Don't Let the Democrats' Failure Be the Right Wing's Opportunity

AN UPDATE ALREADY: This post by Michael in Norfolk also sums up the growing disillusion and why something needs to be done quickly by Democrats to stanch it.

The zeitgeist, at least for today, seems to be the growing disillusionment with Democrats in Congress and even with Barack Obama. First, in response to a comment by the very astute Gretchen Laskas on Lowell's Blue Virginia, I posted the following, which Lowell turned into its own diary (with my approval). The money quote:

It makes my blood boil that Democrats are always mopping up after the Republicans back us into a corner and bloody us. Every time we have a good policy or concept, they manage to successfully mount an offensive that so discredits it that we have to scramble to "rebrand" it. And ultimately abandon it for compromise.

The Republicans have just presided over two monumental failures, a failed foreign policy and an economic collapse that is the worst since the Great Depression, and one that was caused by the very same factors that caused that Depression. Yet, nobody has managed to back the GOP into a corner. They are not wringing their hands and talking about rebranding their free market ideas, which are the root cause of the economic disaster we are now in.

Democrats don't need to cower and rebrand constantly. They need to agree on what they stand for, get the messaging right the first time, and stand up unambiguously for what they believe.

(snip)

Oh, and bipartisanship was always DOA. I have been around the block too many times to ever have thought otherwise. When Republicans lose elections, they engage in sustained temper tantrums and can never be counted on to do anything constructive for the common good. They don't even believe in a common good. In fact, they think "the common good" is a communist code word.

After reading their blogs; magazines; and books, and watching and listening them on TV and radio talk shows, what part of that don't Democrats get?

The emphasis, by the way, was Lowell's but I liked it so I decided to leave it.

Meanwhile, when I got home from work, I read this op-ed piece, by Robert Kuttner, in the Washington Post. Kuttner argues that the beneficiaries of the collapse of capitalism and the free market economy have actually been the far right wing and not the liberals.

Incredible as it seems, with everything they believe in - unregulated markets, globalism, and free trade - a proven failure in the real world, it is they who are managing to exploit the real and justifiable anger of the ordinary citizen who has lost his job, his home, and his health insurance.

Kuttner lays the blame on a left that has failed to make its arguments or its case to the public. We have no clear narrative that we all agree on and can present in an understandable way. Even worse, nobody sees a sense of outrage at the privileged classes that not only brought the economy down but are benefiting even now by its collapse.

Here's what Kuttner says.

Wall Street and the abuses of corporate America crashed the economy, leaving regular people anxious and financially insecure. Yet the far right, not the reformist left, is getting the political windfall.

Something is severely off when economically stressed Americans confront members of Congress about "death panels" in the Obama health plan. The rumors, fanned by talk radio with a little help from Republicans, are false and even delusional. Yet the anger, if misdirected, is genuine.

People should be plenty angry about their jobs and their mortgages and their health insurance. With health care, however, virtually all of the fears attributed to the Obama health reform efforts more accurately describe the existing private system.

It is private insurance companies that ration care by deciding what is covered and what is not. Private plans limit which doctor and hospital you can use, define "preexisting conditions" and make insurance unaffordable for tens of millions. For many, all this can cause suffering and sometimes even death. Our one oasis of socialized medicine, Medicare, has the most choice and the least exclusion.

Kuttner also rightly sees that the citizen anger, however misdirected, is a genuine backlash against a broader array of discontents, not the least of which is the way the Obama administration and Congress handled the AIG bailout, including the huge bonuses that went to the very Wall Street vultures who caused the financial meltdown to start with.

After receiving nearly a trillion dollars of taxpayer aid, Wall Street is returning to business as usual. Consider: Firms that received government help, after losing fortunes in 2008, still found money to pay out exorbitant bonuses at public expense.

Far too little of the government's aid to Wall Street is trickling down. Because of the administration's decision to target $75 billion in mortgage-relief aid to banks and mortgage companies rather than to beleaguered homeowners, foreclosures are still increasing far faster than loan modifications.

