A Word from London

 

Herbert London

      Herbert London is John M. Olin Professor of Humanities at N.Y.U., President of the Hudson Institute, author of Decade of Denial, published by Lexington Books, and publisher of American Outlook. He can be reached at: www.herblondon.org.

Toyota: An American Company (?)

      While the issue of job creation has been highlighted on the presidential campaign trail, few Americans have the foggiest idea about how jobs are created and who does the creating.

      Let me cite an example. Recently I asked some colleagues, who are purportedly sophisticated about economics, which company produced the most American jobs in the last five years. The choices: General Motors, Microsoft, 3M, Ford, General Electric and Toyota. Not one person had the right answer, which is Toyota.

      Yes, this is a Japanese company now producing 1.9 million cars in the United States and continuing to expand its North American operation.

      Why this is the case provides clues about job creation. The so-called Big Three (GM, Ford and Daimler Chrysler) are so fettered by union contracts that they are outsourcing much of their manufacturing offshore. It’s the only way for these companies to keep the price of their cars within striking distance of the competition.

      Toyota, by contrast, is not weighted down with union contracts. In fact, by producing and marketing its cars within the U.S. it can reduce transactional costs and transportation uncertainties. It pays for Toyota to be a local manufacturer.

      The Big Three has a wage scale and benefit package that places enormous upward pressure on the price of a vehicle. A guaranteed salary for employees after three consecutive years of employment—the present commitment—is tantamount to a tenure system. Moreover, health insurance amounts to more than $5 thousand per employee, a sum more than twice that of annual Chinese wages in GM’s Shanghai plant.

      What this means in effect, is that Toyota is as much, if not more, an American company as Ford. Most significantly, by being able to reduce expenses within the U.S. and transport cars internally with relative assurance, Toyota can compete effectively with any U.S. car company.

      The ability to make a quality product which is very much in demand and at the same time control costs, allows for expansion of the market. That is how jobs get created.

      Unfortunately the Big Three are trapped by their own contracts. They can’t break them; they cannot renegotiate them and they cannot survive with them. Hence an effort is being made to manufacture as many parts of the “American” car as possible in low wage nations, most specifically China.

      The irony of this scenario is that as American companies produce cars in Asia, Toyota, a Japanese company, is expanding its presence in the U.S. One might well ask which of these car manufacturers is the true American company.

      There was a time not so long ago when Lee Iacocca was challenging the importation of Japanese cars because of what he claimed was an “unfair wage advantage.” Clearly a wage and benefits disparity between U.S. firms and Japan may well exist, albeit the wage scale differences have declined, but the real advantage lies in being free of onerous union contracts. Toyota is a great company with unparalleled manufacturing techniques and a unique assembly production line. But it also helps to be unencumbered with costly entangling, union contracts. With the introduction of a car that parks itself, the hybrid engine and the “crash free” automobile Toyota maintains its lead as an innovator in the industry.

      Management realizes that it isn’t only relatively low costs that ensure success; in a field as competitive as car manufacturing, successful companies must remain ahead of the curve. That means being innovative enough to carve out a market niche.

      Toyota has done that on the international level and will soon move from 10 percent of the world’s total car manufacturing to 15 percent. Yet what is most interesting and surprising from an American perspective is the extent to which this Japanese firm is increasingly an American company.

      I wonder what Mr. Iacocca would say about that. In a relatively free market system few people—including many experts—haven’t taken notice of this great change in the car industry.

Condoleezza Rice and the Issue of Race

      Much has been written about Condoleezza Rice’s testimony before the 9/11 commission and I’m sure much more will be written. But an article by Alessandra Stanley, New York Times, 4/10/04, caught my eye.

      She wrote:

There was absolutely nothing in Condoleezza Rice’s neutral-toned suit, primly folded hands or calm demeanor to draw attention to her sex or race. Her answers, guarded, prosaic and a bit pedantic, were typical of any high-level Washington official.

      She went on to note that Ms. Rice as a black woman “is rarely mentioned in Washington.” “She is so much a part of the establishment and blends so smoothly into the buttoned-down Bush White House that her heritage is usually invisible.”

