Detroit vs. Wall Street: The Trillion Dollar Class War

Economic Policy
by Cameron Salisbury | December 3, 2008 - 3:59pm

If anyone doubted that a class war is in progress, hidden beneath a variety of euphemisms, like ‘bail out’, ‘downsizing,’ ‘outsourcing’ and ‘NAFTA’, their doubts can now be given the decent burial that they deserve. There has been no more blatant act of class antagonism in recent memory than the apparent willingness of Congress and Wall Street’s appointed grifter, Henry Paulson, to let a major part of the American manufacturing sector die.

The difference between a diffident Congress respectfully requesting a teensy bit more information before handing Henry The-Sky –Is-Falling Paulson a $700 billion authorization, in record time and with no strings attached, stands in stark contrast to the hostility and derision directed at Detroit’s auto executives, who are responsible for actually making something useful and who are requesting a $34 billion guaranteed loan to help get them through the harshest economy in memory. An economy in freefall, by the way, that is the direct and immediate consequence of Wall Street and its Washington, D.C., enablers.

Until recently, auto manufacturers were selling their big, profitable SUVs, making money for shareholders and being applauded by investors. Suddenly, Wall Street speculators hijacked the oil industry, transportation and food prices skyrocketed, the economic core of the country, the homeowner, went into Wall Street-induced foreclosure, and before Detroit could turn its massive ship around and concentrate more of its attention on hybrids, SUVs were collecting dust on new car lots. A lack of foresight? Yes. Just like millions of homeowners who tried to get ahead of the curve. Just like the Congress that had deregulated so many markets that corrosion had seeped into the financial base forming the substructure of impending economic doom.

The auto executives were told that they couldn’t get a government loan without a specific plan detailing how they would use the funding. With a brand new set of standards that had been notably lacking when Paulson’s railroad came through, Senator Pelosi made clear: “No plan, no money.â€