Bush Pardons Auto Manufacturers

-

2007_chevy_suburban-thumb.jpg
With just 31 days left in his term, President Bush has pardoned Ford, Chrysler, and General Motors for years of misdeeds, inefficiency, uncompetitiveness, and poor quality.
The White House will give the auto manufacturers $17.4 billion in low interest loans.
That doesn’t mean that Chrysler will keep the switch turned on at 30 plants it is completely shutting down over the next 30 days. It doesn’t mean that any of these firms will stop laying off American workers.
And it doesn’t mean that this loan money from the government will stop the offshoring of American jobs overseas.
— Steve Clemons
Update: An ABC News Alert stated that the bailout package from the White House totals $17.4 billion, but CNN reports that it is $13.4 billion. When the White House issues a formal release, I’ll correct the number above.

Comments

50 comments on “Bush Pardons Auto Manufacturers

  1. rich says:

    “Ford bests Toyota in fuel efficiency and these cars are built by UAW labor.”
    For the first time in 30 years. Ford took 30 years to respond to market demand. Thirty years to decide it should maybe compete in the market. Thirty freakin’ years.
    Further, 36/41 mpg vehicles were available back 25 years ago, so it’s worth questioning why this is viewed as ‘progress’. That’s the best they can do after VW and Toyota reached that same fuel-efficiency 25 years ago? They’re just not trying.
    It’ll also be interesting to read the reviews and see how reliable they are.

    Reply

  2. WigWag says:

    Ford bests Toyota in fuel efficiency and these cars are built by UAW labor.
    New York Times
    December 23, 2008, 6:43 pm
    Ford Fusion Hybrid Is Rated at 41 M.P.G.
    By Jerry Garrett
    LOS ANGELES — Official fuel-economy ratings from the Environmental Protection Agency are in for the new 2010 Ford Fusion Hybrid, and Ford says it is “America’s most fuel-efficient midsize car with a certified 41 m.p.g rating in the city and 36 m.p.g. on the highway.”
    Ford had offered the Fusion Hybrid to journalists earlier this month in Southern California for fuel-economy runs of their own. Ford said at the time that the certification process by the E.P.A. was incomplete, but that the company expected the vehicle to achieve “at least 39 m.p.g.” Many of the journalists who tested the vehicles actually achieved much better fuel economy than that.
    In my testing of the car, a system of gauges and fuel-usage meters helps coach the driver on how to increase and optimize fuel economy.
    Meanwhile, Ford crowed about the Fusion Hybrid’s unexpectedly strong rating.
    “The Ford team set the bar high – to develop America’s most fuel efficient mid-size sedan – and that’s what they delivered,” said Derrick Kuzak, Ford’s vice president for global product development in a press release.
    Ford also emphasized that the Fusion Hybrid’s E.P.A. rating bests its main competitor, the Toyota Camry Hybrid, by “8 m.p.g. in the city and 2 m.p.g. on the highway.” The Fusion’s city rating also is one mile a gallon better than the Honda Civic Hybrid. The Fusion also crushes anything General Motors and Chrysler have to offer.
    No pricing has been announced, but journalists were told at the test drives to expect something in the mid-$20,000 range. In addition to the Fusion Hybrid, the similar Mercury Milan Hybrid will also be offered. Each vehicle is programmed to allow their electric motors and nickel-metal-hydride battery packs to propel them up to 47 miles an hour without the aid of its 2.4-liter 4-cylinder gasoline engine. Engineers said the vehicles could travel up to a mile in all-electric mode; the gasoline engine would kick in, regardless of speed, when the charge level went below an acceptable level.
    It will be interesting to see if those who have clamored for more fuel-efficient vehicles from American automakers and less reliance on foreign oil will support these Ford hybrids by actually buying one when the cars go on sale in early 2009.

    Reply

  3. JohnH says:

    “1. You don’t dump 2 to 3 million workers onto welfare rolls during a recession.” Great! Put the companies on life support and hospice care for three years. Then let them die a natural death.
    “2. Odds are that the Big Three (or at least GM and Ford) will emerge from the current economic down-turn as major players in the auto market.” Very, very doubtful, given their current trajectory. There is almost nothing to suggest that the Big 3 will ever become leading edge competitors again. The culture at these companies is simply not conducive to it. This becomes even less likely if they become dependent on welfare.
    Far from being the spoiled child of management, I’ve been in charge of strategic planning for major divisions of a Fortune 200 company.
    Which reminds me of something the President of our largest division once said, “This company couldn’t kill a screaming dog.” The Big 3 can’t kill their screaming dogs either, which is why they’re in the state they’re in. Sometimes a charitable outsider has to do the dirty work.
    Let’s not prolong the agony.

