Adversity doth make liberals of us all. John J. Riccardo, chairman of the board of Chrysler Corp., has come out for the principle of progressive taxation, while complaining that federal regulation of his industry makes a smaller company like his pay just as much for air pollution devices as a richer one like General Motors. "The regulatory load falls unevenly on us and affects us like a regressive tax," says Riccardo.
Riccardo is correct. Regulation frequently favors large corporations over their smaller competitors, but those who might like to save Chrysler by abandoning automobile emission standards are thinking like people who wear bearskins and club rabbits for food. We need clean air, but, when the American automobile manufacturers wanted to pool their engineering and development costs for such government-mandated features, Washington took the position joint development would violate the antitrust laws.
It's a mite lunatic to use the antitrust laws to enforce a government regulatory process in such a way that you reduce competition in an industry. It might make better sense to require industry-wide pooling of research and development for environmental purposes. That way cost could be shared "progressively" with DuPont paying a higher percentage than some small, regional paint or insecticide company.
It remains to be seen if permitting collusion in this area would result in lower and more fairly shared costs, which would be passed on to the customers, or if the system would be used to initiate a new form of commercial pillage. One hopes the latter is not the case because it seems asininely wasteful to insist that every company independently perfect a clean air device or a safe herbicide.
Another plaint that sounds startling in the mouths of businessmen is that Chrysler should be saved by the taxpayers to preserve competition in the auto industry. Ordinarily, businessmen contend the government need not worry its bureaucratic head about promoting competition and discouraging monopoly.
Yet the primary reason Chrysler has fallen on bad times is that it made bum business judgments and its competitors didn't. In actually, with or without Chrysler, the auto industry is hotly competitive. Besides General Motors and Ford, there is Datsun, Volkswagen, Renault, Fiat and on and on. Given the price of any car, even a cheap one, the competition and variety in the auto industry are unbelievable.
Today, the arena of competition in this industry is world wide. Saving Chrysler to save competition would only make sense if we were contemplating barring the importation of foreign cars. A growing number of people would like to do that. However, depriving our major trading partners of access to the gigantic American market would change the world economic system and put an indescribable strain on our network of alliances. It might also set off retaliatory moves against American car manufacturers abroad. Further, foreign cars are beginning to be made here. The "German" Volkswagen is manufactured in Pennsylvania; it's expected that in a few years, the American Motors plant in Kenosha, Wisc., will be chunking out Renaults.
Another argument some businessmen are pushing (in fairness, many don't favor putting Chrysler in a government-paid-for, intensive care unit) is saving the company to save its employes' jobs. Listening to some of them would make you believe they are late converts to the Humphrey-Hawkins Full Employment Act.
Saving Chrysler to save jobs opens the way for every wheezing conglomerate behemoth to swim, spouting and tail-flapping, up on the beach to gasp for federal aid. We've got a lot of super-big, mismanaged corporations.
For years when people have complained about the size of some of these outfits and suggested changing the antitrust laws to limit them, businessmen have screamed, "Don't penalize bigness for its own sake." Now it appears bigness is going to penalize us.
Since there will inevitable be other Chrysler-sized flops, we're open to more social blackmail. It is not necessary to subsidize and reward Chrysler's managerial folly in order to save its innocent employes. They can be directly assisted by helping them move to other places, covering their mortgages, retraining them, guaranteeing their pension fund. The motto should be: Save the people, let the company look after itself.