July 10, 2010

The U.A.W. Can Help!

This is a response to a recent opinion posted in the New York Times about the U.A.W.

If the U.A.W. truly wants to help the middle class of this country they will join, perhaps even lead, in the battle to free our economic markets from the oligopolies that have been created and taken control of so many of our industries including auto, airlines, healthcare, financial services and others.

There is truth in your comments; however, the middle class was affected by other developments as well. First, A significant reason for the growth in the middle class beginning in the ‘50’s of the last century was the fact that this country was the last one standing after World War 11. The rest of the world was destroyed. There was no global competition and as a result this country grew and prospered.

Second, the U.A.W. played a major role in the creation of the first oligopoly after the war. This led to the destruction of many of our free markets, which is the engine of our economic growth, including prosperity for the middle class. In the 1950’s Ford, Chrysler, General Motors and the U.A.W. sowed the seeds to transform the auto industry from a free market industry to one controlled by these entities, rather than the free market. Yes, the U.A.W. was part of this newly formed oligopoly.

This oligopoly freely raised the wages paid to the U.A.W. members because the auto companies had little concern about the increase in the cost of building a car. They knew that the other members of this oligopoly would raise the price of the cars they built and thus everyone in the oligopoly would be able to pass on the added cost of labor to the consumer.

The U.A.W. protected its members from these rising prices; however, the remainder of the consumers bore the brunt of higher labor cost of building a car by paying a higher price for their automobile.

The corporations and the union that formed this oligopoly eventually got lazy and ignored the competition from outside this country that was growing. These foreign countries were able to produce an automobile cheaper and eventually even better than the lazy domestic auto companies were. The rest is history. Our American auto industry was destroyed and needed government intervention to survive.

In today’s world, the Board Members of these oligopolistic companies have little incentive to hold down the egregious salaries paid senior management because they know these extra costs can be passed on to the consuming public.

I applaud Bob King for saying “…… our own membership and forgot that the only way, ultimately, that we protect our members and workers in general is by fighting for justice for everybody.” My Dad was a U.A.W. member for over 35-years and his membership provided the ability for me to get a good start on life. However, I hope Mr. King’s focus is to encourage free markets in our major industries. Free markets, with much competition, create an environment where the companies in each industry focus on providing the best products at the lowest prices possible to the consumer. It is in their self-interest to do this because if they do not, they will no longer exist.

The U.A.W. needs to join the fight for free markets. Many people, especially republicans, believe that a free market is created when government does not get involved. In fact, free markets need government to keep markets free. A free market is destroyed when one entity, or a small group of large entities, are able to force their will on the market. It is a major role of government to be the rule maker and referee to assure that our markets indeed are free. The government must be the umpire to make sure everyone is playing by the rules of the free market. The government must be ready to enforce anti-trust laws when a company is not playing by the rules of the free market.

Let’s have the U.A.W. be a leader in restoring free markets. Let’s have the U.A.W. lead in reforming our campaign laws and prevent corporations, and unions, from buying votes of “our representatives. Mr. King, do you have the gonads to do this? This needs to be change so that our representatives stop representing these oligopolies.

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