    Reply

  4. Franklin says:

    JohnH,
    What’s the source for your numbers? Do those numbers include suppliers like Delphi, which now operate independently from GM?
    My argument is NOT that the Big Three are Too Big To Fail.
    My argument is two fold:
    1. You don’t dump 2 to 3 million workers onto welfare rolls during a recession. That’s a recipe for disaster, and it will cost taxpayers more than a simple bridge loan. Even if the auto fail three years from now in a recovering job market, the bridge loan is money well spent.
    2. Odds are that the Big Three (or at least GM and Ford) will emerge from the current economic down-turn as major players in the auto market. Much like the Chrysler bailout in the early 80s taxpayers will see a return on investment on the assistance that they provide. Once again, only FOUR car models increased market share in 2008 – THREE of those were from domestic autos. GM and Ford also have good product lines in the pipeline. They also create more jobs per domestic market share than foreign transplant operations.
    My argument is that it is stupid to enact policies which cost taxpayers more money in both the short and long-term when there are measures which can prevent this from happening. The second prong of my argument is that it is stupid to enact policies which undermine the competitiveness of the U.S. economy over the long-term (e.g. by cutting domestic industries out of the automotive and new energy fields).
    Krugman, Robert Reich, et al – seem to lean in this direction as well (e.g. that federal assistance to domestic autos conditioned on certain measures makes sense).
    People who rant against “the corporations” in a knee-jerk way in my experience typically tend to be the kind of spoiled kids who have parents that RUN those corporations. They have the luxury of dealing with these questions in some kind of abstract theoretical way, because these kind of decisions are not real to them — in the way that they need to be.
    Maybe you are cool dumping 2 to 3 million workers on the unemployment rolls over the next year, but I doubt that you’d have the guts to go up to those families over the next year or so and admit as much to their faces.

    Reply

  5. PW says:

    WigWag — I think it was the Ed Schultz show sometime last week — radio on in the background so I can’t be precise. But it’s true that, while there are still blowhards who’ll support a huge corrupt corporation no matter what it does, there are plenty of others, from left to right, who are smarter. My “problem” is that I think some unions, while ideal in concept, have tended to behave like corrupt corporations at times. That may or may not apply to the UAW, but it certainly explains the wariness of many decent Americans about unions.
    JohnH @ 11.:48: You’re entirely right.

    Reply

  6. JohnH says:

    Franklin, GM shed 85% of it domestic workforce in the past 30 years and they are on course to lose another 85% over the next 10 years because of their failed business plan.
    http://www.salon.com/env/feature/2008/11/12/barack_obama_detroit/
    Your argument is that GM is too big to fail. My argument is that if you’re too big to fail, you’re too big. Market concentration inevitably leads to concentration of power, which is dangerous to both democracy and capitalism.
    I’d rather US taxpayers money to put GM on hospice care to ease their demise. Give golden parachutes to the workers, not to management. It’ll be cheaper in the long run to be rid of a bloated, un-American company that trashes jobs and lobbies to pollute.

    Reply

  7. Franklin says:

    JohnH,
    Just noticed another thing — based on the Wall Street Journal numbers only four models saw increased sales in 2008.
    Three of the four were from domestic manufacturers (e.g. the Chevy Malibu — which saw a huge jump in sale numbers; the Ford Focus and the Ford Fusion; the Honda Civic was the only other vehicle to see an increase in sales above the 2007 numbers).
    In other words, the 2008 sales numbers for compact and mid-sized vehicles suggest that Ford and GM have a viable future just based on sales of existing models (e.g. not factoring in cars that are in the pipeline or development).
    Also look at the Wall Street Journal numbers for domestic autos (e.g. cars assembled in the U.S.)
    No one even comes close to GM in terms of domestic production. Most of the other major autos split production 50-50 with domestic and foreign production operations.

