But it’s ok, because he’s a liberal.

Michael Lind in his recent article argues that the South is rising up again, this time in an economic civil war against the North. My first reaction was to think, “Well, at least he didn’t call us Nazi’s”. That’s progress. But because of the North-South divide of the auto bailout, yeah, the Civil War analogy is the nearest weapon at hand.

It’s hard to know where to begin with this intellectually lazy piece, but let’s start with the “race-to-the-bottom” business. Lind describes Southern strategies for employment as a “race to the bottom” by providing a low tax environment and cheaper labor. Labor was cheap in the South in the early part of the century for a simple reason, they didn’t have any jobs. In the thirties, what Lind and other talking heads would refer to as, “the glory days”, if a Southerner wanted to get a good wage job and didn’t come from the right family or own enough property, there was one good option…move North. That is, until the Tennessee Valley Authority handed out shovels for us to lean on. This is the model to which Lind wants to revert. When he says more money will flow from Blue states to Red States, he means that more government jobs must be created. You know, more road projects and more ditches dug, and more Southerners leaning on shovels.

Toyota is now edging GM in terms of market share. Japanese and German cars are superior to American cars in every division except trucks, and even trucks are close. the Toyota Prius has been around for 11 years and has been running rings around the Little Three with 40% of the hybrid market share. Building Toyotas, Hondas, and BMWs provide good jobs at $50/hr. These well paid blue collar jobs go to American citizens who pay taxes into the the system, but Lind naturally thinks that Southerners daring to get off the government teat while producing superior products that Americans actually want to buy is a race to the bottom.

Foreign car companies have been eroding away at market share for decades. The economic model of the Little Three is a failure, as demonstrated by the fact that they need a bailout despite a half century of a near oligopoly in the largest market in the world. A legacy of hostile relations between management and employees, and a top down, inefficient distribution model, and an incomprehensible groupthink preventing investment in smaller model fuel efficient vehicles are the culprits of the Little three’s downfall, not some Souther Senators. Even supporters of the auto bailout concede that bankruptcy is inevitable, they just feel that the bailout is a good jobs program. I’ve stated my ambivalence to allowing the American auto industry to go bankrupt while shoveling money into institutions like AIG making a profit on the deal, but the near consensus that these companies will come back for more, and soon, and the few concessions were made by the industry leads me to believe that the only way to innovate the American auto industry is to broker a bankruptcy. As with many tough decisions, Bush kicked the can down the road. Thankfully he bailed out a failing industry, for which he will get minimal credit, only after the GOP burned their bridges in the midwest. Politically, this kind of passive leadership is a disaster for the GOP.

There are a lot of other things wrong with this piece, but I’ll add two quick points. A raise in the minimum wage would not directly affect auto workers making well over minimum wage. But it would increase unemployment levels for a decade, similar to the glory days of the 1930s. Also, and this is a caveat that should be added to any article criticizing the flow of tax money from blue states to the South, is that states like Louisiana, Mississippi, and Virginia have a lot of blacks, and blacks use public services to a much larger degree than other groups. What they need in this country is a job, and if that job is at Wal-Mart or at a BMW plant, it is better than a TVA job, because that is the only option. Ford would rather build a plant in Brazil than build in the south, with right-to-work laws in place. Also, if Lind wants stronger unions he should get on board with a majority of Americans and support shipping illegal immigrants back to their home country so negotiations between management and labor won’t be undermined by cheap, quasi-legal labor. Perhaps he can dig up some old Mexican war related analogies.

A friend told me he met a colleague who insisted he was a libertarian. I bet in 2004 a lot of these guys weren’t saying how libertarian they were…

This was my rant to him on Libertarians and the bailout:

Libertarians are republicans who like to smoke pot.

That’s an old joke.

I voted for McCain and my GOP congressman, but not my Senator, since he voted for the bailout. Soon Kay Bailey Hutchinson, my other senator, will be running for governor. I will be voting against her as well. I hate not being listened to. I wrote and called both senators and my representative against the bailout and received a letter in the mail from my representative. That was pretty cool.

I voted for the libertarians on every other election. Much to my chagrin, most of the democrats won local judge elections as 2-3% voted libertarian in each election. The breakdown was 51-Dem, 49-GOP, 2 Libertarian. That is the way it breaks down when you vote libertarian. My county has had mostly GOP judges forever and that is good b/c they keep the criminals in jail, where they belong.

The sad thing about these elections is that good, smart Senators like John Sununu lost their seat whereas jerks like Ted Stevens win (they are still counting, slowly, the votes in Alaska. The best scenario is he wins and steps down and Sarah Palin nominates a new face).

But this isn’t only a GOP problem. Look at Chicago and New Jersey and see what happens when one party dominates.

The longer this thing goes on the more it becomes apparent the current crisis is due to a lack of transparency and encouraging bubblicious conditions. Sadly, everyone thinks the solution is encouraging more reckless behavior, encouraging yet another bubble, especially now that Obama is taking office. The first thing Obama will do when president is bailout GM, etc., which is corporate welfare at it’s worst, on principle even worse than the current bailout, and not change for the better. We were told that these banks needed 700 billion just to keep afloat and the signal now is that, well, now that we have this money in hand we can use it for helping this industry, which votes democrat (Michigan) and especiallly backed Obama. So I guess we really didn’t need all that money for greasing the wheels at the banks, then, right? Any argument made for the auto industry could apply to Starbucks, or Sun Microsystems, and to some extent American Express. But choosing which industry to save seems rather arbitrary at this point, and is not what gov’t does best. Over 20 American car manufacturers have gone out of business, I don’t see why all of the sudden gov’t has to start bailing them out. If GM can’t make a profit selling 9 million cars a year this is a systemic problem that a few billion free dollars won’t solve. Let them all declare bankruptcy, merge, and renegotiate their terms with the UAW and their creditors. The US auto stocks are now trading at 2$ so I don’t know think most shareholders will just have to eat it at this point. Remember that most execs are compensated mostly with stocks, most of which in their company so their holdings are now zero. So if you let them fail it is much worse on them financially, and much truer to the way a free market operates, than to bail them out and then go through the kangaroo court process of demanding limits on their compensation.