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Source link: http://archive.mises.org/9165/uncivil-war-detroit-blames-the-south/

Uncivil War: Detroit Blames the South

December 30, 2008 by

The Union is squaring off against the South again. This time it’s Detroit’s union — the UAW — partnering with the auto manufacturers, politicians, and media supporters of the domestic auto industry to wage warfare against the entire South. In the midst of all the whining and begging for a bailout, the South has been declared the new enemy. FULL ARTICLE

{ 29 comments }

greg December 30, 2008 at 8:37 am

You hit the heart of the problem, UAW and the northern tax base.

We in the south have given tax breaks for auto companies to locate their plants here. The northern states can do the same and fund the auto makers bailout themselves. The north never gave the south any money to help pay for the tax breaks, so why should the north take some of the south’s money to bailout plants in the north? The northern states need to fund the bailout if they want that industry to remain.

People from the north continue to relocate to the south, not so much for the weather, but for the lower taxes. Most people find their home payments plus taxes equal the amount they pay for property taxes alone in the north. The warm winters is just an added bonus.

fundamentalist December 30, 2008 at 8:55 am

While I oppose bailing out Detroit, and the unions should bear some of the blame for car maker failures, but they shouldn’t have to shoulder all of the burden. I don’t know the actual figures for cars, but in most companies spend four to five times as much on overhead as they do on labor. I doubt that Detroit is any different. The car companies could go a long way toward reducing costs by reducing their overhead, possibly by wiping out several layers of management. Also, reducing Michigan’s ridiculously high taxes wouldn’t hurt any, either.

Pat December 30, 2008 at 9:45 am

I wouldn’t be surprised if they ask the government to pass a law that forces Americans to buy American products and I don’t mean through trade barriers, arbitrary regulations, and some other legislating means, but more like police coming to your house and checking whatever you own and sending you to jail if one product happens to be made by a foreign company…

You know, that sounds like a good fiction story to make.

Paul December 30, 2008 at 9:50 am

Pat, funny thing is a lot of “American” cars are made in Mexico or Canada and a lot of foreign cars are built right here in the US.

Inquisitor December 30, 2008 at 9:53 am

LOL so now lower regulatory burdens is “cheating”? What is wrong with these people? You’d think lower burdens are tantamount to slavery… funny, because it’s the opposite that is true.

Keith Trombley December 30, 2008 at 10:19 am

If we’re going to start throwing stones at geographic special interests, perhaps we could talk about sugar cane and rice, or TVA, or various flood, canal and hydropower projects.
Anyway, as a Michigander, I can tell you that socialism is very alive and powerful in the Great Lakes State. Feel free to begin pitching.

Eric Parks December 30, 2008 at 11:24 am

“Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.” – Frederic Bastiat

Eric December 30, 2008 at 12:30 pm

This is like the early railroad regulations. There was an outcry that some routes (with only a few competitors) were charging too much for their services. The free market result was that a direct route between two distant places cost more than taking a route that was longer and more round about.

The answer to such high rates was to create regulations that brought up the prices of all the cheaper routes so there wouldn’t be a conceived disparity in rates.

After all, who but railroad people could possibly know enough to become railroad regulators. And the public, who always thinks that they, alone, can influence government, got what they wished for: more government. Too bad they never figure out that it is they that lose by asking government to protect them.

Mike December 30, 2008 at 12:30 pm

While I find the level of nationalist rhetoric to be absurd as well (“Buy American!” “Um, why?”), it seems silly and reactionary to then turn the conflict into a regional one. We should also keep in mind that a large part of the “Buy American” mentality, in my experience at least, comes from the south.

StatusQuoJoe December 30, 2008 at 12:37 pm

Oh I am so going to get in trouble for saying this.

It appears as if the traditionally “blue” states are now expecting everyone else to sustain their standard of living, largess and poor management. What happens further down the road when the north-eastern/eastern states begin to crumble from over-density and a rapidly decaying infrastructure? Is it the responsibility of the rest of the union to re-build their infrastructure due to their mis-management of tax base and funds to support entitlement programs over capital investment in infrastructure?

Joe Calhoun December 30, 2008 at 2:57 pm

Maybe that Russian guy is right and the US will fracture. Why shouldn’t states secede at this point? What exactly does the US Federal Government do that a state can’t do? National defense? Is the South in imminent danger of invastion? I don’t think so.

I don’t agree with his map though. There’s no way my beloved birth state of S.C. will go with the Yankees….

as American as apple pie December 30, 2008 at 3:40 pm

“unpatriotically blocking a bill that was supported by the White House, that passed the House with a bipartisan majority, and that had the support of 52 Senators.” Michigan Governor Jennifer Granholm referred to the lack of support for the bailout as “un-American.”

…as American as the flag, and apple pie, and bailouts for corporate deadbeats!

