Merger With Portent?

by Patrick J. Buchanan – May 12, 1998

To any with a nodding acquaintance of history, this nation is taking an incredible gamble. When Spain, Holland, and Britain began to import what they once produced, and rely on finance and trade for their prosperity, not manufacturing and production, terminal decline set in. By 1917, free-trade Britain, blockaded, almost went under for lack of the food Britain used to grow and the arms and munitions Britain used to make. A reliance on trade had left the empire at the mercy of German submarines and dependent for its survival on protectionist Americans…

Rather than let one of the U.S. Big Three auto companies go under, Congress in 1980 engineered a bailout of Chrysler. To keep Chrysler, General Motors and Ford from being buried by Toyotas and Hondas, that paragon of free traders Ronald Reagan imposed a hard annual quota of 1.6 million imported Japanese cars. Reaganite protection saved the auto industry, and Detroit came roaring back.
Most Americans applauded these rescues. But as we happily submerge ourselves today in the warm baths of the Global Economy, economic nationalism is out of fashion, passe.

Last week, the company U.S. taxpayers saved was sold off to Daimler-Benz. No one seemed to care that Germans in Stuttgart will now decide the fate of autoworkers in Michigan, dispose if Chrysler’s profits and plants, and reap the benefit of Chrysler’s technological advances. America barely blinked at the passing of its industrial crown jewel to Mercedes, and Britain hardly noticed as its legendary Rolls-Royce is carted off by Volkswagen.

The market has given a thumbs-up to the deal, and holders of Chrysler stock will reap a nice capital gain. But before we wave goodbye to Chrysler, some questions:

Is there no national interest at all in who controls Chrysler? If not, why did we save the company? Do corporate interests take precedence over any national interest in keeping our greatest companies American? Are these companies even “ours”?

Of greater alarm than the transfer of this industrial asset to foreign control is the sea change taking place in the minds of our elites. The idea of a “national interest” is vanishing. In Europe, the trend is far advanced. Nation-states are fading away, as the countries of Europe surrender their sovereignty to the new European Union. Some, like the Germans, seem euphoric at the idea of giving up their nationhood to become “good Europeans.”

In America, both parties celebrate the news that a fourth of our gross domestic product now comes from trade and that U.S. dependence on foreign markers and foreign goods is at historic levels. They are unworried that manufactured imports now equal 53 percent of U.S. production. This deepening dependency is healthy, they say; the Global Economy is wonderful; and the Dow and NASDAQ testify we have discovered the Rosetta Stone of endless prosperity. Who cares who controls what, if consumers benefit? Thus, the reasoning runs.

Following this to its logical conclusion, we will one day contract out to Asian shipyards the construction of American warships, hire foreign mercenaries to fight our battles, and open our borders to unlimited immigration so we may enjoy the benefits of an endless supply of low-wage labor.

Among libertarian scholars and journalists, a new line has emerged: Trade deficits are good for America! Conceding that this year’s merchandise trade deficit is likely to reach $250 billion, they declare this to be welcome news. In return for little green pieces of paper called dollars, we get all these wonderful foreign goods. What a deal for us.

To any with a nodding acquaintance of history, this nation is taking an incredible gamble. When Spain, Holland, and Britain began to import what they once produced, and rely on finance and trade for their prosperity, not manufacturing and production, terminal decline set in. By 1917, free-trade Britain, blockaded, almost went under for lack of the food Britain used to grow and the arms and munitions Britain used to make. A reliance on trade had left the empire at the mercy of German submarines and dependent for its survival on protectionist Americans.

Americans of that era feared any foreign dependency and sacrifices to avoid it. Thus, after the Crash of ’29, which wiped out a third of our money, we yet retained intact the most awesome manufacturing plant the world had ever seen. When war came, U.S. industry roared to life, turning out in superabundance the weapons that smashed the empires of Hitler and Hirohito.

We seem to have embraced the idea that true wealth lies in paper: cash, stocks, bonds. But 1929 showed that paper can be gone with the wind and that what endures are a nation’s resources — its factories, farms, forests, fisheries and mines, and the skills and productive genius of its people. True wealth is not the apples in the basket; it is the trees in the orchard. Whatever the benefit to consumers, the sale of Chrysler is a loss to America.