(Corrects year of advertisement in fourth paragraph; corrects detail of Ford Model A in eighth paragraph. For more Bloomberg View, click on VIEW <GO>.)
Feb. 9 (Bloomberg) -- Clint Eastwood has been busy fending off critics who posit that the Super Bowl commercial he made for Chrysler represents election-year propaganda for President Barack Obama.
The long clip, “Halftime in America,” features the Hollywood star walking around the automobile factory floor and talking about how recoveries like Chrysler’s are a model for the rest of the country. Eastwood later shot back on Fox News that he was “not politically affiliated with Mr. Obama” and that the commercial was “about job growth.”
The trouble with Eastwood’s commercial is not that it looks like one for the Democratic Party. Both parties have bailed out automakers.
In fact, if you squint at them right, Eastwood’s themes in the ad are also Reaganite: the “halftime” theme evokes the 1984 commercial, “Morning in America.” The trouble isn’t even that this commercial makes Eastwood look hypocritical, though it does. As recently as this winter, Eastwood was telling the Los Angeles Times that “we shouldn’t be bailing out the banks and car companies.”
Rather, the Super Bowl ad infuriates because Eastwood, like so many others before him, gets the story backward. What’s wrong with the auto industry isn’t that it failed to create jobs. What’s wrong is that it emphasizes jobs over general growth itself.
Jobs Follow Growth
There’s a reason they call employment a “lagging indicator.” Jobs follow growth, but, alas, growth doesn’t always follow jobs. When general growth doesn’t yield jobs in a certain sector, it suggests the sector may not ever produce jobs. Postponing shop closings means prolonging pain for both employer and employee.
Nothing makes this as clear as the sorry record of the industry that is the topic of this commercial. Back in the early years, in the teens and 1920s, automakers had a goal: profit. To gain profit, they focused on productivity, the famous assembly line. Yet even with selfish profit-oriented bosses, and even without unions, workers benefited. In fact, in the teens and 1920s, hours worked fell even as pay rose. A workday called Saturday became a day off.
The job growth that Eastwood so longs for now materialized then. Henry Ford singlehandedly caused a recession in 1927 when he idled his plants to build the Model A, the Model T’s successor. Unemployment rose. But the country pulled out of the slump when the Model A’s became available, not when Ford created jobs programs. An innovation, a car with an electric starter, found new customers. Supply created its own demand. Then came jobs, for a year or two.
Another period of automaking was the 1950s and 1960s, when Eastwood appeared in the series ”Rawhide,” and Westerns like “For a Few Dollars More” and a “A Fistful of Dollars.” There were jobs in that period. But the jobs were there, just as the titles of the movies suggest, because of dollars, growth and profits. In 1959, the year “Rawhide” had its TV debut, real growth in the auto industry was more than 7 percent, according to Series CA9 of the Millennial Edition of Historical Statistics of the United States. In 1966, the year of “The Good, the Bad and the Ugly,” it was 6.6 percent, real.
Scholars debate the reasons for the growth. One was a lack of competition. In the 1950s, Germany, Italy, France and the U.K. -- the most likely competitors -- were still recovering from World War II. For U.S. automakers, this period was the equivalent of a one-team Super Bowl. The lack of competition permitted an emphasis on unions and jobs. Without competition, companies could afford high wages.
Iacocca’s Bad Example
More recently, though, the emphasis on jobs became expensive. The famous Chrysler bailout of the 1970s created a hero lionized almost as much as Clint is today: Lee Iacocca. As Chrysler’s chief executive, Iacocca put jobs front and center. “I’m playing with live bullets, with people’s jobs and their lives,” he told reporter Judith Miller in early 1980, after Congress adopted and Jimmy Carter signed legislation providing more than a billion dollars in loans to the company.
The jobs that Iacocca and other automobile executives protected were supposed to save the company and the industry. They didn’t. Supporting a troubled company like Chrysler merely postponed a crisis. It turned out that the auto industry generally couldn’t keep jobs even in prosperity. From 2000 to 2008, the year Eastwood produced and directed “Gran Torino,” an epic movie about the decline of Motor City, auto manufacturing employment nationally dropped by a third, according to a report by the Congressional Research Service.
More evidence: There are states where policy emphasizes jobs less and profit more. Those are the so-called right-to-work states, whose number just increased to 23 from 22. Decade in, decade out, growth in real manufacturing gross domestic product is stronger in these states than in those without right-to-work laws; so is growth in nonfarm employment.
It’s easy to understand why Chrysler and Eastwood, not to mention schoolteachers and screenwriters, opted to perpetuate the old “jobs above all” myth. It’s the dominant storyline, so powerful that it obscures reality. But does it have to be?
Even as the Super Bowl commercials were being readied, lawmakers in Indiana acted on the evidence and passed a right-to-work law. Indiana has plenty of union members, and it hurts to shut out union friends. The governor, Mitch Daniels, came under ferocious attack for backing this bill. The move took as much guts as any stunt in a Western. Yet Daniels, a gubernatorial Eastwood, signed the legislation. In other words, he stared the unions down.
Go ahead, make my day.
Indiana needs the growth. Now there’s a storyline for a Super Bowl commercial.
(Amity Shlaes is a Bloomberg View columnist and the director of the Four Percent Growth Project at the Bush Institute. The opinions expressed are her own.)
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