Wednesday, June 3

Olbermann flunks econ 101



The point, Mr. Olbermann, was never that an average GM employee's take home pay (pre tax) was $70, but that, due to their total labor benefits package (including what they pay out to former employees), GM's costs per worker has long put them at a competitive disadvantage with the transplant auto companies in right to work states, whose totals are considerably less than that.

Elementary economic analysis tells us that companies at a competitive disadvantage will either lose money or lose market share.

Of course, Olbermann's job is to manufacture outrage. In this he's no better than an O'Reilly or a Michele Malkin. They're all right about things some things some of the time, but at least as likely to be peddling nonsensical outrage.

The reality is that to be competitive GM and Ford, due to their higher unionized labor costs, have been obligated continue constructing big-ticket vehicles with lower per-unit labor costs, i.e. pickups and SUVs. Smaller, fuel-efficient cars like the Ford Focus are actually built and sold at a loss in order to bring the companies' average fuel efficiencies within federal standards.

Their competitors, on the other hand, can have lower labor costs and can actually produce small cars at a sufficiently low price point while remaining rlatively profitable.

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