Wednesday, November 26, 2008

Senator Sherrod Brown's Remarks on Auto Industry Aid

Ohio's Democratic United States Senator, Sherrod Brown, made an eloquent and impassioned defense of the auto industry at a hearing held on November 18, 2009 by the Senate's Banking Committee. Take particular notice of the part that we have in bold type:

Mr. Chairman, thank you for calling this afternoon’s hearing.

The American automotive industry needs our help, and it needs it now. The surest way to turn today’s recession into a depression would be to let this industry flounder.

Like the banking industry, the auto companies have made some poor decisions. But they’ve had plenty of help. In 2005, for example, the House and Senate decided against raising fuel efficiency standards. Most of the members of this committee took the position that the CAFE standards were fine as they stood.

I wish the federal government had acted sooner on CAFE. But we didn’t, and so we are on shaky ground if we now shake a finger at Detroit for being ill-prepared for $4.00 gasoline.

I wish the federal government had acted a lot sooner to address the housing crisis, too. It was only a little over a year ago that the Bush administration began to realize we had a serious problem on our hands. Throughout last year, the administration and boosters in the housing industry told us the problem was largely contained.

It was contained, in their view, to the subprime mortgage market and to states like Ohio, Michigan, and Indiana. If you set aside those three states, according to one housing economist at the time, the market was doing just fine.

We’ve seen the success of that approach. Before long, every state in the nation felt the impact and every sector of the economy were dragged down by the troubles in housing. But that mistaken approach is exactly what some of my colleagues are suggesting we take in response to the crisis in the American automotive industry.

Sure, the biggest and most immediate impact will be in places like Ohio, Michigan, and Indiana. But auto suppliers and dealers and related industries in every state will soon feel the impact. This industry is woven into the fabric of our economy every bit as much as Lehman Brothers or AIG or the three banks that testified before the committee last week.

Each one of those three banks received $25 billion under the Emergency Economic Stabilization Act. If it makes sense to give one bank $25 billion, then we can certainly invest the same amount to save the entire domestic auto industry.

As we heard last week, the banks may or may not lend the money any time soon. They may or may not use it to buy other banks. They may or may not award nice bonuses to their executives this year.I do not know what those companies are going to do with the funds they received from the taxpayers, and I don’t know what impact it will have.

But I do know what the American auto industry will do with the loans it seeks. It will build cars using parts from every state in the nation. It will provide good jobs to hundreds of thousands of middle class families in places like Lordstown and Sharonville and Toledo, Ohio. And it will support a decent retirement for a million senior citizens in every corner of our country.

Nobody wants to write this industry or any industry a blank check, and if Detroit were indifferent to the challenges it faces, then I don’t think it would have a very good case to make. But if you need evidence that Detroit gets it, look at last year’s labor agreement.

Labor and management made unprecedented changes to bring their costs in line with the competition.

They didn’t anticipate the current economic environment any more than Alan Greenspan or Secretary Paulson did. But if failing to see the future foreclosed access to federal help, the line of applicants would be very short.

If that were our standard, the government wouldn’t aid the victims of floods or fires. But we don’t turn a blind eye to people who live near the Gulf Coast or the California hills. We help them. Economically and politically, we are the United States, not some confederation of islands.

And we must be united in rebuilding a strong and vibrant manufacturing sector, a sector that has withered over the past decade as we tried to build one Potemkin village after another. Our economy cannot make it on mouse clicks alone, and we cannot live by just lending to one another. We need to build real things.

Helping bankers is fine. But we have it exactly backwards if we help those who don’t need it and ignore those who do.

Thank you Mr. Chairman

1 comment:

Anonymous said...

Trickle up economics works.
Give the American people jobs, not welfare. Strength is in the diversity of skills a nation has.