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Last Updated: Dec 12, 2008 - 4:54:39 PM |
Of the $700 billion dollars in the US Government bailout bucket that is, at this moment, being yanked around by some of the most powerful men in America, more than a third of that money was already spent by the end of last week. Many believe that this amount has already been misspent.
In an effort to get my mind around all of this, who’s begging, why they believe they deserve it, why others believe they don’t, and uncover as many facts as I can dig up from my little spot here in Iowa, I’ve immersed myself in the chaotic panic of a sea of drowning men and women and their opinions. I’ve searched out television news shows, radio talk shows, web news, blogs and sites. On Sunday morning I listened to the ever-wise Ben Stein roll out his droll take on the situation.
In what started out sounding like an argument against bailing out the Big Three in the auto industry, GM, Ford and Chrysler, who certainly have earned no more right to a clean slate than any of us, Stein made his case by first acknowledging that this is truly a bitter pill, saying, “Now there are plenty of good reasons to say no. After all, the Big Three have made every mistake in the book: far too lush employee contracts, poorly designed and poorly built cars that often burn too much gasoline. Meanwhile, the Asian and German automakers with plants in the southern US do a far better job at making cars people want to drive.”
Mr. Stein then upended the argument as being a necessary pill to swallow and ended with a plea to President Bush to do something now, while he is still in office, saying, “But this economy is in enough trouble already. With our hearts in our mouths, we beg you, Mr. Bush, save Detroit now before it's too late for them, and too late for us.” In the end Mr. Stein makes some very good points. The same points I was seeing and hearing over and over again as I watched and listened to people discuss the issue. You can see Stein’s article at http://www.cbsnews.com/stories/2008/11/16/sunday/main4607773.shtml
I thought I’d made my mind up with so many arguments to just swallow the bitter pill for the sake of the innocent and for the sake of our country. I then heard three different man-on-the-street type opinions to the contrary and saw one clever comparison chart that sat somewhere in between, which threw me back into contemplation.
“It needs to happen. There are corrective measures that need to happen for this thing to straighten itself out,” said one gentleman who believes that the only way this will ever end and our country’s economy and integrity be restored, is by allowing the auto industry to fall in on itself and a natural rebuilding of the industry or industries to take place.
“What ever you do, take a look at the wages of those workers who are greatly responsible for pushing up the production costs of American made vehicles, the so-called innocent victims,” said another gentleman.
A woman I spoke with pointed out that even in nature, imbalances naturally correct themselves in ways that first look like devastation to us. She also had the opinion that the fall of one or even two auto manufacturers, while initially devastating, would certainly open the doors for quick thinking and enterprising Americans who would fill in where the missing manufacturer had left off. She pointed out that, while it was true that the people who owned these cars would still need parts and repairs and at first wouldn’t know where to look, it is also very probable that the void would spawn endless opportunities for new companies to fill that need. Her words began to form a certain order to the plethora of information that I was accumulating.
Still I looked online and tried typing in the words, ‘auto industry wage comparison’. An interesting site on a blog called CARPE DIEM, which mentioned professors’ pay in comparison to the average auto industry worker showed up on that particular day about third in the list and I checked it out.
The blog’s author was a Dr. Mark J. Perry, a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Mr. Perry’s blog begins with a simple chart and a title. The chart is a wage comparison showing the hourly labor costs and benefits for hourly workers in 2006.
The hourly income information, which he says came from Forbes, shows average hourly wages and benefits for employees at Ford, $70.51 (141,020 per year), at GM, $73.26 (146,520 per year), at Chrysler, $75.86 ($151,720 per year), and at Toyota, Honda and Nissan (in the US) $48.00 ($96,000 per year). Mr. Perry’s last bar on the chart represents a figure that shows (according to the American Association of University Professors and the Institute of Educational Sciences) that the average annual compensation for a college professor in 2006 was $92,973 (average salary nationally of $73,207 + 27 percent benefits).
With Mr. Perry’s permission, I have included the chart.
Mr. Perry pointed out that industry analysts say the Big Three need to “be ‘transformational’ in reducing pension and health care costs.” He poses this question. “What would ‘transformational’ mean? One way to think about: ‘transformational’ would mean that UAW workers, most with a high school degree, would have to accept compensation equal to that of the average university professor with a Ph.D.”
From there the comments poured in, as you can imagine, from every corner of cyberspace. I’d have to say Mr. Perry has made as good a point and as strong an impact on me during my search for the rightful owner of the bailout bucket as Mr. Stein did with his common sense appeal. On the other hand, I can really relate with the idea of corrective measures and new enterprise.
I welcome any comments or ideas from readers on this subject as I continue to ponder the rights, the wrongs and the consequences of the Big Three and the bailout bucket.
The opinions expressed are those of the author and not necessarily those of the East Iowa Herald.
© Copyright 2008 by The East Iowa Herald
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