My noir instinct is that American business doesn't care that GM is bankrupt, because the "new GM" will have shed most of its workers and its obligations to the ones that are left, including its retirees. Somehow, a union trust fund tied to a company that couldn't pay retiree health care is supposed to pay retiree health care. The deal has been changed for hundreds of thousands of former GM employees who were told everything would be fine if they shut up and did their job. No workplace democracy, but a very nice retirement package . . And now look. That's what you get for playing by the rules. Bailouts for bondholders, but no bailouts for retired lineworkers.
The only interesting moment in the GM coverage was when auto analyst Maryann Keller, speaking on To the Point, said that GM had been going out of business for 40 years, and LA Times auto columnist Dan Niel dated GM's decline to 1980s CEO Roger Smith - gosh he was bad. It reminded me of Michael Moore's first feature film "Roger and Me," in which the target of the exposé was the same Roger Smith. The destruction of Michigan through delocalization of facotries was clearly documented in that film, as was the whole executive class's incapacity to grasp reality and do something intelligent.
The film came out in 1989. Here we are exactly 20 years later. What if economists had actually taken Michael Moore seriously? Well, never mind - they might have started their calls to strip pensioners of their health coverage that much earlier.
In the NYT Magazine today, Roger Lowenstein makes the radical proposal to democratize corporate boards. He offers a nice short description of how completely self-dealing and insulated boards often are, with the crap results that are all to obvious.
It's a good reminder at least that there's little democratic about American business, and that democracy and American business are not friends.
The field of economics has long avoided all such considerations, but in the wake of its embarrassment during the current crisis - which it both failed to predict and actively created - is trying some internal self-reform. Thus NYT business columnist Joe Nocera has dug up a guy - a business "columnist" for "Time," and writes,
As Mr. Grantham sees it, if professional investors had been willing to acknowledge these aberrations — and trade on the fact that the market was out of whack — they should have been able to beat the market. But thanks to the efficient market hypothesis, no one was willing to call a bubble a bubble — because, after all, stock prices were rational.Gong. Way too little, way too late. LOTS of people saying this when it mattered - everyone from the mainstream Dean Baker to analysts of the deep historical cycles of capitalism like Giovanni Arrighi. And it doesn't seem to be making much difference in Econland, where Nocera concludes that the bubble really came from people wanting to believe it was different this time, and Burton Malkiel, the popularizer of the Efficient Market Hypothesis, announces the necessity of his own blindness towards bubbles.
There's a double standard at work here. Prominent economists who were dead wrong on their economics and cost ordinary people much or most of their retirements, for example, are still prominent, and allowed to excuse themselves in the pages of the NYT. Obscure economists, sociologists, professors of ethnic and womens' and American studies who were right remain, well, obscure. Dean Baker is a partial exception, and that's about it. Obama is insuring that the mainstream of the past stays mainstream in the present, but this will insure that a familiar dumbness stays front and center in setting the limits of economic policy.
Writing from Beirut, Rami Khouri has a good op-ed in the NYT that compliments Obama's mountaintop speech in Cairo on how there are so many good Muslims in America and the world, but points out that "An absolute commitment to equal rights and justice as the No. 1 issue would have been smoother." Smoother, only if Obama's goal were to replace force with negotiation and US preeminence with egalitarian multilateralism. But Obama does not favor international equality in nuclear programs or anything else. The main effect will be the continuation of double standards (to say nothing of inequality): nukes for us but not for you, massive bailouts for us but not for you, occupation by us but not by you . . .
Khouri is very generous and says, "He sought a new beginning, though, which we all badly need." I don't agree that this is what Obama seeks. It's more likely that he seeks a more balanced and therefore more effective extension of American power. Khouri gets this right in the first part of a sentence that winds up in the place of friendly diplomacy: "The fact that almost every fine principle articulated by Mr. Obama was contradicted by harsh U.S. policies throughout the region should not detract from the potential power of the ideas in his speech."
The continuing effect of that inequality -- the inequality enforced by US preeminence -- will be double standards, and double standards are a form of elementary injustice that drives everyone nuts and makes peace impossible.
Which reminds me of the summer of 68. Some people were protesting in Paris, Prague, New York, San Francisco, or leading lives of drug-enhanced artistic expression. My brother and I were packed off by our parents to our aunt and uncle's house outside of Plymouth, Michigan.
They showed us a great time, piling us into their 1967 Buick Electra 225 and bouncing up and down over the expansion joints of most of Michigan's highways to the lakes, the sand dunes, the cities and towns, and Niagara Falls. To me, growing up in Los Angeles, the woods looked like a jungle, and the leaves were so luminously green they looked like they were made out of stained glass. My cousin Harry - then in his 20s - worked as a mechanic at the local Buick dealership, and there were always 2 Buicks in the yard, always two years apart in age, the 1965 being set to get replaced in the fall. My aunt and uncle were retired apple farmers, and lived in the 2 story farmhouse that was surrounded by brick subdivisions of the houses of people that had moved to work there for jobs. There was a lot of election news - Bobby Kennedy had been killed, and Martin had been killed, and George Wallace was doing well, and Nixon and Humphrey were holding their conventions. Aunt Margaret found me in front of the TV one day watching Wallace give a speech, slapped the TV off and shoved me out the front screen door - I stayed outside the rest of the summer. Aunt Pat and Uncle Russ came through on their way to Botswana for the Peace Corps -- Plymouth Michigan was kind of a hub. There were the suburbs, but also the green flames of the trees, and the empty roads where the Electra rolled like a magic carpet.
That world is gone. Not so much improved - as it needed to be - as just gone.