A Sterling Crisis and the Adenauer–de Gaulle Threat
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Instead, their dollars flowed out of the United States to grab up, ‘on the cheap,’ already-operating industrial companies in western Europe, South America or the emerging economies of Asia. At Ford Motor Company itself, Robert McNamara, an accountant, had taken over corporate control by the end of the 1950s. Increasingly, after the 1957 crisis, large U.S. industries and banks began to follow the ‘British model’ of industrial policy. Systematic cheating on product quality became the fashion of the day. Milton Friedman and other economists preferred to call this ‘monetarism,’ but it was nothing other than the wholesale infestation of Britain’s post-1846 ‘buy cheap, sell dear’ methods into America’s productive base. Pride in workmanship and commitment to industrial progress began to give way to the corporate financial ‘bottom line,’ a goal calculated every three months for corporate stockholders. The average American needed to look no further than his family automobile to see how it worked. After 1957, rather than making the required change to more modern plant and equipment to increase its technological productivity, Detroit began manipulating instead. By 1958, the amount of steel used in a General Motors Chevrolet was cut to half that of the 1956 model. Needless to say, highway death rates soared as one result. The domestic steel industry also reflected this big drop. U.S. blast furnaces poured out 19 million tons of steel for automotive use in 1955, but by 1958 this had fallen to 10 million tons. By the early 1960s, ‘what’s good for General Motors’ was becoming bad for America and for the world. And the American worker paid a lot more for that 1958 Chevy. Slick Madison Avenue advertising, ever-larger tail fins and chrome trim served to hide the reality. U.S. industry had been persuaded to commit systematic suicide, cheating the customer to make up for falling profits. But, like the drunk falling from a 20-story window, who imagines at first that he is enjoying the free flight, most Americans would not realize the real implications of this 1960s ‘post-industrial’ drift for another ten or twenty years. THE DOLLAR WARS OF THE 1960s With higher interest rates to be earned abroad by buying up operating western European companies on the cheap, New York bankers began to turn their back on the United States. Europe was suffering a huge shortage of capital because of the war and the collapse of industry. As a result, Europe was forced to pay excessively high interest rates to
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