Posted by
CPT on Sunday, January 31, 2010 5:34:48 PM
Authored by Lloyd Conway
The Era of Big Everything is over. Michigan, having advanced the farthest in the oil-age era of American industrial pre-eminence, has experienced the end of that era's effects earlier and more deeply than have other states. The wealth, unparalleled in history, which poured into the working class peopling Michigan's auto plants, is largely gone. some jobs remain, but the survivors will not see their ranks filled with unskilled laborers making middle-class wages. as the old-timers leave, the new economic reality will have a face - their 414.00/hour replacements.
The era of Reuther was also the era of "Engine Charlie" Wilson, Ike's Secretary of Defense, who coined the phrase, "What's good for America is good for General Motors, and vice versa." Time's Man of the Year was once a GM CEO. The wealth that Henry Ford found sleeping in Detroit - the use of de-skilled labor on assembly-line principles, using interchangeable parts (a concept borrowed from the firearms industry) and paying a wage twice his competitors - $5.00 a day - enriched first Mr. Ford and his investors (before he bought them out in 1911), then his workers, his competitors, a whole region, supplier industries, and eventually America. It depended on cheap oil, free trade (when America was an export-driven creditor nation), technological dominance, and the destruction of rivals' economies in two world wars.
The era really ended in 1973, the year of the first oil shock, courtesy of our ally, the Shah of Iran, when oil prices quadrupled. (The Shah may have been responding to President Nixon's closing of the gold window, ending the Bretton Woods system, resulting in a floating dollar.) Economies of scale, built on assumptions of ever-expanding markets and profit margins, had allowed GM to afford gold-plated UAW contracts; indeed, they liked them, since their could better afford them than Ford or Chrysler, and the UAW insisted on 'pattern bargaining,' which meant the imposition of what GM could afford on their less affluent cross-town rivals.
Michigan, as a state, super-sized. Big state government delivering a wide array of services, big universities, exploding suburbs where life without cars (two per family, usually) would be unthinkable, and all the trappings of 'the good life,' cabins 'Up North,' motorcycles, boats, fifth wheels and so on became status symbols of the American blue-collar aristocracy.
Black Lake was typical, not exceptional, when it became the crown jewel in the UAW's tiara. It's being for sale now mirrored both employers busily unloading Saab, shuttering Saturn, and wringing debts out in in bankruptcy and members selling those cabins that dot the countryside around Black Lake. Michigan's universities are feeling the pinch, too, and the Education Bubble will eventually burst, forcing an agonizing reappraisal (to borrow from Engine Charlie's Cabinet-mate, John Foster Dulles) of every program and position. Michigan's government is shrinking, too: The latest sign is UAW ally Gov. Granholm proposing a de facto forced early retirement that will take 46,000 teachers and other school employees, plus 7,000 state workers, off the public payroll. (State workers will, eventually, be replaced by two for every three who retire; the new hires will have less-generous benefits.)
This is, as a friend of mine calls it, "The Era of Broken Promises." retirees are seeing their defined-benefit pensions shrink and medical benefits erode. Those still working know that their retirements will come later, and that nothing is guaranteed.
Black Lake is a symbol, but it's sale, like its' acquisition, is a symptom. The real story is how America's success blinded it to a changing world, and how stubbornly the generation now in power clings to the past. The reality of what Strauss and Howe call 'a fourth turning,' when a civilization passes through a great gate in history, will force the agonizing reappraisal of all things by all Americans that Michigan is merely the first to experience.
-Lloyd A. Conway