      Perhaps I am overly sensitive, but it appears to me that Ms. Stanley’s description is remarkably condescending. Why should Ms. Rice’s appearance draw attention to her race? Or the corollary, doesn’t her appearance speak to her race? Why shouldn’t her answers be typical of a high level Washington official? And why shouldn’t she blend into the Bush White House?

      After all, Ms. Rice is black and proud of her heritage. She is a high level official in Washington and who better to blend in than someone on whom the president relies. Would Ms. Stanley have been impressed if Ms. Rice spoke in rap rhymes like Jesse Jackson? Would it have been appropriate for her to dress like Janet Jackson? And should she speak as if she went to the Al Sharpton gospel school?

      What we are dealing with I suspect is a journalistic stereotype, what some have called liberal racism. Ms. Stanley seems to find it hard to accept Ms. Rice on her own terms. Despite the fact, she was raised in segregated Birmingham, Alabama, Rice considers her success to be a function of her upbringing by college- educated parents who prodded her to excel.

      There is therefore nothing unusual about her demeanor and no reason to bring attention to her race. She was at the commission to testify as a government official, not as a black government official or even a female government official.

      There was a time not so long ago when most Americans black and white, liberal and conservative, would have rejoiced at the apparent “color blindness” in Ms. Rice’s testimony. But as Ms. Stanley seems to imply those days are long gone. Race and sex seem to trump other considerations, a legacy of university English department programs and what passes for journalistic studies.

      In fact, this attitude is ensconced in certain partially developed minds. Recently, I accompanied my wife who went to see her cardiologist for a check-up. During the course of this visit the doctor and I engaged in a conversation about politics. After the by now anticipated attack on President Bush, she proceeded to call Ms. Rice an “oreo,” white on the inside but black on the outside. I was offended and asked her to explain.

      After sputtering for a moment, she proceeded to rely on a host of stereotypes about blacks. This from a well-educated physician who wears her liberal views as a hirsute. When put on the spot, she did engage in a strategic retreat, but it was too little, too late. Even she recognized her brazen disregard for individual differences.

      The curious thing about this encounter is that it isn’t unusual. Racism of the right—a crude reliance on racial stereotyping—has been replaced by a racism of the left with its own set of stereotypes.

      What has been left out of this racial equation is the intelligence and achievement of the president’s national security adviser. She is a formidable representative of the government’s position whatever her race or gender. That is what Americans should remember about her testimony. Unfortunately, that isn’t the case, as Ms. Stanley’s article attests.

 Lenin, News Accounts and Anti-Bush Sentiment

      I sometimes get the impression that some members of the Washington press corps employ tactics that came out of Lenin’s playbook. Lenin argued what is good is what advances the proletarian revolution. It doesn’t have to be true or humane; it must simply advance the goals of the Party.

      In 2004 there is a new refrain, but an echo from the past: what is good is what advances anti-Bush sentiments. Here too the claims do not have to be true as long as the cause is advanced.

      For months newspaper editorials decried the loss of jobs. The rather odd word “outsourcing” became a source of disdain. Bush was credited with destroying the employment market.

      Then, of course, a funny thing happened on the way to the editorial page. The March Labor Department figures were published which showed remarkable growth in job creation and acquisition. In fact, these are the most favorable numbers in four years.

      Similarly, Bush was saddled with a “near depression” by the journalistic community until the statistics for the last half of 2003 were published. These numbers showed a startling 13 percent growth rate during that period, the fastest G.D.P. growth in twenty years.

      On the foreign policy front the press corps stumbled all over itself in an effort to embrace the claims and criticism of Richard Clarke. It refused to examine the obvious: How is it possible that Condi Rice “never even heard” of al Qaeda in 2001 and was it unreasonable for the president to ask about Iraq’s involvement with terrorism after two of those who attacked the World Trade Center in ‘93 were Iraqi citizens who returned to their country of origin as heroes?

      Pushing the ball forward invariably means embarrassing the president. Since weapons of mass destruction have not been found in Iraq, the president must ipso facto have been lying about his casus belli. It hasn’t occurred to most journalists that President Clinton also believed Saddam Hussein possessed these weapons and, as a matter of fact, Hussein used poison gas to kill 40,000 Kurds. Isn’t that a weapon of mass destruction?

