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CARROLL: So much for principle

By Vincent Carroll, Rocky Mountain News (Contact)

Published November 14, 2008 at 12:05 a.m.

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Thomas Donohue, president of the U.S. Chamber of Commerce

Photo by U.S. CHAMBER OF COMMERCE

Thomas Donohue, president of the U.S. Chamber of Commerce

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The "core mission" of the U.S. Chamber of Commerce "is to fight for business and free enterprise." It is also "to advance human progress through an economic, political and social system based on individual freedom, incentive, initiative, opportunity and responsibility."

These stirring words appear on the chamber's Web site. Sounds like a political philosophy, doesn't it?

"Don't tell me about philosophy," declared Thomas Donohue, president of the national chamber, during a visit to Denver this week. "If we let this thing go under, we are looking at millions and millions of unemployed people."

Donohue was explaining to his Denver audience why the chamber is so gung-ho about flushing tens of billions of federal dollars into the U.S. auto industry rather than fight, say, for free enterprise. Maybe it's time the chamber revised its mission statement so that it is more in line with its apparent role as a mere favor-seeking lobbyist.

Does Donohue believe that a federal bailout can actually stanch the hemorrhaging of cash and jobs at General Motors given the nature of that automaker's crisis? Does anyone think that a single injection of taxpayer money will suffice, or that Congress will impose sufficient conditions to turn that automaker around? According to Paul Ingrassia, a former Detroit bureau chief with The Wall Street Journal, necessary conditions include "tearing up existing contracts with unions, dealers and suppliers, closing some operations and selling others and downsizing the company."

How unlikely. The single requirement that congressional leaders and President-elect Barack Obama seem most interested in imposing - besides compensation limits for top executives - is that the automakers produce more fuel-efficient cars!

If GM and Ford are "too big to fail" then the government's share in them will probably grow and grow until taxpayers effectively own them.

Yet as Daniel Howes, business columnist with The Detroit News, reminds us, "The simple, uncomfortable fact is the auto industry in America that has prospered, grown, built plants and created jobs across the country is foreign-owned - Japanese, Korean and German. It has employed American workers operating in American plants which, until very recently, were routinely profitable. And those companies claimed more market share each month as Detroit surrendered more."

Now that, Mr. Donohue, is how free markets work.

Surely he remembers free markets. They're at the core of that "philosophy" he doesn't want to talk about any more.

The front end

Three times in the past two years business leaders have risen up to defeat what they considered threats to economic freedom and prosperity in this state.

The first occurred in the spring of last year, when they pressured the governor into a veto of House Bill 1072, which would have repealed part of the Colorado Labor Peace Act.

The second and third examples occurred in the recent election. In a controversial move to get several union-backed measures off the ballot, some business leaders agreed to help finance a campaign to defeat three other ballot amendments. Meanwhile, the energy industry pumped millions of dollars into a campaign that crushed Amendment 58 - which would have hiked oil and gas severance taxes.

When their interests are directly threatened, in other words, industries readily jump into the political fray to defend themselves. Meanwhile, ironically, political candidates who are interested in promoting economic activity in this state rather than merely taxing and regulating it are now routinely outspent when they run for the legislature.

Just imagine what effect business people could have if they chose to spend more of their money on the front end of the political process instead of waiting until the next grenade is lobbed into their tent.

Reach Vincent Carroll at carrollv@RockyMountainNews.com.

Comments

  • November 14, 2008

    5:09 a.m.

    Suggest removal

    mrfxx writes:

    Yes - let's have pity party for the folks in business who have put the US (and by extension the world) into the economic mess we are facing by both hiring illegals and offshoring decent paying jobs. I am fed up with the constant US business lie that "protectionism is bad" when virtually every other country indulges in some form of protectionism of its legal workforce - from mandating that one working as a contractor must be a resident (Canada) to at least 51% citizen ownership of companies (Mexico) to manipulation of currency (Japan and China) to import taxes that make nationally made products cheaper (pick a country). The US is in big trouble when it is easier to get into Harvard (1 applicant out of 7) than to get a retail job (and today it is not to make extra money for holiday spending, it is to pay basic bills like rent and utilities because jobs are gone) at Christmas (1 applicant out of 10 - or MORE)! NAFTA has proven to be a disaster for not only the US workforce but for Canadian and Mexican workers as well (in point of fact, Mexico's unemployment rate has soared since NAFTA - as businesses found even cheaper places to get labor). I guess as long as upper management can award itself multimillion dollar raises and bonuses (on the way to declaring bankruptcy in the case of Lehman) the country is in good shape - RIGHT?

  • November 14, 2008

    7 a.m.

    Suggest removal

    Mike_In_Hartsel writes:

    Nice rant there, mrfxx, but what is your solution? You've shown any fool can run off at the mouth but you don't propose any solutions. Hot air?

  • November 14, 2008

    7:12 a.m.

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    Miseslover writes:

    mrfxx--
    Seriously? Because everyone else does it, we should too? Seriously?
    I love how we scream and cry and rail against business interests when times turn sour--because of government manipulation of interest rates and loose monetary policy, but we all loved living the prosperous life that was based on a lie propped up by loose monetary policy and artificial interest rates.
    The business interests are why there are jobs and wealth in the first place. We love 'em when we benefit, we hate 'em when we don't. Greed is bad when it's the other guy, greed is good (thank you Gordon Gecko) when it's us.