    Reply

  8. Franklin says:

    JohnH,
    Some additional evidence — the U.S. autos have lost domestic jobs as its lost domestic market share. However, increases in hiring by transplant operations, which have increased market share in recent years, have not off-set the lost domestic auto jobs.
    FWIW, total foreign hires combined according to the federal agency the International Trade Administration amount to 63,000 workers. Keep in mind this is for the ENTIRE combined foreign transplant market, which together enjoys more than 50 percent of the market share.
    http://www.trade.gov/static/auto_reports_jobloss.pdf
    Your GM employment numbers also do not include domestic auto suppliers like Delphi, which primarily work with domestic autos. (They also omit Chrysler and Ford — which would be impacted by a GM failure).
    Market share numbers . . .
    http://online.wsj.com/mdc/public/page/2_3022-autosales.html#autosalesE
    The take away — domestic autos employ more U.S. based workers per market share than foreign transplant operations.
    In other words, if the Big Three collapse, the jobs that they lose will not be fully off-set by new hires from foreign transplant operations.
    In other words, by pushing for the failure of domestic autos you are arguing for the loss of at least one hundred thousand domestic auto jobs — including many of the higher end engineering and development jobs.

    Reply

  9. Franklin says:

    Right — with one-third of the U.S. based market, GM still employs MORE workers in the U.S. than all of the foreign transplant operations COMBINED. Even by 2012 it will still have more U.S. based employees than the transplant operations COMBINED.
    The foreign transplant operations account for more than 50 percent of the current U.S. auto sales. In other words foreign transplants create fewer jobs per market share than GM, Ford, and Chrysler do.
    Effectively the evidence that you provide does not support your own reasoning.

    Reply

  10. JohnH says:

    BS ALERT!!! “You say the Big Three … have been a huge source of job creation in the U.S. — not just historically, but at the present time.”
    Fact: GM’s US employment peaked at 618,000 in 1979. Now it’s 96,000 and slated to drop to 65-75,000 by 2012.
    I rest my case: “I see no reason to provide welfare to a corporation that is committed to the destruction of American jobs. The bail-out mostly rewards bad behavior, which assures that it will happen again and again, at taxpayer expense.”
    It’s better to support industries that will create jobs than constantly trying to revive ones that are on their deathbed.

    Reply

  11. Franklin says:

    JohnH,
    GM is moving some of its operations off-shore — it is also expanding its market reach.
    e.g. manufacturing facilities in Brazil, Canada, Germany, Mexico, and China are geared towards serving the needs of local markets. Some components are made in those markets and shipped to the U.S. in some cases components and/or elements that have been designed and engineered in the U.S. are sent overseas for assembly.
    It still remains the most American of the autos in terms of domestic content and domestic job creation (it and Ford by a wide margin).
    You’re reasoning is just bizarre in my view.
    You say the Big Three are committed to the destruction of American jobs, yet they have been a huge source of job creation in the U.S. — not just historically, but at the present time. The federal assistance is additionally conditioned on bolstering DOMESTIC operations.
    There’s a whopping contradiction in your reasoning.
    Either you believe salvaging U.S. jobs is a priority, or you don’t. If you think the Feds should let a domestic industry fail — and ceded jobs to overseas competition — why not say as much? Why mischaracterize the federal intervention (both in terms of its stated purpose and its likely effect)?

    Reply

  12. rich says:

    wigwag,
    I didn’t call you anything. I merely pointed out you go after whomever you think is the weaker target rather than the responsible parties, displaying standard, but not admirable, primate behavior. Like many a homo sapien.
    “Which side are you on,” wigwag? “Which side are you on?” Are you sure you’re the one with labor cred here?
    Because PW is right: plenty of American autoworkers drive Toyotas or Hondas. And plenty of truck-drivin’ blue-collar conservative has cursed a blue streak over the quality of vehicle Detroit has foisted off as reliable.
    Here’s the deal: I’m all for the UAW and it’s fight to get a fair deal from GM et al. But the UAW is just as much a dinosaur for letting the Big Three sink this far, and for not finding a way to unionize southern plants. Cut a deal with Honda and Toyota; make concessions to Detroit contingent upon turning out competitive vehicles.
    Because as it is, they’ve yoked their survival to the Big Three’s anvil, and Detroit and George Bush are busy throwing it overboard. Or didn’t you realize that was the point? Within a year, they’ll be importing ‘American’ cars — and selling ’em to out-of-work autoworkers.

    Reply

  13. ... says:

    meant to say you suggested they “”weren’t”” the agent of change responsible when indeed they are.. some proof reading on my part would help!

    Reply

  14. ... says:

    Franklin quote >>The natural disaster analogy holds in the sense that most people negatively impacted by the crisis are not agents of the crisis<< i would agree, however the way you initially used the metaphor i understood to suggest that the private banking cartel (known as the federal reserve) were indeed the agents of the crisis and they have been rewarded for creating this mess.. more attention needs to be paid to where the 700 billion is going relative to where the 17.4 billion is going.. however with the dumbing down of america you will notice who is paying more attention to what..

