power in a Washington-run bureaucracy. We need some form of modern variant on what the UAW proposed just after WWII, as Harold Meyerson wrote about long ago-expanding the auto-maker's boards to include all stakeholders: workers, consumers, representatives of communities where factories are located, etc. Second would be a different sort of corporate charter. For-profit companies generally have a corporate charter solely conceived in terms of making money. The end result of this is that all other concerns fall by the wayside.
However, this does not have to be. Originally, corporations were chartered for specific purposes, and usually only for a specific period of time: a corporation would be formed to build a bridge, for example. Even today, non-profits---which play a significant role in our economy-are chartered for a specific beneficial purpose. They can make money, so long as it is reinvested to serve that purpose, and no money goes into any shareholder's pocket But what guides them is there reason for being-to run a museum, feed the hungry, do medical research, whatever.
There is no reason we can't combine these models, and create a corporate charter defining a public purpose for being which will have legal force in guiding the corporation, and yet provide for it being able to realize a profit as well. This way, a transportation corporation could have built into its charter that it work to reduce environmental impacts-and even produce environmental benefits that more than offset the negative environmental impacts it produces. By making this internal to the corporate structure, we could turn it from being a constant special interest obstacle to other socially important goals into making it an ally instead.
This same concept could be a requirement for every corporation that receives bailout funding. The point is not to micro-manage. Quite the contrary, it's to provide corporations with the institutional equivalent of a conscience, if not quite a soul, which would encourage them to pour their creativity and initiative into public policy advocacy benefiting others as well as themselves. If would be a way of turning them into pro-social entities, rather than anti-social, or at best asocial ones.
Okay, but towards what end(s)?
Here is an initial set of suggestions:
(1) Diversify from auto-making into a full spectrum of transportation manufacture. Instead of competing against mass transit, for example, the companies would work to build the optimal mix of individual and mass transit, including a full spectrum mix of options that could be configured into multi-modal transportation systems, combining autos, bicycles, buses, trains, etc.
(2) Build-in long-term strategies for increased efficiency and transition to renewable energy as part of the corporate charter.
(3) Further expand the chartered purpose to include clean, renewable energy infrastructure-such as manufacturing wind turbines, solar heating systems, etc.
(4) Include the option of more general purpose infrastructure retrofitting to increase energy efficiency at any level of scale, from single-family dwellings to comprehensive infrastructure redesign and replacement for an entire metropolitan area.
In short, the repurposing of the auto industry should be an integral part of solving our long-term energy needs, curtailing global warming, and reducing a broader range of negative environmental/health impacts that cost us tens, if not hundreds of billions of dollars per year. By combining all these problems and solutions into one integrated package, we can get much, much more bang for the buck.
The point here would not be to prevent other participants in solving these other problems. But it would be to get a running start in the quickest period of time, and to set new standards for how this can be done by internalizing social values into all manner of for-profit corporations.
National Health Care
In addition to all the above, there is an obvious need to lift onerous costs that never should have been part of manufacturing in the first place. The biggest of these is clearly health care, which should be transferred to the federal government.
As Gregg Shotwell said on Democracy Now! this past Friday:
[W]e need to advocate for a national industrial policy that supports and sustains the expansion, rather than the destruction, of the middle class. And I would advocate for a policy that strengthens our economy, our national security, and makes the dream of a higher standard of living attainable for a wider number of citizens. You know, the working class is the backbone of this nation. And I think that we need to strengthen the American worker.
I would like to see, first and foremost, that we have national healthcare, because this is the one solution that would help everyone. It would help the employers. It would help the employees. It would help the consumers. And that is the biggest factor that takes away our competitiveness. That's the one factor that would level the playing field, because all of our competitors have national healthcare and stronger pension systems in their country-and by "pension," I mean government pension-so that when Toyota, you know, imports all these cars, they're not paying for healthcare, they're not paying for the pensions on those employees that are working overseas.
In the end, we need to establish a single-payer system. It is simply far more efficient than any alternative, both on the micro-level, with enormous reductions in overhead costs, and the macro-level, as it switches incentives away from wasteful and costly forms of medical spending that produce relatively marginal improvements in health outcomes at highly inflated costs. Paradoxically, the best way for us to reign in Medicare costs over time is to spend more money through Medicare and reduce the private system inflation rates that end up driving up Medicare costs as well.
A Third Reconstruction/A New Social Contract
Finally, we need to break the larger cycle of destructive anti-social political/economic practices exhibited by the lawmakers who tried to use the auto industry crisis to break the UAW. What's needed here is a sweeping modernization program that can once and for all end the economic backwardness of the South, and change incentive structures so that it stops trying to get ahead by pulling the rest of the country down. This was discussed by Michael Lind in his Salon article I quoted from and linked to in my earlier diary, "The New Civil War--Could The Attack On The Auto Industry Really Be This Simple?".
The alternative to the Southernization of the U.S. is the Americanization of the South -- a process that was not completed by Reconstruction and the New Deal and the Civil Rights era, which can be thought of as the Second Reconstruction. The non-Southern states, through their representatives in Congress and the executive branch, and with the help of enlightened Southerners, need to use the power of the federal government to put a stop to the Southern conservative race-to-the-bottom strategy once and for all.
Call it the Third Reconstruction. The first step is to end the race to the bottom in wages and regulation, by national action. The national minimum wage should be gradually raised until it is a living wage, of $10 to $12 an hour, and it should be adjusted for inflation. At the same time, federal regulations should set a higher floor with respect to worker safety regulations, environmental regulations, and others, preventing America's own internal rogue states from gaining any advantages by flouting national standards. Most Southern politicians and business leaders will howl that this will bankrupt the South. That's what they said about the abolition of slavery, child labor, and the convict lease system, too. The South was a better place to live after those reforms, and it will be a better place to live when there is a living wage throughout the South
This is not the end of what is needed. But it is a big enough piece to underscore that it will be far more effective to solve multiple problems with an integrated approach than it would be to address them separately in a patchwork fashion. And that is what we need to start doing: Dream big. Act big. Be big.
When it comes to solving America's problems, why mess around?