Tuesday, December 30, 2008

Toyota Republicans

This piece is ripe with American nationalism, but it does offer some critical information on the "Toyota Republicans", some of the underlying struggles behind the bailout initiative for the Big 3, and the question of who owns the US South.

Toyota Republicans Should Cut Their Own Pay

By Leo Gerard

December 22nd, 2008

Campaign for America's Future


President Bush took to the TV Friday to announce that
he wouldn't walk past the financial crash of America's
Big Three automakers and do nothing to save their

Refusing resuscitation, Bush said, would be
irresponsible during the worst economic crisis since
the Great Depression.

A week earlier, 31 GOP Senators, mostly from Southern
states, voted to avert their eyes and allow American
auto companies to die. They opposed $14 billion in
federal loans for GM and Chrysler, revealing that their
loyalty lies not with America, not even with their own
states, but with South Korea and Germany and Japan.

They are Toyota Republicans.

Toyota has non-union manufacturing plants in Alabama,
Kentucky, Mississippi and Texas -- states whose senators
led the GOP quest to slay the Big Three American auto
manufacturers -- Richard Shelby, R-Ala.; Mitch
McConnell, R-Ky, and John Cornyn, R-Tx. Here's the
Republican from Mississippi, Sen. Thad Cochran,
explaining why he'd vote against the loans, "Things
have changed. It's not just the Big Three anymore," he
said, pointing out that Nissan and Toyota employ more
Mississippians than General Motors, Ford and Chrysler.
But, he said, the foreign companies would not share "in
the benefits of that automobile bailout program."

No. But Mississippi did give Nissan and Toyota more
than $650 million to entice them to locate in the
state. GM, Ford and Chrysler didn't share in those
benefits, Sen. Cochran.

The Toyota Republicans are all for helping the rich
with tax breaks and shelters, and they're all for
aiding foreign auto manufacturers with billions worth
of tax forgiveness and government-paid infrastructure

But their disdain for the working class couldn't be
clearer as they organized defeat of loans to the Big
Three under this command: "Republicans should stand
firm and take their first shot against organized

They haven't gotten the message sent out by the
electorate in November. Voters rejected politicians
prolonging the same old policy of protecting themselves
and the rich. The nation's voters want selfless leaders
who will perform in the best interests of the entire
country. They want change.

Clearly the allegiance of the 31 Republicans who
opposed the loan to save GM and Chrysler is not with
the United States of America, which would lose 900,000
jobs if just GM closed, and more than 2.1 million if
the Big Three did. Those job losses would occur during
the worst economic downturn since the Great Depression.
In November, the 11th consecutive month of job losses,
another 533,000 people were thrown out of work,
swelling the pool of unemployed to 10.3 million. The
Toyota Republicans were willing to increase that.

They voted against the interests of their own states as
well. Consider what would happen in a few of those
Southern States whose senators led the charge against
preserving the Big Three. If just GM collapsed,
Kentucky would lose 20,000 jobs; Alabama, 21,000;
Georgia, 23,000, and Tennessee, 29,400, according to
calculations by the Economic Policy Institute.

Sen. Cochran just didn't think it was right for the
U.S. government to aid its auto industry. But
apparently he's fine with foreign governments providing
subsidies to the transplant automakers in his state.
And, apparently, he's okay with spending state and
federal money to help foreign automakers locate
manufacturing plants in the U.S.

Korean and Japanese automakers -- including Nissan and
Toyota with plants in Cochran's Mississippi -- benefit
from manipulation of currencies by their governments, a
factor that, according to EPI estimates, reduces their
costs by between 10 and 20 percent. In addition,
nationalized health care in countries such as Japan and
Germany serves as a subsidy.

Also, the Toyota Republican opposed federal money for
American companies but supported state and federal
money for foreign auto makers estimated at $3.6

Shelby, for example, got $3 million in federal funds to
improve roads near the Hyundai plant in Alabama after
the state gave $250 million to the Korean automaker.

Shelby opposed loaning one federal cent to the U.S.
automakers, though, telling "Face the Nation" that they
should die: "Companies fail every day and others take
their place... There's not a bank in this country that
would loan a dollar to these companies."

But for foreign auto companies, his home state of
Alabama couldn't provide enough taxpayer cash -- more
than three quarters of a billion. In addition to the
quarter billion it gave the Korean automaker, it handed
another quarter billion to German Daimler for a
Mercedes-Benz plant, nearly a quarter billion to
Japanese Honda and $29 million to Japanese Toyota.

Similarly, Jim DeMint, another senator who led the
Toyota Repubicans' rebellion against the loans to GM
and Chrysler, told the "National Review" recently,
"Government should not be in the auto industry." Yet,
his state, South Carolina, got into the auto industry
with nearly a quarter billion -- $230 million -- in gifts
to a German auto company -- BMW.

