The Great Obama Auto Bailout: Saving the Earth is Off the Agenda

02/03/12 0 COMMENTS

Iowa City, March 2, 2012  Originally published on ZNet. It is a testament to United States political culture’s deadly marginalization of environmental concerns that Barack Obama’s liberal defenders incessantly trumpet his administration’s bailout of General Motors and the auto industry as a shining and unalloyed success. Many Democrats pumped their fists in triumph when Obama blew his own automotive horn as follows in his State of the Union Address (SOTUA) last January 24th

“On the day I took office, our auto industry was on the verge of collapse. Some even said we should let it die. With a million jobs at stake, I refused to let that happen. In exchange for help, we demanded responsibility. We got workers and automakers to settle their differences. We got the industry to retool and restructure. Today, General Motors is back on top as the world’s number-one automaker. Chrysler has grown faster in the U.S. than any major car company. Ford is investing billions in U.S. plants and factories. And together, the entire industry added nearly 160,000 jobs. We bet on American workers. We bet on American ingenuity. And tonight, the American auto industry is back.” 

Forget for a moment that GM finally defeated Toyota last year because the Japanese firm’s supply chain was decimated by an historic Tsunami and a nuclear disaster. As the libertarian commentator Peter Suderman remarked the day after the SOTUA, “In a boxing match pitting a lower ranked fighter who’s been given brass knuckles against a higher-ranked fighter who just broke his ankle, I’ll bet on the one with the brass knuckles. But it’s not much of a victory.”[1]

Forget that the triumph came at inordinate and largely uncompensated corporate-welfarist taxpayer expense. Suderman again:

“…GM is no longer on the precipice of complete fiscal meltdown; all it took was a $50 billion gift from taxpayers, and a $20 billion tax break. Also: continued public losses as the company under performs. When GM went public, taxpayers bought up a 61 percent stake in its operations at about $33 a share. So I suppose Obama was right about one thing: the auto bailout was a bet of sorts; in order for the public to simply break even, GM’s share prices would have to rise to roughly $51. As of yesterday evening, shares are trading at $24.75. The company’s investors – that would be everyone who pays taxes – are losing money on this deal. This is straightforward industry favoritism, and it’s not particularly fair to the millions of American workers and taxpayers who play by the rules, but weren’t bailed out, and are now having to foot a giant-sized bill for a company that was.”  

Speaking of fairness to workers, forget also that the White House’s restructuring plan for the auto industry in 2009 included letting the company raid union pension funds to pay off wealthy Wall Street investors and permitted General Motors to double its car production for the U.S, market in Mexico, South Korea and China.[2] That’s the harsh top-down global-corporatist reality behind the president’s claim to have enforced “responsibility” and to have “got[ten] workers and automakers to settle their differences.”  

Put all that aside to reflect on what ought to be the biggest concern: celebration of the real or imagined recovery of an industry that is helping destroy life on Earth. The U.S. auto industry is hardly the only or even the leading contributor to the anthropogenic global warming that is creating an ever more imminent environmental apocalypse.[3] Methane-spewing animal agriculture is actually the number one source of greenhouse emissions.[4] Still, Big Auto is a giant source of the global warming that has significantly attacked life’s prospects. United States automobiles emit more than 333 million tons of carbon dioxide (CO2) per year, more than a fifth of the nation’s total CO2 emissions. With just 5 percent of the world’s population but 30 percent of the world’s automobiles, the United States accounts for nearly half the world’s automotive CO2 emissions.

Of course, the notion that “what’s good for General Motors is good for America” has always been a deadly illusion. The highly sub-divided work in the nation’s automobile plants has long been alienating, dangerous, and exhausting, and strongly segmented by inequalities of race and gender. Along with other leading corporate players in the petro-industrial complex, moreover, G.M. and other Big Three U.S. auto manufacturers (Ford and Chrysler) have of course been centrally involved in the creation of an unsustainable, over-extended, oil-addicted, and carbon-spewing way of life. Automobile dependency has ravaged America’s cities, neighborhoods, and landscape for nearly a century now, helping turn the country into an over-extended, highly atomized, anomie-plagued, and polluted, “asphalt nation.”  

The role of G.M. in the creation of this many-sided disaster was more than merely accidental or structural. Over three decades in the last century, for example, G.M. pursued a deliberate strategy of dismantling the nation’s electrical railways – including urban streetcars and inter-urban railways – and replacing them with cars, trucks, and buses. In 1921, fully 90 percent of American trips were by rail, mainly electric rail. Just one in 10 Americans owned an automobile. There were 1,200 electric street and interurban railways in the U.S. – “a thriving and profitable industry with 44,000 miles of track, 300,000 employees, 15 billion annual passengers, and $1 billion in income.” Nearly every U.S. municipality with at least 2,500 residents enjoyed its own electric rail system. [5] 

