What color is the sky in Tom Friedman's world?

I learn from Smart Tom, Tom Bozzo of Angry Bear, that Dumb Tom, Thomas Friedman, of the New York Times, thinks we should let the auto industry fail because we all shop at eBay these days and Ford cars come in other colors besides black.

Or something like that.

Smart Tom writes:

Friedman doesn't like bailing out the Detroit Three which collectively sell millions of vehicles in the U.S. when we could get in on the ground floor with start-ups with interesting ideas but which otherwise sell none.

Smart Tom is trying to figure out what Dumb Tom meant by this:

[O]ur bailout of Detroit will be remembered as the equivalent of pouring billions of dollars of taxpayer money into the mail-order-catalogue business on the eve of the birth of eBay.

As Smart Tom points out, the mail order catalogue business has not exactly disappeared, a fact Dumb Tom may or may not know, it's hard to say---since Dumb Tom doesn't write as if he lives in this world, it's possible that he doesn't live in it and therefore isn't aware of what shows up in the mailboxes of millions and millions of residents of planet Earth every day.  Here where the sky is blue new technologies and methods don't always bring about the end of old ones; often they enhance them.  For instance, I doubt I'm the only customer of L.L. Bean who does his online shopping after getting ideas from looking through their catalog.  Just saying.

I presume that Dumb Tom isn't arguing that the government should base its decisions about what segments of the economy to save---and in the process what people's lives and livelihoods to preserve---on the same criteria as an online trader in 1996 trying to make a fast million in the stock market so he could quit his day job. 

He's probably trying to make the case that it would be a better idea to invest in the future than in the past.  But as Smart Tom points out, the future ain't here yet.  In fact, it's a long ways off.  Green technologies, new and improved mass transit systems, and rethought and redesigned suburban and city living and shopping spaces are good things and, I hope, the somewhat nearer future.  Right now, though, most of us still need our cars, we're stuck living where we live, and we don't have the money to go out and buy a new Prius.  We're going to be dependent on old-fashioned internal combustion engines for a few years yet and we're going to need parts for them to keep them running.

When the water pump goes on your 2003 Explorer, the guys down at the garage---assuming they're still in business---shouldn't have to go through a black market to get you a replacement from a junk yard in Tijuana.

Add to this that the Japanese and the German automakers aren't doing so well selling their cars here.  [Editor's note: Via Susie.] What do you think they're going to do when they decide this isn't a profitable market anymore?  Think the Japanese and German governments are going to come to the aid of troubled plants in "right to work" states?

Friedman is willing to let the American auto industry die in our world because in his world everybody's living in bubble cities and tooling around in flying cars that run on solar power already.

I guess.

Dumb Tom believes the Big Three are dinosaurs that ought to be left to die off in the dust kicked up by the economic comet that struck the earth last fall.  As evidence of how hopelessly unevolved and therefore unfit for survival the thunder lizards of Detroit are, Dumb Tom points out that Model T's built in 1908 got more miles to the gallon than some cars built today---25 miles to the gallon, in fact, he says.

Smart Tom says that Dumb Tom may be dumb but he ought to be at least not so dumb that he forgets to look things up online before he asserts them.  The Model T got between 13 and 21 miles to a gallon.  I expect that the difference depended on how good individual car owners were at tinkering with their engines or whether or not there happened to be a mechanic in town who had actually worked on a Model T before.  At any rate, as Smart Tom says, there are a lot of other, non-trivial differences between a car that gets 25 miles to the gallon now and a 1908 Model T, not the least of which is safety.  Comfort, reliability are others.  Speed is another.  Throw in the fact that you have your pick of colors.  Model T's came in one color, black.

But all that is a little beside the point.  Yes, it's true that the price of gas is an important consideration...now.  For almost seventy years after the first Tin Lizzie rolled off the assembly line it wasn't.  Gas was cheap.  Cheaper than sunlight will be.  There was no compelling reason for engineers to worry about it.  Comparisons to 1908 are good for hyperbole and for obsessive compulsives like Monk for whom 100 years is a soothing number because they like things arranged in multiples of 10.   They aren't really relevant to the problems of 2008.

Detroit did not react quickly or intelligently to the gas crisis of the mid-1970s.  Had anybody been listening, a reaction wouldn't have been needed---auto execs would have acted already to the warning signs in the 1960s.  But the industry should not be punished for what was or wasn't done in 1978.  It should be assessed and then corrected and/or aided for what has or hasn't been done over the course of the last thirty years to bring it to the point is at now.

In the 1970s, most American-made cars were giant, gas-guzzling heaps of junk.  By the mid 90s, most American cars were smaller, extremely more environmentally friendly, well-built, reliable, comfortable, and safe means of transportation that still guzzled too much gas, but not as much.  (SUVs are another story.)  They cost too much, but everything did and Americans compensated by buying on easy and cheap credit.

