PEP, February 2009: Banksters win, auto workers lose

If you want to argue that class warfare is alive and well in the United States, just compare the $700 billion bailout for the banks with the $17.4 billion so-called rescue package for the Detroit auto industry.

In October, then-Treasury Secretary Henry Paulson convinced the U.S. Congress to deliver a virtually unconditional handout to his former colleagues on Wall Street.

Two months later, after a group of mainly Southern Republicans scuttled a loan to the auto industry, former President Bush found the funds for a rescue package for Chrysler and General Motors — but with severe conditions on the workers.

Steelworkers President Leo W. Gerard got it right when he contrasted the Wall Street giveaway to the hostile reception Congress gave auto executives and UAW President Ron Gettelfinger before turning down the loan for Detroit.

“The message was clear: Washington will bail out those who shower before work but not those who shower afterwards,” Gerard said.

Under Bush’s watch in 2008, the country lost 2.6 million jobs — the worst loss since 1945 — and another 3 million jobs would disappear if Detroit went belly up.

But Bush’s conditions — cutting the pay of Detroit workers down to the level of foreign-owned nonunion auto plants in the South, eliminating a jobs bank that allows UAW workers to be paid and retrained during layoffs, and reducing the companies’ obligation to a health care trust for retirees — mirrored union concessions sought earlier by the gang of “Toyota Republicans.”

A GOP memo uncovered by the Los Angeles Times when politicians were debating the Detroit rescue demonstrated class-based political motives of the Republicans.

“Republicans should stand firm and take their first shot against organized labor,” the memo said, urging party members to help their Southern colleagues preserve the low wages at their states’ foreign auto factories.

So while the Washington elite didn’t think twice about giving away $700 billion to Wall Street banksters without even a slap on wrist for the fat cats who drove our economy into the ground, they took advantage of the auto crisis to carry out their low-wage, anti-union agenda and crippled the efforts of the auto union to bring millions of Americans into the middle class.

With no conditions, Wall Streeters have used the bailout funds as they please, maintaining their obscenely high executive paychecks, gobbling up other banks and refusing to inform the government of how they are using the taxpayers’ money.

If the government can dictate harsh conditions to the auto industry, couldn’t the Obama administration recovery package force the banks to use the bailout to prevent home foreclosures and end the credit crunch that is crushing workers, consumers and small businesses?