Republicans Have Issues with Detroit’s Comeback

Republicans Have Issues with Detroit’s Comeback

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As the Republican presidential primary reaches Michigan, Rick Santorum and Mitt Romney are placing their rhetoric at odds with reality, clamoring for tax cuts to promote a recovery that is already occurring. Reminiscing about the good old days of Detroit’s automotive dynasty, they choose to ignore the government’s role in staging the city’s recent comeback.

A few weeks back, voters in Michigan believed the results of the republican primary were a bygone conclusion favoring native Mitt Romney. However, since the former governor of Massachusetts found his prospects threatened by former Pennsylvania Senator Rick Santorum, Michigan voters have been subjected to a deluge of nostalgia peddling, with each candidate evoking Michigan’s industrial golden years.

While the candidates’ fiscal prescriptions and devotion to free market economics is not surprising, their attempts to sell the idea that such policies would bring back Michigan’s hay days are somewhat bizarre: Even if tax cuts and deregulation could bring Detroit back to automotive hegemony, such policies would deprive the shiny new cars of roads on which to circulate, a dependable (let alone renewable) source of fuel, and would subject them to global competitive forces that drove them to bankruptcy once already.

What we take for granted

We take infrastructure for granted. We do so because for the past fifty years we have not had to think about it. The Golden Gate Bridge, the Hoover Dam, the Interstate highway network, the subway systems, and countless other massive projects have, it would seem, always been there.

We should remember however, that these projects were the result of massive public commitments undertaken after the Great Depression and through World War II. It seems corporations (and Republicans) tend to forget the crucial role these public goods have played in private success. After all, companies in the United States have used public roads to ship their products relatively cheaply for decades. Public funding for airport construction and maintenance has played a similar role.

Our infrastructure is getting old, and we can no longer afford to take it for granted. Unable to deny the problem, Romney has often advocated for a clever investment-beholden-to-future-revenue stream “solution.” Basically, making things such as public goods that were previously free into private property that is subject to usage fees.

That vision of the world however, is remarkably different from the middle class America Santorum and Romney evoke as they make their way through Michigan, clamoring for tax cuts. Back then, all roads were new, ours was the best public education in the world, government invested massively on research which then bore fruit for private companies, and it was all paid through government spending.

Detroit can make a comeback, oil cannot

Oil is a non-renewable, precarious energy source that constantly creates geopolitical tensions. Candidates for the Republican nomination should understand that while it is politically and emotionally astute to reference Detroit’s past, the world has changed in such a way that if the city is to resurface as an automotive giant, it is not enough to deregulate and cut taxes. The government should create the necessary incentives, and invest in the necessary research to literally fuel the automobiles of the future.

It is improbable that companies focused on short-term profits will seek alternate fuel sources or fund such research. Instead of continuing to favor big oil, Santorum should recognize the importance of alternative energy. For his part, Romney should desist from politically motivated attacks on subsidies for new venture investments such as Solyndra, especially when he has enjoyed similar benefits. A self-proclaimed seasoned businessman, he should know not every start-up succeeds.

The Free Market Hypocrisy

Even before the Republican presidential race reached Michigan, Detroit was making a comeback. Just ask Clint Eastwood and he will explain.

Perhaps both Romney and Santorum focused on Detroit’s distant past because the developments of recent years were rather inconvenient. After all, it was government spending that brought General Motors and Chrysler back from the brink of collapse, and both Romney and Santorum opposed the bailout that would later result in profitable companies.

To be clear, I am not supporting the idea that companies can or should be too big to fail. I am merely pointing to disconnect between the results the Republican candidates are promising, and their proposed means to achieve them.

It was not over-taxation or over-regulation that pushed the U.S. automotive industry into bankruptcy. That outcome we owe to cheaper, more efficient, more reliable, more long-lasting Toyotas available in the market when gasoline prices began to rise uncontrollably, and filling up the tank on SUVs became painful.

Washington did not force American automakers to build unaffordable cars. It was not government intervention that “artificially” demised these companies. They did it to themselves, and market forces worked just as the most neo-liberal conservative would have wanted.

It is easy for Republican candidates to espouse free market economic policies as though global market efficiency is the sole interest driving our national policies. It is easy to tap into the resentment of the average worker who paid the tab for an automotive industry that had to fail and be restructured before it could move beyond the gas guzzler concept of transportation.

What is not easy, and Republicans have avoided masterfully, is taking their neo-liberal rhetoric seriously. I will not argue here as to the wisdom or folly of the auto bailouts. Rather, I argue for consistency. Republican candidates are entitled to vituperate government intervention in the economy, or government intervention in anything for that matter, but as voters, we should expect them to stand by the consequences of the policies they support. Perhaps Romney and Santorum talked about the good old days, because otherwise their alleged free market convictions would have sounded like the following:

Hello Detroit. Please stop being successful. The global market has spoken in favor of the South Koreans, the Japanese and the Germans. You have proved yourselves inept at making cars. Your comeback is a result of government subsidies I opposed. Please give back the money and allow the global market to decide who takes your job. Thank you, and God bless America.

 

3 COMMENTS

  1. Couldn't agree more! The two front-runners in the Republican race seem to have lost all sense of logic – while Romney is discussing the right-sized trees in Michigan, Santorum is denying that global climate change is even an issue! As Alice would say, it is getting curioser and curioser!

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