By the way ,the cost of Model T's might have given Dumb Tom a better opening for a shot at Detroit than the price of gas.  The Model T's chief virtue was that it was affordable by most everyone.  Of course, as Smart Tom says, "the Ford Focus or Chevy Cobalt of today not only are superior in every automotive way, but even cost less, adjusted for inflation, than the $850 (nominal) 1908 Model T."

Cars cost too much not because Detroit spent too much to build them (or, note to anti-union types, because they paid the workers who did the actual building too much), although having to factor in the unnecessarily high cost of inefficient private health care added to the sticker price, but because the wages of all middle-class and working class Americans---the main customers of the American car companies---stagnated or declined over the last thirty years.

The collapse of the American auto industry---hell, the auto industry.  Like I said, Toyota and the other foreign companies aren't doing too well these days either---is directly related to the disappearance of cheap and easy credit.  Americans can't afford to buy new cars because they can't afford to give themselves the fake raises they'd been giving themselves with their credit cards and home equity lines of credit in place of the actual raises corporate America had been stingily denying them for decades.

Bailing out the Big Three won't save the auto industry.  Neither will restructuring, re-tooling, and re-engineering, although all of that will help.  What will save the auto industry is saving the economy.  We need more and better jobs, all around.  We're not going to create more jobs by suddenly dumping a million unemployed auto industry workers onto the street.

This is what bothers me about all those arguing in favor of letting the car companies go under.

Where do they think all those people who've suddenly found themselves out of work are going to go?  Is there some brand new industry that is ready to start doing business tomorrow if only it could somehow find a few hundred thousand desperate people to hire immediately?

Last I looked, there are a lot of those already out there begging for good jobs.

Five hundred thousand more of them as of last month, in fact.

I expect Dumb Tom believes that enough new jobs and new industries will magically spring into existence as soon as they're needed, the same way he expected for years that a victorious resolution to the war in Iraq would magically appear, if the Bush Administration was only given one more Friedman Unit in which to work on the problem.  In Dumb Tom's world wizards and gods are constantly interfering in human affairs and magic solves every problem.  Here in our world, hundreds of thousands of out of work people are...out of work and shit out of luck.

Let's give the last word to Smart Tom.  Smart Tom says, comparing the proposed bailout of the auto industry to the actual "bailout" of the banking industry:

An important point that seems to have been lost in the auto bailout debate, made here by Save_The_Rustbelt not too long ago, is that Ford and GM pretty much had restructurings in progress as of the start of the tailspin which, while not a sure thing, nevertheless were reasonably calculated to put them on the right course by the tweens. When hundreds of billions of dollars are thrown around to try to rescue the economy from bets that shouldn't have been made in the first place and which appropriate prudential regulation will prevent later suckers from making at some future date, putting a few tens of billions at risk to stop a big chunk of manufacturing from imminent collapse is far from the stupidest thing in the world.

Comments

[Uncle Merlin]

I ALWAYS come down on the side of manufacturing HERE over financial hooligans THERE. But a good point was made, if Mercedes/BMW/Toyota don't make it here their CEO's and Governments aren't going to (I Love this, wait for it..) "Stay the Course" and keep their factories going over HERE!
Do you think we would have won WWII having Subs built in Germany or Japan???

[judith]

Tom's the master at getting some insider to exelain to him what exactly happened 5 years ago so he can go write a book about it. And the insider never slants it to try to make people to believe what he (and it is alwaya a he), the insider, wants the masses to believe.

Who ya gonna trust, big mansion Tom or the contents of millions of people's mailboxes? I suggest you check with someobdy in India before you answer.

[kate]

Be sure to never open the comments on most of the economics blogs. Those commenters are cold. They don't care who goes down, the more the better. Most seem to praise short selling, the Austrian school, and Ron Paul. They've got theirs and that's all that's important.

By the way Dumb Tom's advice as his wife's shopping malls near bankruptcy is "Go shopping."

[kate]

Be sure to never open the comments on most of the economics blogs. Those commenters are cold. They don't care who goes down, the more the better. Most seem to praise short selling, the Austrian school, and Ron Paul. They've got theirs and that's all that's important.

By the way Dumb Tom's advice as his wife's shopping malls near bankruptcy is "Go shopping."

[Susan]

re mileage on the Model T, IIRC the T could run on a number of different fuels - gas, alcohol, etc, so it probably got better mileage on gas and less on alcohol/alkie blends.

And yeah, Tom Friedman is really, really an ass. I bet the NYT could outsource him for five, six bucks a column.