    Reply

  15. WigWag says:

    “The second-biggest baboon (or he who perceives himself as such), rather than challenging the dominant alpha male, scurries over and beats up the runt baboon to reassure himself and shore up his self-esteem and perceived status.”
    Rich, I must say I am very impressed by your knowledge of animal psychology. It’s one of the reasons I like the Washington Note; you never know what you’re going to learn. As for being compared to a baboon, all I can say is that I’ve been called worse.
    PW, I don’t know anything about the talk show you were listening to but I know plenty of UAW members; none of them would ever buy a Toyota or a Honda. In fact, anyone who would buy an American made foreign car under the current circumstances is the functional equivalent of a scab. Scabs aren’t progressive, and if they think they are, there’s a word to describe their delusion; the word is hypocrite.
    Oh, and Rich, as long as your so fond of animal metaphors, there’s an animal that scabs (and their fellow travelers) are frequently compared to. But the animal isn’t a primate, it’s a rodent.
    We call them rats.

    Reply

  16. PW says:

    In response to WigWag and his crit of progressives buying Toyotas and the like, this scalawag of a progressive was listening to another progressive being interviewed on a talkshow during the past week. The interviewee works on the assembly line at GM and drives a Toyota to work. Did he catch a lot of flak from fellow workers in the parking lot? Nope, a lot of ’em drive those offensive Hondas and Toyotas from non-union plants.
    I don’t know what this GM worker’s exact reasons are for buying a Toyota, but I know mine for buying a Honda. The environment and my personal economy are more important to me than the management of the UAW. Nothing wrong with UAW workers or unions, both of which I support in most respects, but the UAW management and workers have seen this debacle coming for years and should have made a UAW-size stink about the inevitability of GM going down the tubes.
    In today’s NYTimes, an analysis of the Big 3 bailout has this:
    “Ford, which did not seek federal assistance because its cash reserves are stronger, is adapting two European models, the Focus and the Fiesta, for the American market, and is about to introduce a hybrid-electric version of its Fusion, a family sedan.” So Ford has been relatively smart and is getting smarter. It probably wouldn’t have been in any trouble had it not been for the credit problem.
    However, “Chrysler discontinued its only hybrid model earlier this fall. It is relying on Nissan of Japan to develop its small cars.” Which evidently it couldn’t figure out how to do for itself and the American worker. And now it may join GM. Hand in hand, GM and Chrysler, moving towards terminal bankruptcy! Together!
    And GM? GM appears to be in perpetual manana mode, propped up for an additional 90 days thanks to an administration which has been as badly managed and incompetent as GM’s incomprehensibly addlepated, greedy top officers and, most likely, its board. Everybody’s very aware of the irony of Wilson’s “What’s good for GM is good for the country,” after what both GM’s and the country’s management have put us through for the past eight years.

    Reply

  17. rich says:

    WigWag,
    You’ve contradicted yourself on this issue eight ways ways from Sunday. Ok, at least three ways.
    You blame SUV owners — and Prius-drivers. Which is it? It can’t be both.
    Do you really think Detroit would’ve changed its product line without losing market share to competitors? The Big Three didn’t really change its ways even AFTER the market for fuel-efficient vehicles was proven, and market-share lost. First you condemn SUV consumers, then you condemn consumers who seek a Third Way when Detroit only offered Coke or Pepsi. You can’t have it both ways. What do you expect consumers who DO demand a lighter footprint to do? Who DO make rational economic decisions and do consider externalities? Buy gas-guzzling crap anyway? You know that’d change nothing — even though you identified consumer demand as the problem, you can’t admit it is the solution.
    Re union labor, are you actually asserting that progressives should be owned by the UAW? That we should toe your ideological line? Forfeit? NO way in hell does anyone driving a non-union car forfeit their creator-endowed right to criticize George Bush, or you.
    Seriously, your mistakes are piling up: I’m as pro-labor as they get, but buying Detroit-made crap to support the UAW would just hold us all captive to the same gas-sucking product lines they’ve refused to change all along. Nothing would change. Your methodology is worse than useless. You’ve no power here to define an ideological line or demand obesiance. If the UAW is your sacred cow, why didn’t they demand competitive vehicles, prices, mpg? If only to save their own jobs? Your prescrition would just enable their co-dependency and denial of Detroit AND the UAW.
    No, wigwag, you badly err in presuming to blame those who ARE doing something to make a difference. Your tactic shows no courage: rather than hold those at fault responsible, you prefer going after whatever appears to you the most vulnerable target. Which exposes the flawed hierarchy that informs your comments and attitude: it’s baboon-troupe behavior, just as described by William Burroughs. The second-biggest baboon (or he who perceives himself as such), rather than challenging the dominant alpha male, scurries over and beats up the runt baboon to reassure himself and shore up his self-esteem and perceived status. That’s what you do. So be careful where you point the finger. If Bush or Detroit are at fault, you need to go after them. And you’ll have nothing to say about it when others justifiably go after those responsible for the current catastrophe.
    If you’re serious at all, go after Sen. Bob Corker for subsidizing Honda and Toyota plants to the tune of $500 million+, while denying a lifeline to Detroit and holding our entire economy hostage to break the UAW. Go after the problem. Make sure southern auto plants are unionized.
    But don’t presume to police those of us who are taking responsiblity. Environmentalists have never claimed to pure, and as humans are by definition part of the problem — they’re just willing to do something about it. That does not make them vulnerable to your irrational if ineffectual attacks. So, please, a little clear thinking.