This was a problem for G.M., which set up a special unit charged with bringing about the great replacement through a variety of means: the use of freight leverage to compel railroads to abandon electric cars, the purchase and scrapping of electric lines, the use of financial (banker) leverage to encourage conversion to motor buses, the forming of holding companies to buy up electric lines and convert them to motor buses directly, the bribing of public transit officials. The conversion was complete by the early 1960s, when I recall my father taking me at the age of four to watch and photograph the very last run of a train on the inter-urban North Shore Line. That $50 million transit line was “the fastest electric service in the world, providing Wisconsin’s lakeshore cities and Chicago’s northern suburbs high-speed access to the downtown loop.” The state-of-the-art North Shore was purchased and taken down by G.M. and two bus lines (Greyhound and National City). As the onetime U.S. Senate Counsel Bradford Snell noted, “The streetcar [and the inter-urban lines] did not die ….because of demographics or economics or disinvestments or evolution; [the] died because GM in 1922 made a conscious decision to kill [them] and, for the next several decades, pursued a strategy designed to accomplish this objective.”[6]  

To acknowledge all this is not to call for the abandonment of past and current U.S. autoworkers or of the many heartland communities that have been devastated by the decline of the American automobile industry over the last thirty plus years. The point, rather, is for government to make a conscious decision to reconvert the nation’s transportation technologies and systems in accord with ecological principles, creating a new national fleet of very low- to zero-carbon-emitting automobiles and rebuilding mass electric transit in accord with more localist, anti-/and post-sprawl patterns of work, residence, mobility  and consumption. The re-conversion required would put millions to work in new green jobs, including many of those formerly employed in the manufacture of eco-cidal gas-guzzlers that have ravaged the world for decades. 

In the summer of 2009, the business press reported that Obama’s transportation secretary was traveling abroad in pursuit of contracts with European manufacturers to construct a small number of potential high-speed rail projects with federal funds designated by Congress for U.S. economic stimulus, U.S. taxpayer funding for badly need domestic infrastructural development would perhaps go to Spanish and other European corporations. “At the same time,” Noam Chomsky noted, “Washington is busy dismantling leading sectors of U.S. industry, ruining the lives of the workforce, families and communities. Surely,” Chomsky reflected, “the auto industry could be reconstructed, using its highly skilled workforce to produce what the country and the world needs—and soon, if we are to have some hope of averting major catastrophe. It has been done before, after all. But all such matters are off the agenda.”[7] 

So yes, it appears that some car-making jobs have come back (at significantly downgraded wage and benefit levels) in “the homeland” (along with many auto jobs sent abroad) under the terms of the Great Obama Auto Bailout ballyhooed by the Democrats this campaign year. But the environmental catastrophe marches on, unabated. Life itself continues to be ruined by a state-capitalist production system that pumps out greenhouse gases at rates that cannot be reconciled with hopes for a decent and democratic future. With new imagination and courage, we could address the employment and the environmental crises at the same time to produce what the country and the world urgently needs. 

Paul Street (www.paulstreet.org) is the author of numerous books, including Empire and Inequality: America and the World Since 9/11 (Paradigm, 2004), Racial Oppression in the Global Metropolis (Rowman&Littlefield, 2007), The Empire’s New Clothes: Barack Obama in the Real World of Power (Paradigm, 2010), and (co-authored with Anthony DiMaggio) Crashing the Tea Party: Mass Media and the Campaign to Remake American Politics (Paradigm, 2011). 

Selected Notes


[1] Peter Suderman, “Obama Rails Against Bailouts in Speech Defending Auto Bailout,” Reason (January  25, 2012) at http://reason.com/blog/2012/01/25/obama-rails-against-bailouts-in-speech-d

 [2] William Greider, “Obama’s Weird Idea of Auto Industry Rescue: Use Our Money to Build Factories Abroad,” AlterNew, May 11, 2009, at http://www.alternet.org/workplace/139940/obama’s_weird_idea_of_auto_industry_rescue:_use_our_money_to_build_car_factories_abroad ; Greg Palast, “Grand Theft Auto: How Stevie the Rat Bankrupted GM,” GregPalast.com, June 1, 2009, at www.gregpalast.com/grand-theft-auto-how-stevie-the-rat-bankrupted-gm/; Floyd Norris, “U.S. Teaches Carmakers Capitalism,” New York Times, November 20, 2009. 

[3] For detailed discussions of the crisis that is hitting us now, not just “our grandchildren,” see (among many possible citations) James Gustave Speth, The Bridge at the End of the World: Capitalism, the Environment, and Crossing From Crisis to Sustainability (New Haven: Yale University Press, 2008); Herve Kempf, How the Rich Are Destroying the Earth (White River Junction, VT: Chelsea Green, 2007); Bill McKibben, Eaarth: Making a Life on a Tough New Planet (New York: Times Books, 2010).

[4] See http://www.earthsave.org/globalwarming.htm 

[5] Branford Snell, “The Streetcar Conspiracy: How General Motors Deliberately Destroyed Public Transit” (1995) at http://www.lovearth.net/gmdeliberatelydestroyed.htm 

[6] Snell, “The Streetcar Conspiracy.”  See also See also Stephen B. Goddard, Getting There: The Epic Struggle Between Road and Rail in the American Century (Chicago: University of Chicago, 1996). 

[7] Noam Chomsky, “Coups, UNASUR, and the U.S.,” Z Magazine, October 2009, 26. I assume the “it has been done before” refers to the conversion of auto assembly plants into war production plants to defeat fascism during World War II.

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