  • November 14, 2008

    8:43 a.m.

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    bxwatso writes:

    It's true that GM is insolvent and is destined to fail sometime soon, but even my free market principles are challenged here.

    We are in the midst of a terrible financial and economic situation, and letting GM fail now is impossibly bad timing.

    Normally, the many suppliers to GM would find other work, and the brand and design assets of GM would be bought by someone like Ichan or Kerkorian (or possibly its assets would be transferred to the ownership of its pension plans). People would still make GM cars, but without the unsustainable burden of militant unions, pensions and health programs.

    Without financial markets to allow this process (the current reality), GM would likely cease to exist in any form, destroying hundreds of billions in assets, and throwing hundreds of thousands out of work. That scenario is nearly unthinkable right now.

    What a mess, but I wouldn't let my principles ruin the entire country.

  • November 14, 2008

    10:02 a.m.

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    Michael writes:

    I just do not buy the argument that the automakers are putting forward that Chapter 11 will not work for them. It works for the airlines, it works for other industries as well. It would allow them (FORCE THEM!!) to revisit all their assets, facilities, contracts, and what they want to be without fear of being shut down because of their cash crunch. They are too big, they make too many models (that many do not want to buy!), they have bloated contracts with unions, suppliers, and their dealerships based on a business model that is outdated and obsolete. They need to restructure into smaller, leaner, tougher companies that make what the market wants and move ahead from there. They cannot be allowed to remain what they are - that has failed and will fail again.

  • November 14, 2008

    11:54 a.m.

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    jay writes:

    i just don't know what sensible alternatives are available to us.

  • November 14, 2008

    12:01 p.m.

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    Michael writes:

    Slayer - The conditions you demand are NEVER asked for and would never be agreed to - by the unions or the auto companies. Look at the recent financial market bailout. Execs will still get bonuses and that is listed under the cost of doing business. Elected officials will NEVER hold the automakers and the unions feet to the fire on this stuff - if they ever want more campaign contributions!! Chapter 11 will do that automatically.
    You are correct about the airlines after 9.11 and here comes the big BUT - most every airline also went into Chapter 11 to reorganize and shed themselves of the crippling contracts that had been negotiated in better times. Without Chapter 11, there is no motivation to make the manufacturers and the unions renegotiate their deals. It will be business as usual. The current US auto industry has too much capacity, too high legacy costs from contracts negotiated in the 50s and 60s and 70s when there was no competition, a bloated and obsolete dealership system, and they are located in states with high taxes, over regulation, and way too much union control.

  • November 14, 2008

    12:40 p.m.

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    TC writes:

    Damn Vince. I completely agreed with you twice this week.

  • November 14, 2008

    2:06 p.m.

    Suggest removal

    Darwin writes:

    Mike_In_Hartsel writes: "Nice rant there, mrfxx, but what is your solution? You've shown any fool can run off at the mouth but you don't propose any solutions. Hot air?"

    Pot calling the kettle black? mrfxx defined some of the problems as he sees them (agree with his analysis or not). The problem with the government (and many people) is that they try to solve a problem without first defining what needs to be solved. As a result, the government just throws money at it. While I often agree with your comments, I believe it is beneath you to name call as you neither defined the problem nor offered a solution. For my part, I admit that the problem(s) and solution(s) are above my pay grade.

  • November 14, 2008

    10:34 p.m.

    Suggest removal

    mtnrunner2 writes:

    >"Don't tell me about philosophy," declared Thomas Donohue, president of the national chamber

    Silly me, for thinking that bad economic policy in past decades is the same as bad economic policy in this decade. That's called thinking in principles, and basically that's what philosophy is, thinking in principles and applying it to the wider issues of life. Otherwise you are destined to repeat your mistakes and not repeat your successes.

    And that's exactly what anti-intellectual business leaders do. They unwittingly shoot themselves, and us, in the foot because they have no clue what they are doing from one year to the next. They need to actually advocate freedom and do it *consistently, on principle*. If they, and our government, had done that to begin with we wouldn't be in this mess. And the answer now is the same: abstain from messing with the economy.

    http://www.aynrand.org/site/PageServe...

  • November 14, 2008

    11:36 p.m.

    Suggest removal

    jacka writes:

    Chambers across the board appear to be corrupted by the easy decision - usually this involves the lack of any core principles.

    When you have no principles, you lack value and thus any power to pursuade.

    Auto industry = corrupt corporate and union bosses attempting to entice political bosses to part with our (peoples) money in exchange for short term solutions ++ political support.

    The people lose here, thanks Chambers!

  • November 14, 2008

    11:39 p.m.

    Suggest removal

    jrhino writes:

    The chamber support of Illegal alien workers shows the sincerity of their concern for the American worker. Here in Colorado they are the number 1 lobbyist (Colorado Competitive Council) to fight efforts to reduce workplace hiring of illegal aliens.

    Boycott member businesses.

  • November 16, 2008

    8:16 a.m.

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    rdamurphy writes:

    GM is spending $4Billion a year on pensions and healthcare - for people who don't even work for GM! Want to look for the primary suspect in the demise of General Motors? The murder weapon has UAW's fingerprints all over it...