Should We be Bailing Out the Car Industry?

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Permalink Reply by Murat on January 13, 2009 at 10:35pm

Don't let them go bankrupt at this point. Why? Because the US lacks a central trade policy and as a result States compete with one and other to attract companies by reducing wages and giving away tax payers' money. That's why we have Japanese car factories in the south where people make $18/h vs $35/h in Detroit. I hear people cry out "Let those Union workers drop their wages." And why would a country want their citizens to make less money? Are we stupid? Who are we competing with? Indians, Chinese? That is a race to the bottom. Today it would be the auto workers, tomorrow the engineers. What we need is a central policy that regulates wages and ensures competitive salaries and working conditions for nationally strategic industries. Don't let the Japanese set up cheap factories in the South. Tell them that they have to pay the same wages and allow Unions to come in. That way Detroit can compete with them with an equal footing. They may still not be competitive, but it won't be because of wages.