Mikebrah December 30, 2008 at 4:10 pm

Mr. Calhoun,

Could you provide a link to the “Russian guy” you are referring to? I would like to read his theory as I have had the same one for awhile myself.

Even more motivated to secede than the southern states (in my opinion) would be the mountain states. ID, MT, UT, WY, CO, OR and WA. You could probably throw the Dakotas in as well.

RickC December 30, 2008 at 4:14 pm

If I recall correctly, wasn’t one of the primary reasons for the South’s secession in 1861 the onerous tariffs placed on southern goods, which was then spent almost exclusively in the north for developing their infrastructure? The more things change . . .

StatusQuoJoe December 30, 2008 at 4:20 pm

Mikebrah, maybe this is the web page that Mr. Calhoun was talking about?

http://online.wsj.com/article/SB123051100709638419.html

I don’t agree with his map it seems he is gravitating towards geo political boundaries, maybe just laziness in his assessment?

George P December 30, 2008 at 4:48 pm

Karen,

Actually, it is the second Civil War and unlike the first one the North is being honest about why it is fighting it.
Northern commercial interests are being harmed by Southerners so let’s see if we can send in the Federal government to set them straight. If they resist we can send in the army too.

craig December 30, 2008 at 6:10 pm

I am from Michigan, and I am still waiting to be blown away!

http://www.youtube.com/watch?v=5PdHC9kAJK4&NR=1

Bennet Cecil December 30, 2008 at 6:38 pm

It is true that the Detroit automakers will shrink in size since many Americans prefer cars from foreign manufacturers. We should not let them die a natural death; they deserve to be defibrillated and resuscitated. Let them die a peaceful death 10-20 years after financial bypass surgery. Would you let a 3 pack a day smoker die from coronary disease? Save his life! Try to rehabilitate him and keep him going another 20 years. Let’s try to keep those factories open and those high wage workers earning money and paying taxes.

Once the federal government opened the taxpayers’ checkbook with TARP to AIG, they made it impossible to deny help to Detroit automakers. With President Obama owing his election victory to union support, there is no doubt that the taxpayer will pay for this. We propped up banks that should have gone bankrupt because a Republican was president. Bear Stearns and AIG should have gone to bankruptcy court. The Bush-Paulson corporate socialism team helped their friends and Obama will help his friends in Detroit. This is democracy in action. The winners get to help their friends by taking wealth from taxpayers. Why else would people give money to politicians for heaven sake?

The federal reserve bank with the support of the Republican and Democrat parties is playing chicken with the rest of the world. They are rapidly depreciating the dollar to zero and thereby transferring wealth from the private sector to the federal government. They are pushing interest rates to zero. Their goal is to increase nominal GDP and the S&P 500.

When it takes 3 or 5 dollars to buy one Euro we will see a new policy. When interest rates and unemployment jump to 15% we will see a new policy. When the federal debt is $20 trillion and interest on the debt is a $3 trillion yearly expense we will see a new policy. Until these things happen, money will truly grow on trees.

Mark Lemon December 30, 2008 at 8:09 pm

TO: The South
FROM: State of Michigan
RE: Auto Industry

You win. You can have it. However, we’d like our Federal tax dollars back. And quit asking for our water.

TheBilderbergersrunAmerika December 30, 2008 at 8:45 pm

The mainline statist propaganda shouldn’t surprise anyone. The Atlantic and left coast commies should look to their drool pit of socialist lust of Europe. Ireland has cut taxes (as many states in the South lack the absurd taxation of the North) and Switzerland has a confederal government which promotes much more fiscal freedom and capital preservation (all the donkeys and elephants in their pinko commie dresses should note the South tried to have a confederal government-the real reason for the Civil War). More than likely, when the Bilderbergers decide to use their Amerikan Congressional hookers to put RFID’s into everybody and cut off food and water to those who won’t comply-they’ll be more uneeded upheavel. Watch Alex Jones stellar documnetary “End Game:Plan for Global Enslavement” for free on Google video if you believe these views are irrational. When will we learn from history-collectivism and all its policies are the tools of tyrants! Ultimtely, this is all a spiritual battle so grow close to the Almighty.

“Resistance to tyrants is obidience to God”-Thomas Jefferson

Sean December 31, 2008 at 12:03 am

Funny how the talk is about poor quality from Detroit, yet Car and Driver’s top ten has more GMAC automobiles than any other maker. It seems to be more of a business model issue than a quality control issue. Too much reliance on the financing arm as the profit leader and having the material supply (aka cars) being sold as a loss leader. Once the financing gets disrupted, the BM goes to pot. A good solution may be to keep the pressure on for renegotiating the over-weighted union contracts and floating credit to keep the companies solvent. Toyota didn’t even make it into the top ten. So much for that myth………..

