You Decide

"WHAT COULD HAVE SAVED 30,000 JOBS?

"The news from Ford Motor Company's CEO hit hard across the country yesterday.  Ford is going to cut from 25,000 to 30,000 jobs and will close 14 Ford plants over the next six years.  The plant in Atlanta is one of those that will close.  This is going to hurt a lot of people.  That's sad.  It's also sad that this could have been prevented.

Blame can be spread, though not equally shared, to Ford management, the workers and the federal government.  No doubt management made mistakes in design, innovation and marketing.  The workers made mistakes because they forgot who was actually providing them with paychecks, and the federal government takes a huge share of the blame for our punishing corporate tax code.

Let's talk unions for a moment.  I saw some clips on TV this morning from plant workers who were understandably upset over losing their jobs.  One woman was saying that Ford gave her everything she had.  It wasn't a gift, she worked for it.  Another woman was saying that McDonalds just can't absorb all these workers.  How's that for ignorance? She actually thinks that those are the choices?  Build cars for Ford or flip burgers?  There's a woman whose knowledge of the job market is practically nonexistent.  The fact is, however, that the United Auto Workers have played a huge role in making Ford and other American auto manufacturers non-competitive in the worldwide automobile market. 

Have you been around a major union auto plant lately?  Look at the bumper stickers on the cars.  You'll see many more bumper stickers that say "UAW" than you will that say "Ford."  Watch the workers as they arrive or leave on a chilly day.  They're wearing UAW jackets, not Ford or Chevy jackets.  Many of these people have far more loyalty to their union than they do to the company that is actually writing their paychecks.  The financial burden that has been on these automakers by inflated union contracts has been crippling.  Many years ago the UAW developed a game plan for bleeding the automakers dry.  They would pick one of the big-three, either Ford, Chrysler or General Motors.  They would then hit the target automaker with a demand for huge pay and benefit increases.  That automaker would balk, and the UAW would go out on strike.  Finally, after huge loses, the automaker would cave.  A new contract would be signed, and the unions would then force that contract on the other automakers.  Over the years these contracts created a burden on the automakers that could not be sustained.  In some cases these automakers can't even lay off employees without having to continue their paychecks years into the future. 

Now .. the government.  Do not for one moment discount the effect our onerous tax code has on companies like Ford  The United States has perhaps the most crushing tax burden of any major player in the industrialized world.  Our politicians,  eager for money to spend on vote-buying programs, long ago figured out that they could hide the tax burden of the American working man and woman behind the illusion of corporate taxes.  These politicians would play on the economic ignorance of the American people -- an ignorance fostered by our system of government education -- by pretending to shift a good portion of the tax burden from the people to those evil, greedy corporations.  Some Americans are waking up to this ruse.  More Americans have now learned that these corporations don't actually pay taxes, they merely collect the taxes from their customers, their shareholders and their employees and pass them off to the government. 

Several years ago Chrysler Corporation merged with Daimler Benz.  After the merger was announced the bean counters and lawyers started to work out the details.  One detail would be just where the new corporation would be headquartered.  A study was conducted comparing the tax consequences of being a U.S. corporation vs. being a German corporation.  Germany won.  The new corporation would save a huge amount of tax money being headquartered in Germany vs. the U.S., so it became Daimler-Chrysler.

Now ... what could have saved these jobs and plants?  Better management?  Sure!  It also would have helped if the UAW members had actually remembered that they worked for Ford and not for their union.  It also would have helped a great deal if Ford had been more competitive in the global market .. a competitive edge that our tax system would not allow. 

This, of course, brings us to the FairTax.  What if Ford Motor company could operate in the United States with no tax component whatsoever on capital or labor?  What if every company operating in this country could operate free of tax consequences?  It's not difficult to figure out what would happen.  America would become the world's number one tax haven for businesses.  A "To Let" sign would soon be posted on the Daimler-Chrysler headquarters in Germany, and 30,000 Ford employees wouldn't be wondering about their future. 

Sadly, though, political power is more important than economic health.  You've heard me say it before, but it's a central point you need to remember:  The FairTax would be the biggest transfer of power from government to the people since our Republic was formed.  Politicians won't go willingly to the FairTax .. they'll have to be pushed.  They have to be threatened with a loss of their jobs.  That's the only way they'll listen, and you're the only one who can deliver the message."

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