With jobs in the news President Obama has been eager to talk about the new found success of the American auto industry. He visited Ohio to highlight the fact that the American auto industry is back to being profitable after the financial crisis nearly wiped out the Big Three. I am quite sure that he will be reminding some of the folks in Ohio and Michigan that the Republicans were firmly opposed to assisting the U.S. auto industry. No question that the President’s actions saved about a million American jobs and spared us the ignominy of not having a domestic auto industry, but the Republicans still remain opposed to the actions taken by President Obama (and President Bush) I have to say that the criticism has been somewhat muted, with Mitt Romney claiming he was against the help before he was for it. (Or was it the other way around?) A potent issue in the industrial midwest, where the President will need help in 2012. I think the words from Republican Pat Buchanan on the American auto industry highlight the critical importance to the United States of a viable auto sector.
When workers, execs, engineers, dealers, salesmen and suppliers are all factored in, the Big Three employ 3 million people who contribute $21 billion a year to Social Security and Medicare, and $25 billion in federal income taxes. Add in all the businesses that depend on the auto industry, and we are talking about one-tenth of the U.S. labor force.
As columnist Tom Piatak of Chronicles and Takimag.com writes, 850,000 retirees, and their families, depend for pensions and health care on the Big Three. If they go under, the burden falls on us.
And to let the auto industry die is to write America out of much of the economic future of the planet.
So the President, in my opinion, has a good political story to tell on the Big Three automakers. But the job numbers released yesterday were not good news politically, with job growth below expectations, and unemployment still over 9%. The fact that two million jobs have been created in the last fifteen months (as opposed to the massive monthly job losses occurring when he took office) will not be enough to help the President politically. The Republicans teed off on him on that front yesterday, and will likely continue that drumbeat while the unemployment rate stays above 8%. Aside from some talk about “restoring confidence” and tax cutting for upper earners and corporations I have not heard anything from Republicans that leads me to believe they have a cogent plan for job creation. The “confidence fairy” talked about by Paul Krugman will not be creating demand anytime soon.