Smart. Sharp. Funny. Fearless.
Saturday, October 22, 2016

WASHINGTON — Have you noticed that one of the Obama administration’s most successful programs is also its most “socialist” initiative?

OK, the bailout of General Motors and Chrysler was not socialist in the classic sense: the government was not looking to hold onto the companies over the long run. Their turnaround was accomplished in significant part by tough, capitalist management steps.

But, yes, this was socialism — or, perhaps, “state capitalism” — because the government temporarily took substantial ownership in the companies when no one in the private sector was willing to put up enough capital to prevent them from going under. Today, the companies are thriving.

More than that: the auto industry exemplifies how unions can do their best to protect the interests of their members while also ensuring the prosperity of the companies that employ them.

This month, the United Auto Workers and GM reached a tentative four-year contract that will add or save some 6,500 jobs, provide workers with a $5,000 signing bonus and enhance a profit-sharing agreement.

Note that increase in profit-sharing. The union and the company are seeking to align the interests of workers and shareholders. The idea should be as American as a Chevy or a Ford: When a company does well, its employees should do well, too.

The UAW’s bargaining approach belies the notion that unions don’t care about the well-being of the companies whose workers they represent. On the contrary, the UAW made extraordinary concessions to keep the Detroit-based auto industry alive. Now, its members can fairly claim a right to some of the benefits.

“When GM was struggling, our members shared in the sacrifice,” said Bob King, the UAW president. “Now that the company is posting profits again, our members want to share in the success.”

Anybody have a problem with that?

And the bailed-out companies have come back, as Dick Cheney might say, big time. In August, GM announced that its second-quarter profits had nearly doubled, to $2.5 billion. To put that in context, in April 2010, GM reported losses of $4.3 billion. Revenue at GM rose 19 percent, to $39.4 billion.

In a sluggish economy, the auto industry is providing us with good news. And this good news was brought to you in part by the government of the United States of America, paid for by taxpayers just like you and me.

We taxpayers will reap rewards, too. A lot of money put into the companies will be earned back by the government, but there’s more: Employed workers will pay taxes (and not need unemployment compensation). The auto industry’s large network of suppliers will stay in business. Everybody involved will be able to buy goods and services that will put other people to work.

The larger lesson is that there are two ways to approach the problems capitalism inevitably runs into. One is to pretend that there are iron rules prohibiting us from doing anything at all. We are supposed to have faith that an invisible hand will eventually put matters right; in the meantime, we must accept any slap in the face the invisible hand might deliver.

Franklin Roosevelt described the other way in 1932: “Our Republican leaders tell us economic laws — sacred, inviolable, unchangeable — cause panics which no one could prevent. But while they prate of economic laws, men and women are starving. We must lay hold of the fact that economic laws are not made by nature. They are made by human beings.”

Once human beings throw off the chains imposed by the idea that all economic laws are “natural,” they discover the capacity to change things and can use the tools of democratic government to do so when all else fails.

We did not have to accept the collapse of our domestic auto companies, and we do not have to accept that the Federal Reserve is powerless to give the economy the boost it needs. There is no reason to believe that the federal government is incapable of investing more in schools, roads and other public goods to build for the future and get more money into the hands of consumers now. We do not have to rely on giving rich people tax cuts and then confine ourselves to offering fervent prayers that they might invest some of the money in creating jobs.

We can seek to control our fate, or we can turn the Invisible Hand into a God who commands us to be helpless.

E.J. Dionne’s email address is ejdionne(at)

(c) 2011, Washington Post Writers Group

  • susiesmom

    Finally! Someone who states the part that unions play in our daily lives. God Help Us All if any of these republican candidates get elected in 2012.

  • Dik

    Mr. Dionne;

    What happened to the bond holders in the government bailout of GM? Weren’t they the ones who were sacrificed to preserve these union jobs? Also the taxpayers are still on the losing end of this deal.

    Dik Thurston
    Colorado Springs

  • Wildwoodapp

    The taxpayers are not the losers, they would be losers if all of the GM workers had been unemployed all of this time, receiving unemployment benefits and loss of homes, etc to contribute to the general downfall of the economy. As for bond holders, everybody lost something in this economic meltdown, some more than others. I personally lost $25,000 when a savings and loan I invested in around 1982 went completely under. The point is we have a thriving auto industry now and if there were more manufacturing jobs in the U.S., we could have helped them survive too. Now we need the Jobs Bill to pass.

  • Luanne16

    This is a bright spot in a worsening economy. Maybe the administration should involve itself in more US buisnesses. Please keep addressing these positive stories. thanks

  • neutrino13

    I would like to believe it is true. I had a lot of disappointments in my life with the socialism. I lived under a socialist regime for a long time and fear its corruption. I applaud the bailout of GM and Chrysler but I am against the $5,000 each GM employee received before the debt to the taxpayers was repaid. I am affraid that we will see more of the same. By the way, GM and Chrysler are not out of the woods yet.

  • JoseARodriguezLugo

    My take on the Republican debates and the primary: It’s a horse a pony show that distracts voters from the agenda that the Republican establishment will really pursue if their man is put in the White House. I don’t doubt Republican patriotism and their commitment to “the American Dream”. What is always in doubt is their definition of the American Dream. As I see it, their version has the big corporations scoring big profits at the expense of the common ordinary citizen, with actions that result in lower wages, less workplace benefits, lower workplace safety standards, and lower environmental standards that result in polluted air, water and soil. Their version of the American Dream also embraces the notion that Industry and Commerce can regulate themselves, which is like leaving the Fox In Charge Of The Chicken Coop !!!! They have tried their best to eliminate the phrase “Trickle Down Economics” from the rhetoric during this campaign with a different camouflage suit but it’s still the same corpse. Witness to their economic “philosophy” is their absolute opposition to eliminating tax breaks for millionaires who pay proportionately less than me and you. More still, that opposition is centered around the fact that they receive their campaign money and their “after-leaving-office” perks from the Big Corporations and millionaires. This the Land of The Free and Opportunity and That Should Never Change, but, in these hard economic times it is not too much to ask millionaires and Big Corporations to help while we sort things out. Republicans who say that President Obama is a socialist apparently don’t hear their own rhetoric, because on the one hand they criticize his wanting millionaires to ante-up a little bit more in these hard economic times, yet on the other hand they criticize the Stimulus Packages which saved Big Corporations from going bankrupt and disappearing. That doesn’t sound like a socialist agenda to me. That sounds to me like a “Man Who Wants To Keep This Country Great For All” !!!!

    Unfortunately, my analysis cannot eliminate the probability that some of the opposition to this Very Intelligent President that we have is fueled by the myopic vision of some who cannot come to grips, like some in the sports world of years ago, with the concept of “Americans of African Descent As Quarterbacks In The NFL”.
    I cannot reward Republican politicians with my vote for bad behavior and tantrums in matters of such importance. Their attitude of “my way or the highway” and not negotiating is not acceptable. I only hear the Democratic Party and their Standard Bearer saying the things that are in the best interest of the nation and they shall get my return vote come November 2012.