The demise of General Motors as the largest industrial bankruptcy filing in American history is analogous to the demise of America's manufacturing base in that both were once the envy of the world and now both seem to be on their last legs.
The most disconcerting aspect of GM's death spiral, however, is the fact that most Americans are generally indifferent to the idea. An April CNN poll found that 76 percent of those surveyed favored allowing GM to fail without anymore government aid.
It is that attitude and the failure to recognize the importance of having a vibrant manufacturing base that has allowed America's industries to be gutted over the last few decades with little or no opposition.
"The American people want GM to go bankrupt,"- Ted Dobski, a retired GM executive from nearby Beverly Hills told Bloomberg News. "They don't care."-
That lack of concern may be a product of bailout fatigue, misinformation campaigns on the part of opponents of the Big Three, a lack of historical perspective, or a combination of all three.
Not long ago America was a country in which very few individuals were extremely wealthy, blue-collar workers earned wages that positioned them in the middle class and working families saw their children's standard of living steadily rising above their own. America was the preeminent superpower of the world and our great nation propped up the failing economies of those countries devastated by World War II.
During the Postwar period the United States dominated many export markets due to its inherent economic strengths including the fact that its industrial base was unimpeded by war. However, this immense advantage was only temporary. The 1970s ushered in an era of idleness, in which Americans lost their foothold in production and the gap between the United States and other countries' export competitiveness lessened. U.S. trade deficits ballooned in the 1980s and 1990s as "free trade"- deals expanded America's appetite for foreign goods. Our demand for foreign goods exceeded demand for American goods, and thus our country began to slip away from the greatness it once embodied; we began to lose our country.
Thanks to the loss of 3.7 million manufacturing jobs in the last 20 years (due mainly to so called "free trade"- agreements), we now have fewer people employed in manufacturing than we did in 1955. This is truly remarkable when you realize that America's population has risen by 77 percent in the interim (from an estimated 167 million in 1955 to over 300 million today).
Manufacturing jobs pay above-average wages because they typically involve sophisticated machinery that leverages each worker's productivity. The average manufacturing employee earns almost 32 percent more than the average service-industry employee. Thus the fact that manufacturing jobs have fallen while service jobs have ballooned merely means we have been replacing high-paying jobs with low-paying ones.
Indeed, while median family incomes increased from the 1940s through the 1970s, those gains have slowed to a trickle, stopped, or in some cases actually reversed. During that period, those at the bottom of the economic ladder saw their wages increase roughly on par with those at the top of the ladder. By 1979, as the era of globalization was ushered into America, the previous era seemed more like an anomaly. From 1979 to 2000, the top 20 percent of taxpayers in America realized three-fourths of all income gains.That trend has actually hastened as of late. From 2000 to 2005, the productivity of American workers increased by 16 percent, yet they witnessed their average income decline by 2.9 percent.
Possibly the most indicative statistic proving the American Dream is on life support is the fact that, when adjusted for inflation, a man in his 30's in 2004 will make 12 percent less doing the same job than he would have in 1974, according to the Economic Policy Institute. In 2007, chief executives of the 500 biggest companies in the U.S. made an average of $12.8 million apiece. That put their daily salary of $51,200 ahead of the typical workers' annual salary, which was $42,650, according to Forbes.
The declines in some manufacturing sectors have more in common with a country undergoing saturation bombing during war than with a super-economy that is "the envy of the world."
For over 100 years, GM was at the forefront of our vibrant manufacturing base which lifted millions out of poverty and provided the children of millions of blue collar workers with a fair chance at the American Dream. From 1931 to 2007, the company reined as the world's top selling automaker. GM's U.S. employment peaked at 618,365, making it the largest private employer in the country.
Now, much like the rest of America's manufacturing base, GM appears to be the lion in the winter - and America may well be too, economically.
"The most important thing now is that we make the fundamental point that you can't be a strong nation unless you build something," United Steelworkers President Leo Gerard said at a Congressional hearing last month.