    Reply

  18. Tintin says:

    If you read Robert Reich’s Supercapitalism, he shows how all of this
    is interconnected–manufacturers, consumers, technology,
    Congress–with no one really at fault. In fact, the perps are often
    the victims and vice versa.

    Reply

  19. WigWag says:

    “First you’re cryin’ about the Prius-drivin’, latte-sippin’ liberals who DO do something to lighten their impact on the planet — and the next thing ya know, you’re blaming those Red-State suburban-livin’ SUV-drivin’ Americans…”
    Well there’s plenty of blame to go around, Rich. But I’ll tell you one group of people who are certainly to blame; that’s so called progressives who convince themselves that they’re good people and then go out and buy cars made by non-union labor.
    Anyone driving a car that wasn’t built by UAW labor but was instead built in one of those modern Southern plants (or the non-union Honda plant in Ohio) constructed with huge tax subsidies. forfeits the right to criticize the economic policies of George Bush and his cronies. Or if they persist in criticizing Republican economic policies, they forfeit the right to be taken seriously.

    Reply

  20. PW says:

    “GM opens second India plant” … IHT 9/2/08 …
    “General Motors opens new plant in China” … Financial Express 12/17/08
    Those are just two on a list of Ford and GM plant openings elsewhere in the past weeks. I know these are complicated issues, but doesn’t that give you a little jolt?

    Reply

  21. JohnH says:

    Franklin said, “The purpose of the bailout is to salvage a domestic industry and jobs in the domestic market.” And the purpose of the Iraq War was to fight Saddam’s weapons of mass destruction.
    In fact, GM is shifting more and more of its production off-shore, and I see nothing in the bail-out that will keep jobs in America. Over the very short term, before, GM can fully implement its off-shoring plans, some jobs will be kept in America, which is definitely good.
    I see no reason to provide welfare to a corporation that is committed to the destruction of American jobs. The bail-out mostly rewards bad behavior, which assures that it will happen again and again, at taxpayer expense.

    Reply

  22. rich says:

    questions @ 1:59pm
    We have to make it both rational and emotionally correct to buy mini and micro cars . . . train tickets for longer trips. The key is to set up the game so that each decision-maker along the path can do the right thing while preserving rationality.”
    That’s what I do for a living.
    “Work on this project instead of blaming Detroit, the executives, the union members, the consumers, the roads….”
    Only some of the decisions you cite are rational, and the ones that are hardly relieve each actor of responsibility. Greenfield development may be easier to rationalize because that’s the only thing developers have ever done or known, but that’s doesn’t justify subsidizing a process that sucks the life out of existing cities and inner-ring suburbs.
    Zoning regs and bad habits have channeled new construction to the tried-&-true rather than to functional, efficient and creative placemaking. There are only so many housing choices available — and not many of them are emotionally appealing.
    Same with Detroit: there was nothing stopping the Big Three from making fuel-efficient vehicles, or more profitable models, or expanding market share by aiming for a different demographic. It’s hardly rational. Easier, but making the costliest vehicles doesn’t relieve them of the responsibility for making the changes that any rarional actor would’ve made 30 years ago.
    So there’s plenty of richly deserved blame for automakers, developers, systemic constraints. And consumers. It’s hardly rational to drive a land yacht to distant suburbs every day: Housing + Transportation costs equal 48% or greater of income for those living in outlying suburbs. Those living within the city and inner-ring suburbs pay considerably less. It’s no longer possible to drive to an affordable house by commuting further and further.
    Don’t get me wrong: I’d enjoy a moderately sized SUV too, but then, I haven’t driven my car in three years, either.
    The challenge of balancing what’s rational and emotionally satisfying, but it’s never been about what’s rational.