Despite the premature triumphalism about a trivial drop in the measured unemployment rate in July, more than 25 million Americans are either unemployed, out of the labor force, or working part time when they need a full-time job. No wonder there is widespread pocketbook anger.

Meanwhile, Kuttner lays the blame solidly where I think it belongs.

One is Obama himself. This president recoils from confrontation, even with those who are out to destroy him. He has had ample opportunities to put himself on the side of popular economic grievances and to connect America's economic troubles to the forces that Roosevelt called "economic royalists." But Obama, whose propensity for consensus is hard-wired, keeps passing up those opportunities.

Even now, he won't make clear that the private insurance industry is the problem. Recent administration statements on the "public" insurance option have been classics of mixed messaging. Obama's economic team is far too cozy with Wall Street, fanning populist suspicions.

Despite the president's history as a community organizer, his style as president is to tamp down popular protest, not rev it up. I know of several cases in which the White House requested allied progressive groups to cool it. When government-subsidized AIG disgracefully paid culpable executives "retention bonuses," Obama dispatched Larry Summers to the Sunday talk shows to helpfully explain that "We are a country of law. There are contracts." Tell that to laid-off and outsourced factory workers. It's hardly surprising that regular people resent the corporate-connected Washington of Barack Obama.

Kuttner also blames the "Wall Street dominated economy" for the weakening of the labor movement, which has suffered from the illegal union busting tactics of large corporations. As he points out, organized labor was one of the main forces that protected workers' rights and fought for wage increases and safe working conditions. Since the deliberate weakening of labor, workers' wages have stagnated while corporate executives' pay and perks have soared even when their performance created economic disaster for investors, homeowners, and consumers. People see the palpable unfairness. And they also see Democrats failing to stand up for them or even to fight to keep the promises they made on the campaign trail.

So, when tea baggers, birthers, and assorted crazies come along, yes, they capture and channel the frustration the public is feeling. As Kuttner wisely points out, the thing about economic upheaval and the anger and fear it creates is that it could be an opportunity for liberals to extend concepts of fairness and fight for prosperity for working people or it could be an opportunity for demagogues to tamp down those very things and channel the outrage into darker outcomes. As Kuttner points out.

When economically stressed and frightened people are anxious and sullen, you never know who will capture their fears and hopes. In the 1930s, economic anxiety produced leaders as different as Franklin Roosevelt and Adolf Hitler. History shows that if the reformist left doesn't offer a plausible story and strategy of reform, the lunatic right will gain ground even with an implausible one. So where are the liberal protesters? The initiative has passed to the know-nothing right for two big reasons.

As Robert Kuttner concludes

One way or another, hard times produce popular anger at callous elites. Presidential leadership and progressive organizing energy to connect the mounting outrage to the real economic abuses are overdue. Otherwise, even a ticket of Sarah Palin and Mark Sanford could pick up the pieces.

Coming off of this thoughtful article, I saw Ben's post of Jane Hamsher on MSNBC with Andrea Mitchell. Ben is right, by the way, that Hamsher rocks, so I'll let her have the last word on the Democrats and health care reform.

That Taliban GOP

There is a growing anger in this country, and Republicans are badly miscalculating the public sentiment. In today's Washington Post, House Republicans declare that their party is on the verge of a renaissance, having found their voice and returned to their core values. Here's the quote:

"We're so far ahead of where we thought we'd be at this time," said Rep. Paul D. Ryan (R-Wis.), one of several younger congressmen seeking to lead the party's renewal. "It's not a sign that we're back to where we need to be, but it's a sign that we're beginning to find our voice. We're standing on our core principles, and the core principle that suffered the most in recent years was fiscal conservatism and economic liberty. That was the tallest pole in our tent, and we took an ax to it, but now we're building it back."

The second-ranking House Republican, Rep. Eric Cantor (Va.), put it more bluntly. "What transpired . . . and will give us a shot in the arm going forward is that we are standing up on principle and just saying no," he said.

