I'm working at home and sitting waiting for my lunch to heat up while I watch Obama give a speech in Lansing, Michigan. It was interesting observing the muted reaction to his talk about the 21st Century economy. Obama talked about weaning ourselves off of oil and gas (polite, golf claps). He talked about investing in renewable energy technology (again, golf claps). Only when he talked about all the jobs that these things would create did the applause go above the smattering level. This doesn't really surprise me. Michigan politics (both parties) are the politics of denial. The right thinks that the way to respond to the declining profits for the big auto companies is to boost subsidies to the big three. The left thinks that if they can only legislate global trade out of existence the good old days of the 50s and 60s will return. Both are neck deep in denial (and that ain't a river in Egypt).
Global trade is not only here to stay, it is desirable for the country as a whole. And even if global trade hurts a minority of Americans, sacrificing trade at the alter of the UAW would be a huge mistake. It would represent a huge transfer of wealth from the majority to the minority in a way that is inefficient in the short term and unsustainable in the long term. It would be better to do what small, trade dependent countries like Denmark and the Netherlands do...mitigate the bad effects of trade for the minority by providing unemployment insurance, health care and decent education and continuing education for all.
Subsidizing GM, Ford and Chrysler will only perpetuate the legendary lack of innovation that typifies these corporate dinosaurs. It would be far better to expose them to the full force of negative market pressures for their decades of bad management and poor foresight. Instead we should subsidize companies that innovate and invent new products that fit the next century.
Obama is closer to what I think should be done in these regards than McCain. McCain wants to subsidize the 20th century industries like Oil and automobiles. What a monumental waste of money! But since Michigan politics is the politics of denial, McCain's message of subsidies to the old smoke stack industries sells.
Obama needs to think of a way to sell his superior policy approach to the rust belt. I think he can. But that is the task before him.