There are a couple of things to notice about this story. First, it has almost nothing to do with the core problems faced by G.M., Chrysler, and Ford. The wage gap between U.A.W. workers and workers at other car companies is no longer that big, and labor costs at this point account for only ten per cent of the cost of producing a vehicle…
More important, having the government dictate the wages of employees–which is literally what the G.O.P. was insisting on doing–is precisely the kind of government meddling in the marketplace that Republicans normally abhor… What’s next? Price controls?
Funny you should ask that, Jim. Because Henry actually wants price controls, at least on gasoline:
Specifically, a gas tax that fixes the price of a gallon of gas at $4 a gallon nationwide, with the tax being the difference between the market price and $4. The tax will thus adjust with the market price of oil–less tax when oil is expensive, more when it’s cheap. And the price of gas will stay fixed at $4.
I don’t see how you could conceivably get a "market price" when there’s no market: presumably oil companies and gas stations would simply mark up their prices so that the market price was always at or above $4. But it’s fascinating to me to see free-market types scrambling, when crisis hits, to come up with wage controls, price controls, and generally the whole panoply of failed Socialist policies. So much for ideology, I guess.