Will Dems Go Where GOP Fears to Tread?

February 26, 2007

Sunday's Detroit Free Press reports that our newly Democratic-controlled Congress is talking about taking on Japan's manipulation of the yen-dollar relationship, which accounts for a sizable portion of Japanese vehicle profits and competitive advantage over domestic models.

Republicans, led by the Bush Administration, have feared to tackle the issue because it is intermeshed with foreign relations. In other words, keeping Japan (and South Korea) strong is more important to the U. S. in its relations with China and North Korea than protecting American jobs, especially union jobs, in flyover country. Shades of the Cold War when the Soviet Union threat was the determining factor in tolerating Japan Incorporated.

According to the Freep, "Detroit automakers claim the lower value of the yen gives Japanese automakers an export subsidy that can amount to $9,000 on a luxury vehicle." Toyota and Honda each admitted in their recent financial reports, says the newspaper, that the weak yen added 7 percent to their third-quarter profits.

So is the get-tough-on-yen talk mere posturing, or are the Dems serious? Likewise, is there a willingness, regardless of party, to take measures to ease the structural cost disadvantages of domestic automakers? That of course begs the question of just exactly what, if anything, the federal government could do about company pension and healthcare costs.-- Mike Davis

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