Paul Krugman: Bad for the Country

The New York Times<>
Friday 25 November 2005

"What was good for our country," a former president of General Motors once declared, "was good for General Motors, and vice versa." GM, which has been losing billions, has announced that it will eliminate 30,000 jobs. Is what's bad for General Motors bad for America?

In this case, yes.

Most commentary about GM's troubles is resigned: pundits may regret the decline of a once-dominant company, but they don't think anything can or should be done about it. And commentary from some conservatives has an unmistakable tone of satisfaction, a sense that uppity workers who joined a union and made demands are getting what they deserve.

We shouldn't be so complacent. I won't defend the many bad decisions of GM's management, or every demand made by the United Automobile Workers. But job losses at General Motors are part of the broader weakness of US manufacturing, especially the part of US manufacturing that offers workers decent wages and benefits. And some of that weakness reflects two big distortions in our economy: a dysfunctional health care system and an unsustainable trade deficit.