And you'll never guess whom they're using as a role model. None other than the Taliban. If a Democratic blogger called them the Taliban Party, they'd howl like a stuck pick. Yet, that's exactly whom they are modeling themselves after. Again, the money quote:

...Republicans are relishing the opportunity to make a big statement. Rep. Pete Sessions (R-Tex.) suggested last week that the party is learning from the disruptive tactics of the Taliban, and the GOP these days does have the bravado of an insurgent band that has pulled together after a big defeat to carry off a quick, if not particularly damaging, raid on the powers that be.

There actually is a strategy to this madness. They know the stimulus bill will pass. What they are hoping for is that with enough sabotage to that bill by their so-called moderates, allied with some really dumb Blue Dogs, the bill will fail, and the Democrats will own it. They're ok with sacrificing Olympia Snowe, Susan Collins, and Arlen Spector, who never were true believers and have the wrong accent for the base anyway.

And with the Northeastern moderate GOP troika, aided and abetted by Blue Dogs Ben Nelson and Joe Lieberman, the watered down version of the stimulus bill could sputter into irrelevance. That's what Nobel Prize winning economist Paul Krugman thinks.

What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?

A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished.

Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.

Yet the centrists did their best to make the plan weaker and worse.

Krugman doesn't think much of the centrists proud boasts that they've cut out the pork and items that, while laudable (their term), are not stimulative. Indeed, he begs to differ.

One of the best features of the original plan was aid to cash-strapped state governments, which would have provided a quick boost to the economy while preserving essential services. But the centrists insisted on a $40 billion cut in that spending.

The original plan also included badly needed spending on school construction; $16 billion of that spending was cut. It included aid to the unemployed, especially help in maintaining health care — cut. Food stamps — cut. All in all, more than $80 billion was cut from the plan, with the great bulk of those cuts falling on precisely the measures that would do the most to reduce the depth and pain of this slump.

And here's what he says about the much vaunted tax cuts that Republicans are still insisting are the most effective way to go.

On the other hand, the centrists were apparently just fine with one of the worst provisions in the Senate bill, a tax credit for home buyers. Dean Baker of the Center for Economic Policy Research calls this the “flip your house to your brother” provision: it will cost a lot of money while doing nothing to help the economy.

All in all, the centrists’ insistence on comforting the comfortable while afflicting the afflicted will, if reflected in the final bill, lead to substantially lower employment and substantially more suffering.

Tomorrow or Wednesday I'll devote a whole post to explaining in easy to understand detail why tax cuts won't work in this crisis. Suffice it to say now, that the three GOP moderates and their fellow traveling Blue Dogs gutted the heart out of a good stimulus package, one which the Republicans will cheerfully vote against but not filibuster. That's because they want it to pass and fail. They hope it's their ticket to winning back some congressional seats in 2010. The problem is it will be a phyrric victory because their tax cutting strategy long ago failed. After all, if tax cuts stimulate the economy, why aren't we prosperous right now?

Meanwhile, for the party that boasted that it was the one that put country first - heck it was McCain's campaign slogan - it's becoming real clear that all they put first is partisn ideology. While America's economy crashes, they're gleefully taking their inspiration from the Taliban.

Meanwhile, here's how it's all working out for those devil may care GOPers. According this poll, Obama still enjoys the public's support for the stimulus package. Although Americans remain deeply pessimistic about the impact of the plan, they want it passed by 75 percent. And according Gallup, Obama still enjoys a 67 percent approval rating for his handling of the economic crisis. Democrats, by contrast, had an approval rating of 48 percent, while 41 percent disapprove of them, and Republicans only have a 38 percent approval rating. Republicans also have a whopping 58 percent disapproval rating.

While most Americans are badly frightened right now and are hearing so many competing voices about the plan, they still remain convinced doing something is better than being the Taliban party of naysayers.

Seven Big and Dangerous Myths About the Auto Industry

A friend just emailed me this article from the Knoxville News' on-line business section. It's a compilation of the seven biggest myths about the Big Three automakers. Here's their opening salvo.

The debate over aid to the Detroit-based automakers is awash with half-truths and misrepresentations that are endlessly repeated by everyone from members of Congress to journalists. ******1: Nobody buys their vehicles.