      Then there is the press canard bolstered by Richard Clarke that Saddam was a distraction, the wrong enemy. However, Abu Nidal and Abu Abbas—two of the world’s most notorious terrorists—found a congenial home in Iraq. Al Qaeda maintained a training camp in Iraq and the head of Iraq’s secret police met with Mohammed Atta, the prime planner of 9/11.

      Moreover, from a geostrategic point of view doesn’t it make sense to have a presence in “the neighborhood” that spawns terrorism? What nation other than Iraq shares a border with Syria, Iran and Saudi Arabia, three nations largely responsible for promoting international terrorism?

      As I see it, strategic Leninism is alive and well ensconced in press corps opinion. Fortunately most Americans are suspicious of press accounts and editorial opinions. But that is most Americans, not all Americans. Some people are suggestible and some welcome anti-Bush sentiment even when transparently untrue.

      What has happened in recent years is that some sectors of the journalistic community are an extension of a political party, partisan to the core. They view their job as defeating President Bush thereby using news accounts, or should I say selective news accounts, as an instrument to promote their aims.

      Lenin is gone, thank God, but his tactics survive. As a consequence, news is now what advances the party apparatus, a condition not dissimilar from days of yore in the erstwhile Soviet Union.

Colleges That Don’t Require Core Subjects

      A recent report by the American Council of Trustees and Alumni (ACTA) entitled “The Hollow Core: Failure of the General Education Curriculum,” reveals that most college students can graduate without taking basic subjects such as math, science, composition, literature, economics, government or American history.

      Despite the lip service university presidents give to the foundation of knowledge, most students find the loopholes in academic programs so that credits can be accumulated without studying basic subjects. As a consequence, the study notes, “colleges are offering ‘little more than a hollow core.’”

      This report surveyed 50 colleges and universities, including all Big Eight and Big Ten universities, the Ivy League, the Seven Sisters Colleges and an additional grouping of 13 colleges to provide institutional and geographical breadth.

      Of the seven basic subjects examined economics fared the worst. Not one of the institutions surveyed requires a general course in economics. Only 12 percent mandate a course in literature, while a mere 14 percent of the colleges require students to study American government or history.

      Is it any wonder Johnny cannot cite a Shakespearean play, explain a supply and demand curve or offer a defense for the separation of powers?

      In fact, none of the colleges surveyed require all seven subjects and only one, Baylor University, requires six. Barry Latzer, the principal architect of the study, said, “This study demonstrates that the colleges have abdicated their responsibility to direct their students—especially freshman and sophomores—to the most important subjects.”

      Most students, as I see it and as this study attests, are wanderers searching through a catalogue for course titles that appeal to them, often a decision based on what is fashionable. The result is hardly a surprise; thousands of students graduating with only a thin veneer of knowledge and yawning gaps in their educational background.

      Many colleges contend that students take courses in subjects other than a major—what is often referred to as “distribution requirements.”

      However, the distribution system allows students to select from dozens, sometimes hundreds, of courses. Whatever their merits, most of these courses are narrowly defined or unsuitable as foundational experiences.

      Needless to say, the report calls for fundamental reform, a reform that moves from an arbitrary smorgasbord approach to systematic requirements reflecting educational foundations.

      The problem at the moment is that college students know very little and don’t know what they don’t know. To ask an uneducated student to select a course of study is to suggest the blind should lead the blind.

      Recently several college students expressed wonderment over why the streets of Venice were so often flooded. Another student asked me whether the American Revolution was based on events in the French Revolution. There is scarcely a professor in higher education who cannot provide similar examples of incompetence. Higher education is a scandal waiting to be exposed. It is rife with “educated incompetents.”

      ACTA has performed yet another valuable service in exposing the hollowness at the core of higher education. It is my profound hope that someone of prominence will adopt this study and convert it into policy prescriptions.

      I’m not sure anyone in the academy will be listening. But it will do university presidents good to know that their empty, but expensive, game is up. We as a society are paying a hefty price to see our students in an uneducated state. Surely it is time for change in the form of real requirements.     Ω

“The World’s becoming a museum of socialist failures.” —John Dos Passos