    Reply

  23. Franklin says:

    JohnH,
    ” . . . why should the US government rescue an industry to create jobs overseas?”
    1. The purpose of the bailout is to salvage a domestic industry and jobs in the domestic market.
    The Big Three with less than 50 percent of the domestic auto market employ 500,000 people in the U.S. — not including suppliers, other support industries, and local communities.
    The numbers that I’ve seen for foreign competition amount to about 50,000 jobs in the domestic market for an even larger share of sales.
    U.S. autos generate more work for the domestic economy and they’re still competitive price-wise with foreign autos (these days they’re also competitive in quality and other measures as well).
    As far as a car’s content goes a 13 percent difference could be significant depending on what the content entails. Does the 13 percent difference involve a labor intensive process? Are engineer and product development jobs factored into the car content equation?
    2. Why support manufacturing — and in particular the autos?
    Because, the technologies that companies develop for the domestic market are going to come in play in the global market as new economies start coming on line in Asia and Africa. The auto industry ties into energy, global warming, and energy security industries too — which is one reason that I see it as important to provide some support to the domestic industry to help get it through the current times.
    3. The other thing to ask is: What’s the alternative?
    In the context of a recession you dump 2 million people onto the streets, prolong the recession, and add to the overall cost of the recovery. That’s just not smart policy.
    Anon 2:27 AM
    The natural disaster analogy holds in the sense that most people negatively impacted by the crisis are not agents of the crisis (I would include the auto industry in that equation – domestic autos by and larger didn’t create the current financial system or play in the derivative markets).
    Obviously we aren’t going to send the reserves into Michigan to help up with recovery, but there will be aspects of the response that are similar – and consequences to inaction that are also similar to that of a natural disaster (e.g. a lot of damage can happen after the storm hits if support services aren’t provided in a timely fashion).
    The question at this stage is: How can we contain the damage, so that a recovery – preferably a quick one – is possible?

    Reply

  24. ... says:

    JohnH – thanks for the response.
    Franklin you have offered an analogy that is so far off the mark as to influence yours and others thinking in an inverse manner then the reality of it… here is your quote >>The collateral damage from the financial crisis can be viewed in a similar light to a natural disaster. We aren’t talking about supporting a core industry that’s failed during an economic expansion. We’re talking about a core industry that’s getting pummeled by what’s likely to be an even more prolonged recession than the one that took place in 1982.<<
    the financial industry is built on the premise of inflating until it bursts.. this is why the federal reserve is always talking about ‘inflation’ and how it is ‘under control’.. we are not talking about natural disaster here.. we are talking about a private bank that masquerades as an extension of the gov’t – thus the name ‘federal’ reserve, when in fact it is directly responsible for the state of affairs financially… to suggest it is something else is to be naive on the nature of finances…
    why compare the financial bailout and the auto industry bailout you might ask… the one is a macrocosm for the other and neither is natural.. both are man made, with one being much more opaque, while the other clearly more open to scrutiny.. that is just the way they like it too…
    meanwhile the bullshit never ceases… lets get righteous over what is fair and not fair, or capitalist verses socialist and blah blah blah… what a joke.. maybe suckers are born every 30 seconds in the world today…

    Reply

  25. JohnH says:

    Franklin–and why should the US government rescue an industry to create jobs overseas?
    “In model year 2006, vehicles built by foreig­n-owned carmakers at assembly plants
    located in the U.S. and Canada for sale in the U.S. had 66.2% domestic content. This level is only slig­htly below the 79.4% recorded by the Detroit Three. Furthermore, the g­ap in the level of domestic content between foreig­n-owned carmakers and the Detroit Three has narrowed substantially since 1997, when foreig­n-owned carmakers had only 52.5% domestic content compared with 85.7% for the Detroit Three.
    This converg­ence resulted from two simultaneous trends: increasing­ domestic content of foreig­n cars assembled in North America and decreasing­ domestic content of vehicles assembled in North
    America by the Detroit Three.”
    http://209.85.173.132/search?q=cache:_7N6_65xlwoJ:chicagofed.org/publications/fedletter/cfloctober2007_243.pdf+general+motors+%22domestic+content%22&hl=en&ct=clnk&cd=1&gl=us
    The upshot of the bail-out will be more “Big Three” jobs overseas. Clearly this helps American brands and their owners, but what long term benefit is there to the American economy? At what point do you stop subsidizing American brands and American corporate management that have long since lost their loyalty to America?

