National Liberal Radio Perfectly Summarized
While driving through the mountains of Colorado I was listening to National Liberal Radio. They were broadcasting a call in show with a host that would challenge the caller’s position on hot political topics. The topic for this show was whether the federal government should offer a bailout to the auto manufacturers.
Many different callers offered their explanations for how the auto makers have gotten themselves into this bind and whether they were thought the federal government should bail them out. Given that NPR is a de facto liberal station, most of the callers supported the bail out on grounds of protecting the auto worker. This included the host, who not only supported the bail out, but took it one step further arguing that such a bail presented an opportunity for the state to impose additional regulations on the car companies to produce more environmentally friendly automobiles.
Half way through listening to this discussion, the host took a call from caller who offered an alternative explanation for why the auto industry is in this mess. He claimed he was a design engineer for one of the big three and he refuted the idea that car sales were down for domestic produces because they ugly or unreliable. He supported this claim by pointing to the fact that even foreign dealerships are currently having trouble moving automobiles off their lot in the current economic climate.
He advanced the idea that the actual problem was the cost of unionized labor. Apparently, American workers cost upwards of twenty dollars more per hour than non-unionized labor. This has a rather dramatic effect on the stick price driving down demand for domestic cars. He argued that the big three are crippled by luxurious pensions and other perks that the unions have collected from the auto industry over the years and that this was making it impossible for them to compete. If these auto manufactures could somehow get out of these onerous obligations they would no longer need federal assistance.
After giving a perfectly cogent explanation for the big three’s situation, the host simply acknowledged the problem, thanked him, and politely dismissed the caller. He then repeated the same question he has been asking since I first started listening.
If the federal government bails out the auto manufacturers does the government have the right to more heavily regulate them to produce more environmentally friendly cars?
That question says it all. This host favors taking tax payer money, further regulating an already ailing industry, and forcing his environmental values on consumers over allowing these companies find ways to remove the onerous burden of union perks. When faced with an explanation that might solve the current problem without costing the tax payers billions of dollars the host for the most part ignores the suggestion. For him, the idea of using the state to regulate the auto industry to be more consistent with his environmental values, even with a dramatic cost to the taxpayer, is so appealing that it blinds him from actually being able to see a more perfectly reasonable solution.
And since he was the moderator, he directed the discussion away from the more free market solution back to the more liberal solution. This should serve as a particular salient example of the liberal bias in National Public Radio. When faced with reasonable solution that is not consistent with the underlying ideological dispositions of the host, they host simply ignores that solution and redirects back to the solution he favors.
In the aggregate, actions similar to this reveals a bias at NPR that justifies my moniker ‘National Liberal Radio’.
November 19th, 2008 at 2:32 pm
wow, I’m impressed that you listen to that station. Props.
November 19th, 2008 at 3:43 pm
Certainly union obligations are a big factor in why American auto companies are struggling, but let’s not oversimplify- making crappy products plays a big role too. Also, let’s not feel too smug portraying unions as these big thugs who muscle up to industry and start mugging their profit margins. Companies agree to huge pensions because the CEO’s can get cheap labor in the short-term, then retire with a huge bonus before the pensions crash the company. This is exactly the same behavior we are seeing throughout the financial sector, such as in mortgages being offered to people with no hope of paying them back, and the assumed future returns on those loans being used as leverage to borrow more money. The free market has broken down in large part because risks and costs are being pushed far enough into the future that they do not have a affect on the person making the decision, whereas that person does receive the immediate benefit. This is a basic vulnerability of our current free market system, and one that we should be addressing through sensible regulations.
November 19th, 2008 at 4:48 pm
Darwin, that’s not a vulnerability of the free market system, it’s a feature. If company boards members hire a CEO who makes poor long term decisions, then that company can and probably will fail. More regulation is completely unnecessary; the market regulates itself in this respect. If people choose to act irresponsibly then they will suffer the consequences. That is what happens in a free nation. I refuse to foot the bill when greedy auto executives made stupid agreements with equally greedy unions. Let them learn from their mistakes.
November 19th, 2008 at 5:39 pm
The problem with your account is that the people who are making the decisions aren’t suffering the consequences- either their companies are suffering long after they’ve moved on to new jobs elsewhere or retired, or else they still get millions of dollars and lavish retreats and so forth while running a company into the ground. I agree that the system would work if CEOs who made bad decisions ended up as penniless and destitute as the workers they put out of jobs, but as things work now, there’s just not enough of a disincentive to ensure that the free market principles operate smoothly. And while it may be true that the free market will still function in its current form, with giant financial and auto companies going out of business after 20-30 years of bad decisions and shuffling debt, it simply operates too slowly and with too much collateral damage. Regulations could force the market back into a place where individuals are held responsible for their decisions, and where dangerous schemes like the high-risk mortgages that are behind so much of the current crisis would have their negative fallout happen quickly and locally, rather than allowing them to grow like a tumor throughout our economy.
November 19th, 2008 at 6:25 pm
Shareholders in these companies must take responsibility for the company they own. They elect the board of directors, the board selects the CEO. It is not the responsibility of the government to inform companies on how to run their businesses.
Let’s say I open up a small factory that makes widgets. I hire a manager and regular employees. The employees decide they won’t work unless I pay them more, so they strike. My manager agrees to their demands so that the factory stays open and he can keep his job, but now my company is losing money. I try building cheaper, lower quality widgets to save money, but nobody wants to buy them, and I am still in the red. I take out loans to try to save my business, but that only delays the inevitable. On the brink of bankruptcy, I ask you, the tax payer, to give me a loan, so that my employees don’t lose their jobs. It’s not my fault my business is failing, my manager made the agreement, not me, so you have to help me. Then the government should make a law that holds the manager I hired accountable for his poor judgment. It is the federal government’s job to take responsibility for my company, not mine.
As for securitized mortgages, brokers were able to make the initial bad loans because investors wanted to buy those loans in a securitized package. These investors thought putting their money in American home loans was a safe investment. They were wrong. So we, the American people, say it’s ok, we’ll take care of the mess you made of things, don’t worry about it. You don’t have to go broke after making bad investment decisions, because Uncle Sam is here to bail you out.
November 19th, 2008 at 11:20 pm
Ug. Just to step in here, I’d like to remind everyone that the Unions are backed by law, and aren’t really part of the free market. Their election systems are messed up, and they hardly act in the favor of their members. The fact that Union officials haven’t said a word about taking cuts so that the business can stay afloat is absolutely astonishing.
November 20th, 2008 at 10:00 am
Why should Union officials take a pay cut when they can get the American tax payer to cover the difference?
November 21st, 2008 at 3:20 am
oh, I was talking about union members, but them too.