Reality: General Motors Corp., Ford Motor Co. and Chrysler LLC sold 8.5 million vehicles in the United States last year and millions more around the world. GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of nearly 700,000 so far this year. Globally, GM in 2007 remained the world's largest automaker, selling 9,369,524 vehicles worldwide - about 3,000 more than Toyota.

Ford outsold Honda by about 850,000 and Nissan by more than 1.3 million vehicles in the United States last year. Chrysler sold more vehicles here than Nissan and Hyundai combined in 2007 and so far this year.

The article goes on to debunk other oft-repeated fables, such as the one that U.S. made cars are unreliable junk.

Reality: The creaky, leaky vehicles of the 1980s and '90s are long gone. Consumer Reports recently found that "Ford's reliability is now on par with good Japanese automakers."

The independent J.D. Power Initial Quality Study scored Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac and Lincoln brands' overall quality as high as or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo.

J.D. Power rated the Chevrolet Malibu the highest-quality midsize sedan. Both the Malibu and Ford Fusion scored better than the Honda Accord and Toyota Camry.

And this one, which will be an eye opener for my fellow environmentalists.

Myth No. 3: They build gas-guzzlers.

Reality: All of the Detroit Three build midsize sedans that the Environmental Protection Agency rates at 29-33 miles per gallon on the highway.

The most fuel-efficient Chevrolet Malibu gets 33 mpg on the highway, 2 mpg better than the best Honda Accord. The most fuel-efficient Ford Focus has the same highway fuel economy ratings as the most efficient Toyota Corolla. The most fuel-efficient Chevrolet Cobalt has the same city fuel economy and better highway fuel economy than the most efficient nonhybrid Honda Civic.

A recent study by Edmunds.com found that the Chevrolet Aveo subcompact is the least expensive car to buy and operate.

And this one, also important to those of us concerned with climate change, renewable energy, and energy conservation.

Myth No. 5: GM, Ford and Chrysler are idiots for investing in pickups and SUVs.

Reality: The domestics' lineup has been truck-heavy, but Toyota, Nissan, Mercedes-Benz and BMW have spent billions of dollars on pickups and SUVs because trucks are a large and historically profitable part of the auto industry.

The most fuel-efficient full-size pickups from GM, Ford and Chrysler all have higher EPA fuel-economy ratings than Toyota and Nissan's full-size pickups.

Myth No. 6: They don't build hybrids.

Reality: The Detroit Three got into the hybrid business late, but Ford and GM each now offers more hybrid models than Honda or Nissan, with several more due to hit the road in early 2009.

And finally, for the union-busting anti-labor critics on the right, this should finally put to rest their favorite whipping boy.

Their union workers are lazy and overpaid.

Reality: Chrysler tied Toyota as the most productive automaker in North America this year, according to the Harbour Report on manufacturing, which measures the amount of work done per employee. Eight of the 10 most productive vehicle assembly plants in North America belong to Chrysler, Ford or GM.

The oft-cited $70-an-hour wage and benefit figure for UAW workers inaccurately adds benefits that millions of retirees get to the pay of current workers, but divides the total only by current employees. That's like assuming you get your parents' retirement and Social Security benefits in addition to your own income.

Hourly pay for assembly-line workers tops out around $28; benefits add about $14. New hires at the Detroit Three get $14 an hour. There's no pension or health care when they retire, but benefits raise their total hourly compensation to $29 while they're working. UAW wages are now comparable with Toyota workers, according to a Free Press analysis.

I actually find the union's capitulation to the two-tier system that leaves new workers not only earning half the amount of older GM workers, but also bereft of a pension when they retire, appalling. I understand why the union had to agree to this to be competitive. But it means that America, far down the road, is going to have a looming crisis for that generation of blue collar workers when they hit retirement age that will make the concern over the baby boomers pale.

