I just want to call out this bit from Michael Lind’s “The Economic Civil War“:
If the major U.S. automobile companies go under, it will be partly because timely federal aid for them was blocked by members of Congress like Tennessee Senator Bob Corker, whose states have created their own counter-Detroit in the form of Japanese, Korean, and German transplant factories. The South will have risen by bringing down the North. Jefferson Davis will have had his revenge.
The most shocking thing about the alliance between the Southern states and America’s friendly but earnest economic rivals to destroy America’s most important industry is the fact that so few people find it shocking. Contrast the U.S. with the European Union. The nation-states of the European Union collaborate with each other in order to compete against foreign economic rivals, including the U.S., Japan, and China. By contrast, many states, particularly in the South, collaborate with foreign economic rivals of the U.S. in order to compete against other American states. Any British or French or German leader who proposed collaborating with Japan or the U.S. in order to wipe out industry and destroy jobs in neighboring EU member states would be jeered out of office. But it is perfectly acceptable for American states to connive with Asian and European countries in the destruction of industry elsewhere in the U.S.
It’s particularly galling when you realize most of the “Red” states receive more federal dollars than they pay in federal taxes, while most of the “Blue” states receive less federal dollars than they pay in federal taxes. However, Lind says that’s the way things have to be:
Second, the race to the bottom in taxes and public services must be stopped by means of federal revenue-sharing. In most industrial democracies, the central government contributes much of the money for local services. In the 21st century U.S., too, a much greater percentage of state and local public service funding should come from the federal government, in the form of general revenue sharing (a popular and effective program abolished by Reagan) as well as special purpose grants and loans for some needs like infrastructure.
This means that more tax money, not less, will flow from blue states to red states. But it is the price the blue states must pay for the survival of their own way of life in their own regions. Ruthless Southern state governments have been willing to underfund public education and other public services, while lavishing hundreds of millions of dollars to bribe Nissan, Toyota, and other foreign corporations into opening up factories in their borders. The Southern states cannot be forced to raise state and local taxes. But federal revenue-sharing can raise the level of public services in Mississippi and Louisiana, thereby leveling the playing field by leveling up, not down. Nor is revenue-sharing unfair to the blue state rich, because the federal government taxes the rich everywhere, including the rich few in poor states. Moreover, the gradual equalization of public service spending nationwide might be compensated for by reductions in high blue-state tax levels.
I suppose that makes sense, but right now I don’t think I like it.
I’m sure it’s just my Yankee bias showing, but it’s a bit eerie to think that a bunch of Confederates are teaming up with the Axis powers to defeat us. And after all the work we put in to lifting them back up again after we defeated them the first times. Ingrates. Sheesh.
I’m not convinced that increased federal revenue-sharing would work to stop the race to the bottom in southern states, where the power elites seem intent on returning to feudalism. I even doubt we could get increased revenue-sharing passed; I expect southern Senators would block it out of some ideological allergey to taxes or increased spending or something, in a typical ‘cut off your nose to spite your face’ situation.
There’s developed in this country – I pin it on Reagan – an attitude. Every man for himself, every state for itself, every corporation for itself…Case in point: Goldman-Sachs made $2 plus billion this year, managed to deposit it off-shore or somewhere. The billions were taxed at 1 percent.
If we entertained the notion that, afterall, part of the bail-out money they received was probably like a tax-rebate, we were sorely mistaken. Take, but for god’s sake never give seems to have become the law of this forsaken country.
…I was just earlier this morning mulling over a variant of Michael Lind’s first point. It’s a bit strange for people who would call me a traitor for opposing a war of choice that seemed to have no particular benefit for this country to turn around and engage in a naked effort to directly damage industries and perhaps millions of Americans depending on those industries to the benefit of foreign entities. Clearly there is a disconnect between their concept of “patriotism” and mine…
I’m with Jack K, the Grumpy Forester.
“Every man for himself” is much more honest than “ownership society” or cries of “income redistribution”. There is so many circularly illogical, tautological talking points or memes that assume reward for the deserving and all-at-once defines deserving as the ones wtih all the rewards…with nary a mention of equality of opportunity, the perfect recipe for some Darwinian downward spiral in the evolutionary sense. It is hard to know just where to start in addressing them and the ignorance of those who cling to them.
