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November 19, 2008


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Milos Sugovic

Matt, good blog post. Inefficiencies can be sustained for only so long with wasteful consumer behavior and government incentives, not to mention unionization. Look at the difference in compensation per hour at U.S. auto plants between the Detroit-3 and the Japanese-3: http://gregmankiw.blogspot.com/2008/11/cost-differences.html . There’s a 29$ pay gap propped up by collective bargaining. On top of that, foreign producers are weathering the same storm and facing the same decrease in quantity demanded, and they’re not complaining. So it’s no surprise the U.S. auto industry is under attack.

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