Let's face it, most baby boomers still are in some kind of pension system, many in the old defined benefits type, and a majority in a defined contribution, 401K plan - but regardless of which type of plan we have, we have something in a nest egg. With no pension plan at all, it leaves blue collar workers, who are not at the upper end of the pay scale nor particularly investment savvy, to fend for themselves. Most of those workers are in the 20s right now. But what happens when they hit 65 or 70 and are too old for hard, physical labor, because we're not talking about desk jockeys here?

Just a thought.

Meanwhile, lots of people, even those who are intelligent and well informed, believe the myths just debunked. I had dinner the other night with somebody who is one of my smartest friends - she's an orthodontist who guest lectures at Vanderbilt University in Tennessee - and she was shocked when I told her that auto workers do not make $70 an hour. Before this, she said that, although she is usually a pro-labor Democrat who thinks we need to bring our manufacturing base back inside this country, she had little sympathy for the auto industry and their workers. She also was surprised to learn that labor costs were only 10 percent of the Big Three carmakers expenses.

If this was an eye opener to her, I would guess an awful lot of other people would be just as shocked to learn that much of what they hear on televsion, radio, and local newspapers may just be free trade, anti-union, right wing talking points with little relation to reality.

I guess we still have a lot of work cut out for us, deconstructing the seven big myths that still guide the public's perception. It would be nice if more of the media took the lead in correcting those myths rather than being the ones largely responsible for spreading the misperceptions. Kudos, however, to the Knoxville News for stepping up and doing what a newspaper should do, investigate and spread the truth!

TARP Money for Auto Industry Bailout - I Hope So!

Since it looks like the Bush administration will push for TARP money to bailout the auto industry after all, we’ll be hearing a lot more from the rightwing bloviaters and their mainstream media colleagues about overpaid auto workers who make $70 or more per hour. Some have even set the figure as high as $78 an hour because, like the childhood game of telephone, where the message gets more garbled the more times its whispered in the ear of the next player, the hourly wage of the average UAW worker keeps getting higher each time another reporter or blogger reports it. The amount grows exponentially with media exposure. The only problem is it's all wrong. Let’s examine how this myth actually got started.

According to Jonathan Cohn, at TNR, here’s where it began. (And for more to back his assessment up, go to Media Matters too)

But then what's the source of that $70 hourly figure? It didn't come out of thin air. Analysts came up with it by including the cost of all employer-provided benefits--namely, health insurance and pensions--and then dividing by the number of workers. The result, they found, was that benefits for Big Three cost about $42 per hour, per employee. Add that to the wages--again, $28 per hour--and you get the $70 figure. Voila.

Except ... notice something weird about this calculation? It's not as if each active worker is getting health benefits and pensions worth $42 per hour. That would come to nearly twice his or her wages. (Talk about gold-plated coverage!) Instead, each active worker is getting benefits equal only to a fraction of that--probably around $10 per hour, according to estimates from the International Motor Vehicle Program. The number only gets to $70 an hour if you include the cost of benefits for retirees--in other words, the cost of benefits for other people. One of the few people to grasp this was Portfolio.com's Felix Salmon. As he noted yesterday, the claim that workers are getting $70 an hour in compensation is just "not true."

Cohn also points out the main reason the Big Three automakers have such high legacy costs for retirees is that, after being in business on U.S. soil for over a hundred years, domestic car makers simply have more retirees than auto companies that have only been here since 1980. In fact, as of 2007, Toyota only had about 1,000 retirees. Of course, their legacy costs are less. Further, if you factor in Detroit’s overseas competition, foreign workers get their health insurance from single payer plans, so car companies outside the U.S. are more competitive. Domestic manufacturing, in general, is hamstrung by our out of control health care system, which is eating away at profits.

Now that you know the truth, let’s put the recent failure of the Senate to pass a bailout package for the domestic auto industry into its real perspective.

A group of very rightwing, Southern senators, from right to work states with non-union auto factories, simply banded together to obstruct the bailout efforts because they smelled an opportunity to bust the union, more for purely ideological reasons than because the unions are truly draining the corporations of profits. Indeed, there are several other factors that can explain the Big Three automakers current financial problems.