Anything closely resembling even a pittance for the common good is lambasted as income redestribution, save the tax money for the part of the road and street light out in front of one’s own home.
I recall a conversation with a highly intelligent yet poor Mexican fisherman in Baja. He described the backwardness of Mexico as being due to the dysfunctional symbiotic relationship between small business persons and politicians…as long as there was little or no tax the politicians continue getting elected, despite the fact that the tax would be small and paid largely by the largest, most profitable businesses.
We sure seem to have followed Mexico’s lead on this one like a never-ending stream of conservative lemmings.
Still I am concerned that the immediacy of the meltdown and the mono-dimensional media focus has distracted us from what must be an ongoing discussion of the practices and de-evolution that have led to the current crisis. We are in triage mode and maybe the hemmoraging needs to be stopped before addressing the causes.
I hope Obama forces that discussion on the nation…with new memes and framing that subsumes the destructive ones that reach back to Reagan and even further. Apparently, the blogosphere has not been enough.
…and the worst, most dangerous meme of all thanks to Reagan — that government is something external that must be beaten down, rather than it being of, for, and by the people, US ! What happened to the idea that WE are only as good as we get and WE get as good as we are?
How much will it take to beat back that little chestnut? Maybe a whole lot of people all pushing at once?
Gosh, I must be coming down with something, because I can’t follow Lind’s reasoning in his final paragraph quoted above.
Now, how does it help the blue states, to have federal money picking up the slack for public services in the red states? Aren’t state and local taxes low in red states in good part to attract those foreign corporations? (True in Nebraska; the bill was called LB775 and is deeply despised by progressives. It hasn’t attracted many foreign companies, but it does cut deeply into our public services, including health care for children from poor families. And there’s a county in rural southeastern Nebraska that’s one of the poorest in America.) So wouldn’t federal revenue-sharing enable the red states– in the unhealthy manner of “codependency”– to keep their taxes low, and keep screwing over the blue states by attracting and hosting those foreign corporations?
I’ve read this sentence of Lind’s:
But federal revenue-sharing can raise the level of public services in Mississippi and Louisiana, thereby leveling the playing field by leveling up, not down
a dozen times, and I still can’t follow it. Maybe Lind is only concerned with alleviating a symptom (lack of public services in red states), and not trying to find a way to cure the disease (red states colluding with foreign companies to screw over blue states)?
Pat – Hatred of government is in truth hatred of its right to levy taxes. Real Republicans – not Republican sects that are all hung up on abortion, gay marriage etc. – only care about making money and growing it and keeping it. We don’t notice them dissing Bush. Could it be because the 15,000 wealthiest families have under Bush increased their income from $15 million/year to $30 million? Could it be because under Bush corporate profits increased by 68 percent?
Real Republicans are very quiet these days.
The right wing, “business’ is best crowd have been traitors for many years now, selling us out to slave labor where ever they find it
If you think that the EU is just “all for one and one for all” like some giant version of the French Mousqiteers, do some reading on the “Agricultural Policy” sometime.
How much will it take to beat back that little chestnut? Maybe a whole lot of people all pushing at once?
I think that one early step would be to get Reagan’s name off of Washington National.
Mousqiteers, bleh! Too early in the morning.
It was, of course, the Three Musketeers.
Seems to me the Masters of the Universe who came up with CDOs mostly worked out of Manhattan, and the captains of industry who outsourced so many jobs mostly worked out of companies registered in Delaware and headquartered in Manhattan, Chicago, California, etc. Yet you don’t call them traitors. Nor do the commenters bring up New Amsterdam or the Republic of California. For that matter, most of the parts in cars made in Detroit actually come from overseas, but there’s no mention of that. Yet the mere mention of the south brings the kneejerk reactions out of the woodwork. How about less prejudice and more of your usual thoughtful writing.
PS: I don’t support either Detroit carmakers bailout nor the Republican Senators who have been opposing it. What I’d like to see would be what FDR did with GM at the start of WW II: you’re going to stop making cars and you’re going to mak etanks. Except this time GM should make hybrids and plugins and rolling stock for mass transit. Yeah, I know there’s some vague language along those lines in the Paulson TARP bailout, but it’s all advisory and there’s nothing in there about mass transit.