Palin Undeterred By Facts
When interviewed by Human Events on December 22, Governor Sarah Palin said of the domestic auto industry:
Picking winners and losers in Washington, D.C., is a dangerous thing to do when you’re talking about a system that supposed to be based on free enterprise. When you talk about rewarding for work ethic and good management decisions and then consequences are the results of the opposite of that, and those decisions lead to some mistakes that are made in some industries, taxpayer bailouts should not be looked to as the be-all, end-all solutions.
"Picking winners and losers" is, of course, a folksy way of referring to industrial policy, and Governor Earmark is nothing if not faux folksy. And she implies, intentionally, that "picking winners and losers" is somehow antithetical to American "free enterprise." But as Robert Kuttner notes,
For instance, American commercial leadership in aerospace is no naturally occurring phenomenon. It reflects trillions of dollars of subsidy from the Pentagon and from NASA. Likewise, U.S. dominance in pharmaceuticals is the result of government subsidy of basic research, favorable patent treatment, and the fact that the American consumer of prescription drugs is made to overpay, giving the industry exorbitant profits to plow back into research. Throwing $700 billion at America's wounded banks is also an industrial policy.
Similarly, when Mrs. Palin claims "when you talk about rewarding for work ethic and good management decisions and then consequences are the results of the opposite of that," she assumes that such "consequences" are limited to the American automobile industry. Unfortunately, it's not that simple. Under the headline "Toyota Sees First Loss In 70 Years," the Wall Street Journal on December 23 reported:
Toyota Motor Corp. forecast its first annual operating loss since 1938, a dramatic indicator that the troubles roiling the auto industry extend beyond the U.S. and are taking a toll on even the strongest car makers.....
The recent pleas from the Big Three U.S. auto makers for a bailout from Washington have kept the spotlight on Detroit. But Toyota's forecast of an operating loss indicates auto makers of every stripe are facing extraordinary challenges....
Like all car makers, Toyota has slathered on incentives to try to boost sales, but such moves have had little impact. Dealers say tight credit and low consumer confidence are keeping buyers away from showrooms and threatening to hold down car sales in the coming year. John Bergstrom of Bergstrom Automotive, a dealer of Toyota and other makes in Wisconsin, said consumer confidence is so low "it's almost like they need permission to buy something."
And this from Reuters on December 16:
While the Bush administration reviews the "Big Three's" financial data, there were fresh signs on Tuesday of the auto industry's dire situation.
Volkswagen , Spanish car maker Seat and Volvo , the world's No. 2 truckmaker, became the latest companies to announce temporary production halts in response to declining sales.
Honda moved up its year-end news conference by two days to Wednesday, raising the possibility that Japan's No. 2 automaker could issue its third profit warning this year.
Carmakers are seeking help from their suppliers: Toyota plans to ask Nippon Steel and other steelmakers for a 30 percent price cut, the Nikkei business daily reported on Tuesday.
Sarah Palin thus managed in two sentences to suggest three falsehoods: 1) only the automotive industry gets help from the federal government; 2) only U.S. automakers are asking for help (why do some conservatives always blame Americans first?); and 3) the "system" is still "based on free enterprise."
Except that it's not. While the Governor of the Socialist Republic of Alaska was campaigning for the presidency- uh, er, the vice presidency- of the United States of America, she evidently didn't notice that the Secretary of the Treasury in a Republican administration headed by the most conservative President in over 70 years gained control of $350 billion dollars (the amount thus far doled out) of taxpayer money. That's $700,000,000,000 in control of the federal government, initiated by President George W. Bush, a Republican from, presumably, what Palin refers to as "the real America....(the) very patriotic, um, very, um, pro-America areas of this great nation."
That is the "free enterprise" Sarah Palin is talking about. And while she breathlessy accused the Democratic presidential candidate, who advocated cutting taxes for 95% of working families, with wanting to "experiment with socialism," the leader of her own party generated a plan allowing the financial industry to grab from the American people sums never contemplated by any "Socialist" of her imagining.
Merry Christmas........................................................Happy Chanukah
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