Let’s start with bad management decisions. The car makers simply never diversified and produced a mix of small, fuel efficient cars as well as large, gas guzzling SUVs. In fairness, the SUVs were hot sellers earlier in this decade and not many business people were smart enough to predict the spike in gas prices this past summer. Just as nobody was betting that credit would dry up and our whole financial sector would near collapse. So, just at the time that Detroit’s products were no longer as desirable, even those who wanted to buy them couldn’t get credit. That’s not because consumers necessarily had bad credit ratings but because credit was simply so tight that banks weren’t even lending each other money. It was a liquidity problem, one which crippled GMAC, the financial arm of GM.

Let’s also not forget that while a bunch of Southern senators, from states that paid handsomely to attract foreign, non union car makers to their locales, decided to declare war on Northern workers, nobody should even be criticizing the average CEO salaries and bonuses. For example, Richard Wagoner of GM makes $8.5 million per year, with bonuses. The truth, though, is that the whole domestic auto industry is not the worst transgressor when it comes to inflated salaries and greed. Compared to the hundreds of millions of dollars in salaries, bonuses and perks that Wall Street’s high flyers routinely paid themselves, while bringing the economy crashing down, these guys appear modest in their salary demands.

So, why did the senators from Nissan, Tennessee; Toyota, Kentucky; and Mercedes Benz, Alabama vote to kill the Detroit bailout in the first place?

It could be to enhance the competitiveness of those foreign car manufacturers who were paid so well with tax breaks and other incentives by those respective Southern states to locate there.

But, as Jonathan Cohn and Media Matters point out, all of those foreign companies pay roughly the same wages to their non-union employees ($25 per hour as opposed to $28 for a senior union worker, and with comparable benefits). The danger, however, is that if Detroit and the UAW fold, that could be the signal for those foreign companies to begin slashing wages and benefits. With no threat of union organizing in their own U.S. plants, there would be no reason for foreign manufacturers to honor their wage agreements with non-union employees. Just as the airlines used bankruptcy to slash wages and destroy benefits in that industry, this could lead to the devastation of the entire domestic manufacturing sector.

If the government allows the auto industry to go bankrupt and those good paying manufacturing jobs to vanish, the domino effect on the American economy could be devastating. Perhaps the only wise thing the Bush administration has done in its eight years in power is realize that it doesn’t want the total collapse of the American economy and the end of the middle class as we know it to occur on its watch. It could be the legacy thing for Bush, but for whatever reason, it’s a welcome relief and I hope it happens sooner rather than when it’s too late.

Why It's Important to Bailout the Auto Industry

Proposals for a bailout for Detroit's Big Three have generated a lot of controversy across the internets recently. Predictably, conservatives oppose any government aid to the auto industry. For some it’s a principled argument. They also fiercely opposed the recent $700 billion aid package to help Wall Street despite the fact that the collapse of the financial industry would have created a domino effect which would have upended business on Main Street too. Two things make the conservatives dig their heels in. The first is their fierce faith in the market to self-correct, weed out the unworthy, and rebound by itself. The other equally fierce belief is that the less government intervention in anything the better. In fact, shrinking the government and drowning it in a bathtub has been their anarchic goal for years.

But another reason the right is so opposed to helping out the automakers is that they are salivating at the chance to bust the unions. You can see it in comments every where from the Wall Street Journal to the Cato Institute’s website.

But some progressives are echoing the conservatives' disdain for helping out the car makers. The environmentalists particularly have their gripes with the auto industry and, believe me, that distaste is well deserved.

But Robert Creamer provides a counter argument, on Huffington Post, to why progressives should support a bridge loan for the Big Three car makers. He’s not a naïf. And it’s not because of misplaced admiration for the captains of that particular industry who ran it down with poor management, bad products, obstruction of green technology, and generally bad business decisions. But he’s cognizant of the economic fallout across the board of allowing the auto industry to fail. His argument also gives lie to the conservatives’ complaint that it was overly generous wages and benefits packages to union workers that caused the companies’ failure. Indeed, he argues that high wages for union workers is a good thing for the economy and for America.

