Tuesday, December 16, 2008

One quick thing before getting off to work ...

In this morning's WSJ, a letter writer representing the auto industry makes a pretty good point about subsidies.
Stephen Collins, president of the Automotive Trade Policy Council, noted that many of the same automakers commended by the WSJ in a recent editorial received hundreds of millions of dollars in state and local subsidies to build plants in America: ["Letters"], scroll down to "Tax Fairness for U.S. Auto Makers."
In the editorial, the WSJ commended the companies for their nimble labor costs and good products. However, the per employee costs of state and local subsidies are 10 to 25 times what the federal bailout would be, according to Collins' math.
While I'm still against a bailout of the Big 3, this is a very valid point which should be considered in any discussion about the issue. Essentially, indirectly, we are all subsidizing Honda, Toyota, Nissan, etc. already right now, for the right to hire Americans to build good products. In fact, one could make the case that the back and forth between states jockeying over good manufacturing jobs like the ones offered by Honda and Toyota has created a disastrous economic situation for everyone. Especially when compared to the pre-free trade cult days, when there were manufacturing jobs galore.
In the wake of this economic mess, can we please have a serious and honest conversation about the myth of free trade and how globalization has brought our nation to bankruptcy?

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