The same is true in Kentucky, home of Sen. Mitch
McConnell, who said of loans for the Big Three,
"Government help is not the only option. It's not even
the best option." But government help was fine when
Kentucky was providing grants for Toyota, which got
$371 million from taxpayers since 1986.

It's clear that the real problem was not a
philosophical one. All of these lawmakers were willing
to flick free market capitalism out the car window like
a cigarette butt if their states could use taxpayer
dollars to buy a foreign auto plant. No, what really
gags them about the Big Three is that they pay good,
middle class wages and benefits as a result of
contracts with the United Autoworkers.

Repeatedly, the Toyota Republicans insisted that UAW
members bear the brunt of the cost of the bailout. The
senators insisted that UAW wages be lowered to match
those of non-union auto workers at foreign-owned
manufacturers. Toyota Republican Sen. Bob Corker of
Tennessee, wrote an amendment to the bailout bill that
would have required UAW members to accept pay cuts by a
specific date in 2009. When Republicans defeated the
bailout, DeMint blamed that on the union, saying, "It
sounds like the UAW blew up the deal."

The Toyota Republicans then conferred the American auto
industry to bankruptcy. They said they favored
bankruptcy because it would enable the Big Three to
break pledges made in labor contracts and promises for
health care and pensions made to retirees. The Toyota
Republicans want the wages of American workers pulled
down. To them, UAW members making an average of $28 an
hour, accounting for less than 10 percent of the cost
of a car, are earning just too much money.

The Toyota Republicans did not, however, make that
claim about the white collar workers on Wall Street who
got this country into the financial fiasco that led to
the dire circumstances for automakers. And not just for
American ones. Domestic car sales declined by 40
percent last month, but Asian producers' sales dropped
too -- by 35 percent.

The average salary of white collar, Wall Street
employees -- workers in "securities, commodity contracts
and investments" -- is four times that of those laboring
in the rest of the economy. Remember, these are the
guys who are so smart that they took down Bear Stearns,
Fannie Mae, Freddie Mac, Washington Mutual, AIG and
Lehman Brothers - in less than a year -- and ultimately
required $700 billion from taxpayers to bail them out.

The top executives of Wall Street banks receive
billions of dollars in year-end bonuses. The New York
Times detailed those at Merrill Lynch in a story Dec.
17 entitled "On Wall Street, Bonuses, Not Profits Were
Real." In 2006, the firm gave its top executives
between $5 billion and $6 billion in bonuses, which
means, for example, a trader earning $180,000 a year
got a $5 million bonus.

Merrill's $7.6 billion earnings that year turned out to
be bogus. The company's losses now have exceeded all of
the profits it earned over the previous 20 years. To
prevent collapse, it sold itself to Bank of America in
September. But then, Bank of America took $15 billion
of that $700 billion in bailout money. Despite the gift
of taxpayer dollars, the CEO of Bank of American has
not publicly announced that he will decline a bonus,
and Bank of America plans to tell Merrill Lynch workers
the amounts of their bonuses beginning Friday, the New
York Times reported Thursday.

When those Toyota Republicans voted in favor of
providing $700 billion for Wall Street -- including both
of Tennessee's senators, Bob Corker and Lamar
Alexander; Kentucky's Mitch McConnell; Georgia's Saxby
Chambliss and Johnny Isakson; South Carolina's Lindsey
Graham, and Texas' Kay Bailey Hutchinson and John
Cornyn -- none asked for high-paid white collar workers
to take pay cuts or give up their million dollar
bonuses. There was a feeble attempt to limit the pay of
chief executives, but that applied only to firms that
received federal money under one particular method, and
the treasury decided not to hand out the $700 billion
that way.

And no lawmaker asked white collar workers or
executives who got billions in bonuses based on false
profits to return them.

But those Toyota Republicans want middle class, blue
collar workers who don't get year end bonuses, who
don't celebrate with five-figure dinners, to take wage
cuts. They want autoworker pensioners to lose the
monthly benefits they earned with a lifetime of labor.

And at no time did those Toyota Republicans suggest
that they should cut their own salary or top-notch,
government-paid health benefits or pensions. Like the
reckless speculators on Wall Street, Congress bears
responsibility for the crisis condition of the American
economy because it deregulated financial markets.

In 2002, during a downturn in Japan, the House of
Councillors reduced the pay of Diet lawmakers by 10
percent, and ended the transportation allowance,
portrait-painting and pension given senior lawmakers.

If the Toyota Republicans believe the Japanese way of
pay is so great for autoworkers, they should first
impose it on themselves.

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