In fact, it is precisely this fact -- that unionized automobile manufacturers provide their workers with middle class incomes -- that makes it critical for government to assure the long-term survival of this industry in particular and the U.S. manufacturing sector in general.

The core failure of the radical-right-Bush economic policy is that the "markets uber alles" economic philosophy led them to lower incomes for most Americans while siphoning off all of the fruits of economic growth for the top two-percent of the population. Of course, that is a terrible outcome because the point of our economy should be to improve the lives of everyone -- not just the gang on Wall Street. But it has also been a disaster because widely-spread income growth is necessary to provide the demand that fuels long-term economic growth in the entire economy.

It's really simple: good economic policy requires that more and more Americans make higher wages, not that more and more Americans make lower wages.
Unfortunately, market forces by themselves do not yield that result. For that to be the case, you have to have strong unions like the United Auto Workers -- whose demands for good wages helped create the American middle class after World War II.

If we allow the unionized American automobile industry to collapse, we will accelerate the reduction of middle class incomes for everyone. That collapse would start a tidal wave of lower wages and, in turn, lower buying power throughout the economy. The auto industry and its suppliers represent a huge chunk of the American manufacturing sector. The collapse of GM or Chrysler would throw hundreds of thousands of workers onto the shrinking job market. It would start a domino effect of bankruptcies and layoffs among suppliers and dealers all over the country.

As I pointed out, Creamer is not naïve and he’s not willing to give away the whole store to the large auto companies. His bailout would come with strings.

Should the government make capital available without strings? Absolutely not. The taxpayers should demand a plan that guarantees the American auto industry has long-term viability. But that doesn't mean it should become a low wage industry. Its problems have very little to do with "bloated union contracts." And they certainly were not caused by "overregulation" or the intrusion of government into the decisions of the "private sector."

The economic problems of today's American auto industry are grounded in two catastrophically bad management decisions -- both rooted in the view that unregulated markets always yield correct outcomes. These have been exacerbated by the recent collapse of the financial markets.

This week Congress needs to do what is necessary to prevent the short-term collapse of the American auto industry. But over the long term a viable auto industry requires more than capital for auto companies. It requires a federal program to guarantee health care for all, a new approach to private pensions and a crash program to free us from our dependence on oil-powered vehicles.

It will also require a renewed commitment to strong unions and a high-wage economy that grows from the bottom up. After all, the health of every American business is ultimately grounded in the existence of consumers with enough money to buy their products.

Meanwhile, also at Huffington Post, Robert Borsage chimes in with an article declaring the following:

The era of big government is over is over. In the crisis, we are, as Richard Nixon once said, "all Keynesians now." Former Clinton Treasury Secretaries Robert Rubin and Lawrence Summers, until recently notable deficit hawks, now call for substantial fiscal stimulus -- deficit funded federal spending -- to get the economy going.

Summers whose alliterative guidelines for this year's earlier $150 billion stimulus -- "timely, temporary and targeted" -- helped to fix its mistaken focus on tax rebates, has changed his consonants. Now he says the stimulus should be "speedy, substantial and sustained," noting that some estimates on Wall Street have gone as high as "$500 to $700 billion." Rubin agreed, saying "we need a very substantial stimulus," while mumbling about needing to reduce the budget deficit over the longer run.

A major recovery program -- featuring substantial public investment -- will be inevitably the first initiative of the Obama administration. It should feature more spending than tax cuts -- investing in renewable energy and conservation, in rebuilding everything from schools to bridges to a smart electric gird, in helping cities and states avoid crippling cuts of services, in keeping college affordable, providing health care to children, and aiding those most in need.

I think this is the opening salvo in a new progressive narrative about the role of the government and unions in protecting the economic interests of the average citizen. It’s long overdue too. The argument is that just as in the 1930s, it took a combination of government programs, union activity, and a progressive alliance to jump start an ailing economy and usher in an era of unprecedented prosperity, not just for the Astors, Rockefellers and DuPonts but for the Joes and Jills who toil in the factories, kitchens and shops of America too.