What’s wrong with this picture?
The GM deal has left a lot of us scratching our heads in wonder at the power of the auto industry to garner billions in government support while the rest of us are stuck mostly going it alone, mano-a-mano with the recession.
But is it possible that the GM bail-out is a case of real-life experience that has gone so far off the rails that it’s actually nudging us toward an entirely new paradigm?
Capitalism has most certainly driven itself way beyond its own comfort zone. There is no map yet for the road ahead.
At a minimum, that does have its ironic rewards. Stephen Harper (and his new business partner Dalton McGuinty) took the leap well past budget deficit über-spending this week all the way to a major buy-in to state socialism. The new deal is taking the Conservative’s puppy love for public-private partnerships and turning it on its head.
Harper’s preferred P-cubed approach is to privatize as many publicly owned assets as politically possible (fire-sale prices, no problem). He reaffirmed just days ago that his government is going through our entire collective inventory looking for goodies to sell off to the private sector.
Try as he may, however, the big trend is all the other way. The GM deal is the icing on the upside-down cake of the new economy.
Following the lead of the banking sector, it speaks loudly that, through nobody’s choice, the new capitalist paradigm is actually much more about publicizing the private than privatizing the public.
Some new invisible hand seems to be revolutionizing how big business, finance and government operate.
Perhaps it’s true, as famed Latin American writer Eduardo Galeano says with a smile, “we are being programmed by the computers, seen by the television and driven by the cars.”
It’s certain that this macro-trend isn’t the happy place of any ideological persuasion left, right or centre. Rather, the new facts of public and worker ownership are almost equally challenging and odious to all sides.
There is no end of humble pie to be eaten by GM management, of course. And though Barack Obama may have declared his intention to be a hands-off owner, firing GM CEO Rick Wagoner just last month does send a message. Let’s just say the new boss ain’t the same as the old boss. We will all be watching how our car company is managed.
The CAW and UAW aren’t left sitting pretty either. Several issues before them are demanding transformative thinking.
Most obviously, the unions are now sitting on both sides of the table, and the old axiom of the inexorable clash of interests between capital and labour is lying shredded to bits at their feet. Clearly, some introspection is required.
And, yes, a small piece of this whole mess has to do with an adversarial bargaining approach that took Chrysler and GM beyond sustainable spending levels. Only the completely self-righteous could deny that.
Likewise, the fact that it was really the political weight of the union movement that made the request for government auto dollars happen, shows that the workers have a strong self-interest in the well-being of the enterprises that support them.
How will that awareness be directed into new relationships on the shop floor? Union members have a vested interest in pursuing some new answers here. And taxpayers will be justifiably pissed if they don’t.
Finally, a more subtle point about labour and capital has been exposed. The crisis has spotlighted the gigantic pension and benefit funds that are held in union plans.
My question is, how are those funds being invested? Surely it’s time for the unions to take some responsibility for the way these huge amounts of capital are used.
A new, ethical approach would look closely at these powerful pools of capital. Given the taxpayer funding, couldn’t they be invested for socially as well as economically beneficial outcomes so they serve pensioners and Ontario as a whole?
Many of the hedge funds that caused havoc in the financial meltdown were investing pension fund money. So it is that the issues of the new economy are coming full circle, whether we want to see them or not.
What’s right with this GM picture is that the deal — driven by Obama’s administration — has gone ahead.
The costs in EI, welfare and other social assistance would have been devastating, and the larger hit to the economy as a whole and lost tax revenue would likely have been much more costly.
But Obama, Harper and McGuinty were all wrong when they promised they’d get our money out quickly.
Firstly, it is just not going to happen. We need to accept being driven to a new type of business model and try to make it work. This is no time for government to mimic the short-term thinking of the stock market that got us all into this mess.
It’s time for government, taxpayers and workers to realize that patient capital investment aiming for long-term beneficial transformation is the only hope we have that all that money will end up buying real value in the long run.