    Reply

  26. Franklin says:

    Sweetness,
    Great comment — and yes, Toyota jumped head-first in the big truck and SUV market in the U.S. They’ve also taken a bath in recent quarters. It also lobbied against raising CAFE standards.
    Toyota’s advantage in the current economic climate is that its vehicles were more profitable. The reason for Toyota’s larger profit margins is two-fold:
    1. Better perceived value. The Big Three’s cars typically sell/list for about $1,500 less than the top line cars by Honda and Toyota.
    2. Legacy costs. The Big Three’s legacy costs associated with pensions and health care add about $1,000 to the cost of vehicle. The Big Three and UAW have negotiated terms that address these issues. Through buyouts and shifting health care costs to the UAW the Big Three were on track to get where it needed to be by 2011. Now they’ll likely have to accelerate those plans.
    3. Executive compensation. This is probably a cost factor on the margins, but the Big Three’s execs like most of corporate America pull in about 350 times the income of their lowest salaried worker; in Japan the ratio is closer to 12 to 14 times the lowest salaried worker.
    This is a back of the envelope calculation, but Toyota and Honda must be pulling in a per car profit margin that is about $2,000 to $2,500 higher than the Big Three. Multiplied over the years times millions of cars that adds up to real money.
    JohnH,
    There are substantive differences between the auto bridge loan and the loans given to the financial sector.
    1. Executive and employee compensation restrictions for the autos; none for the banks! In fact, Goldman Sachs is dishing out six-figure bonuses this year for all of the good work its execs didn’t do. In the case of GM and Chrysler, their execs are restricted from receiving bonuses until the loans are repaid.
    2. Dividend restrictions for Big auto shareholders none for the financial Bigs! No dividends for GM shareholders until the government loans are repaid. No conditions on the loans to the financial industry.
    3. Bond-holder debt. The Feds are requiring that the autos renegotiated liabilities down two-thirds. Did the Feds ask the financial bigs to do the same? Of course not!
    Keep in mind too:
    1. The difference in scale between these two packages. GM and Chrysler are getting less money than we pay every two months to maintain an occupation in Iraq — the compensation is based on loans too with the autos. There’s some risk to taxpayers if GM and Chrysler go under, but odds are taxpayers will see some ROI.
    2a. The domestic benefit of the two packages. I’m someone who believes that some kind of deal was also necessary for the Financials — we had to stabilize the financial markets through some kind of intervention. I’m ticked though that we didn’t have a better set of negotiators in the White House and in Congress. In the case of GM and Chrysler loans taxpayer interests were part of the equation. In the case of the Financials they weren’t.

    Reply

  27. JohnH says:

    No difference from the Wall Street bail-out. The federal government has become the money laundering subsidiary of Corporate America, which can’t make money legitimately, so it strips money from ordinary citizens via taxes, debt (future taxes), and laws legitimizing corporate scams. Corporate America would take all the money directly, but the federal government has better enforcement mechanisms.
    This is the agogee of capitalism–government of Capital, by Capital and for Capital. Not exactly what the Founding Fathers had in mind.

    Reply

  28. ... says:

    JohnH quote >>The only thing that a bail-out guarantees is that they’ll become Welfare Queens, constantly sucking off the teat of the federal government.<< and how does that differ from the wall st bailout John???

    Reply

  29. JohnH says:

    Wigwag said, “before you make any comment about how terrible Ford, General Motors and Chrysler are, take a look at the car(s) in your garage or your driveway.” If they’re American brands, you should also take a look at the percentage of domestic content. My bet is that it’s very low. I own all Japanese, because they last 200K+ miles. One was made in America. I bet the domestic content isn’t all that different regardless of the nationality of the brand.
    So why subsidize the domestic brands, when they just off-shore most everything anyway?
    The only thing that a bail-out guarantees is that they’ll become Welfare Queens, constantly sucking off the teat of the federal government.

    Reply

  30. Don Bacon says:

    I’m definitely not a financial wizard but with GM, Ford and Chrysler 2007 revenues at $181B, $172B and $146B respectively (roughly $500B total), $17.4B seems like a drop in the bucket, probably not even enough to cover executive bonuses.