Scott December 31, 2008 at 6:43 am

Sean:
You’re correct. The problem with Detroit is not so much the quality of its product – it used to be – as the business model. Thanks to the unions and poor management, they’ve locked in costs that are too high for their environment. The more the big-three and the unions delay the inevitable by going to the taxpayer for money, the more drawn-out and painful it will be for them. What is the incentive for them to change if they are given money?????

IMHO December 31, 2008 at 7:17 am

@ Karen: Excellent article!

@Craig: The ad gave me the creeps.

@ Greg:

“We in the south have given tax breaks for auto companies to locate their plants here. The northern states can do the same and fund the auto makers bailout themselves. The north never gave the south any money to help pay for the tax breaks, so why should the north take some of the south’s money to bailout plants in the north? The northern states need to fund the bailout if they want that industry to remain.

An interesting perspective that I hadn’t considered. But you are right.

@ StatusQuoJoe

Oh I am so going to get in trouble for saying this.”

No, you’re not, because what you say is true. But in all fairness, it was during the time when my area was quite red that the GOP racked up a huge debt and then lied about how much. People had to vote them out just so they could find out how big a lie it was.

Anyone know of a nice purple place to live?

@ Everyone:

Have a safe and wonderful New Year’s!

N. Joseph Potts December 31, 2008 at 5:28 pm

The charge that automaker management (of the 1930s) “sold their souls” to union brutes is a bit harsh, and lacks reference to the REAL gorilla in the living room: FDR’s federal government. The government (the outfit that has the army) FORCED (as only it can) the managements of all the automakers in the country at the time to let in the unions.
Now, in a grotesque mockery of “fairness,” it will do so also to those (in the South) that came into being after this event, through the card-check ballot that Obama and his Democrats have promised to impose on us.
The original tragedy happened during, and helped deepen and prolong, a depression. My, how history does repeat itself.

Darrell Wallace January 1, 2009 at 7:33 am

America has always had 2 countries in one. The Industrial North and the Agrcultural South. However, not being able to overcome the high tariff rates posed on the South by the Morill Tariff Act, fostered by the Lincoln administration, the South tried to peacefully secede. As someone said, “There was nothing civil about the war for Southern Independence”.
South Carolina, the first to secede, in the days after world war II passed a right to work law so that it is not compulsory to work in this state under a union. By not having to submit to the unions, companies like BMW found it profitable to come to S.C.
Greenville, and Spartanburg areas are among the fastest growing areas in the country. The South is now becoming the Industrial area and without the aid of unions.
There was a time when unions were needed, but they became greedy and over a period of time have squeezed the businesses they represent into bankruptcy.
If unions would concede to wages of that of their Southern neighbors, their Southern neigbors could afford the Detroit cars. How does a person who makes $20.00 per hour buy a product where a person makes (benefits and all) $70.00 per hour?
I was not living at the first secession of course, but at age 72, today I would vote for secession and use the same Constitution that the Confederacy used that contained a clause that “taxes would not be used for internal improvements”

Charles January 1, 2009 at 11:46 am

I find it interesting this blog is posted fully a week after Toyota announces it will have its first operating lose in its existance, yet the article comments Toyota is thriving. Sales reports for all manufacturers indicate declining sales. I wonder how those southern legislatures will explain the layoffs those transplants will most certainly be doing in the new year?

sovereignjohn January 6, 2009 at 9:47 am

It has amused me for the last twenty-five years that U.S. workers believe they can buy foreign and still keep their U.S. jobs. I had a co-worker a few years ago she couldn’t afford to shop anywhere else but Wal*Mart. I told her Wal*Mart was one of the reasons manufacturers were being forced to lower wages, lower benefits and move to China.

Rise and Shine Sovereigns, rise and shine !

Buckley January 21, 2009 at 11:58 am

The exodus from Detriot to the South is easily explained. It is a racial issue. Black ploiticians have run Detroit poorly sad to say. You add the heavy tax burden in Michigan and leaving for the southern states was an easy choice. But having Detroit run ,mostly, by black leaders and seeing their inability to run the city properly is the elephant in the room no one wants to talk about. And it is a hard thing to talk about as well. Black citizens in Detriot have no one but themselves to blame for this problem. But it is just one part of the problem however. The idea of breaking up the UAW and the incompetant leadership of all three Detroit automakers has created this crisis. The automobile industry in America is in trouble because it doesn’t have leadership that is innovative in making cars for that people can admire and enjoy and that leadership is too steep in corruption and indolance that it can do anything about it.

Divorce Lawyer in Detroit April 21, 2010 at 1:34 pm

I don’t believe in any “alliances” that the south may have with other automakers. I believe that companies are out there to make a profit and are finding out that the south is more beneficial to the automakers plans. Granted, the union does support it’s workers with wages, legal help, benefits, working conditions, etc. However, the south doesn’t have the high cost of labor as the north demands. It also has more flexible laws for automakers to work with. I’m a supporter of unions, but if I were a corporation looking to minimize cost, I would take my business to Dixie land. Divorce Lawyers In Detroit

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