    Reply

  31. Sweetness says:

    I tend to go with Questions and Franklin on this one. Not being
    an expert on any of this, but a driver and an observer, here is
    what I’d say:
    • The Big Three lost share primarily because they put out lousy
    vehicles in the 1970s and, I guess, into the 1980s. This
    impression has STUCK long past the point when the problem
    was (supposedly) corrected. That’s the problem when you trash
    your brand. It’s hard to recover. Perrier USED to be THE brand
    for bottled water in America; now you hardly see it. Other folks
    swoop in and take your place and fight to hold on to it.
    • So Detroit’s problem isn’t so much the size of its vehicles, but
    their perceived quality.
    • When gas got cheap again, Americans DID go back to big cars.
    The Ford Explorer did great; so did the F150 truck; Chrysler did
    great with their vans. Americans have ALWAYS liked BIG cars.
    The VW carved out a “small” niche in the 1960s, but small
    foreign cars didn’t gain a toehold until gas got cheap and
    Detroit’s quality faltered. Big cars is our default position, or has
    been up to now. Other countries like small cars, not just
    because gas has always been expensive, but because space is at
    a premium. Not so here.
    • So as soon as gas came back down, many of us went for the
    big car again. If the quality-perception had been better, Detroit
    would have done even better. Did Detroit force Americans to
    buy big cars–or were consumers simply buying what Detroit
    offered them? This is hard to answer. But since Americans had
    a choice of smaller, foreign cars, but many still bought the big
    American ones, it’s fair to blame some of this on the consumer if
    you’re looking to blame someone.
    • Wig is right to point to our aversion to taxes, like a gas tax,
    that might have prevented some of this. Taxes is an easily
    demagogued issue, so it’s hard to say anything about it except
    that. No one wants to pay higher taxes, and it’s easy to get a
    whole bunch of Americans frothing about the issue. Also,
    simply raising taxes on gas to change Americans’ buying
    behavior in this instance seems a bit perverse. I can see
    encouraging home ownership, but taxing folks who buy big
    homes? Not unless you can make a cogent and generally
    accepted argument for it. Otherwise, you’re way out ahead of
    public opinion, and the taxes will seem onerous, capricious, and
    punitive to many folks. Get the demagoguery going, and
    politicians will run for the hills, even if it’s “the right” thing to
    do.
    • Seems to me that I remember a loophole in the Cafe standards
    that allowed SUVs to be treated as trucks. Something like that.
    That also gave Detroi an incentive to make SUVs over other
    brands. And heck, Americans WERE buying the hell out of them.
    And as Questions points out, as soon as the roads become
    crowded with these behemoths, a large number of families are
    going to buy one as a defensive measure–so they can see the
    road ahead and have a chance of surviving in a crash.
    • Like most of these issues, it’s very hard to pinpoint a “culprit”
    with any reasonable credibility. It’s a cycle with everything
    intensifying everything else. For example, if we weren’t
    experiencing a credit squeeze now, people would be going back
    to SUV and filling their tanks with 1.64 a gallon gas.
    • I guess the last thing to say is, didn’t the Japanese make big
    SUV’s too? And trucks? They tried to get on the big car
    bandwagon as well. It’s just that they had a lot of other options
    for buyers and a higher perceived quality.

    Reply

  32. chophouse says:

    Wig — “Toyota and Honda are doing better than Chrysler and General Motors not because their executives are smarter. ”
    No wig. It’s because they build a BETTER car. ONe that people can depend on and expect to drive for 200k miles with great mileage. That’s why. Your argument about culture fails because if it were true Honda, Toyota, Nissan would be having no success in this market.
    This is just a gift of money to mismanaged companies. It will NEVER be paid back and everyone involved knows it.

    Reply

  33. Franklin says:

    Tosk59,
    Yes, increases in productivity can result in job losses. However, what we’re dealing with now are losses in consumption, which are driving job losses.
    The former is much more dangerous for an economy, because it has a cascading effect. At a certain point job losses beget more job losses.
    When a hurricane hits Florida or the Gulf Coast we don’t blame workers for having put their livelihood in danger through reckless negligence and poor business practices. We put money into the communities to help industries get back on their feet again.
    The collateral damage from the financial crisis can be viewed in a similar light to a natural disaster. We aren’t talking about supporting a core industry that’s failed during an economic expansion. We’re talking about a core industry that’s getting pummeled by what’s likely to be an even more prolonged recession than the one that took place in 1982.

    Reply

  34. Tosk59 says:

    Sam also said “… Sure, a few million will be thrown out of work and have to survive by their wits or perish…”
    Result of greatly increased productivity (again US highest in the world), takes few people to make more. Note, as manufacturing productivity has increased in China millions of Chinese have lost manufacturing jobs, they just haven’t got around to blaming some other country for their plight (as we have).

    Reply

  35. Franklin says:

    A few points:
    1. Ford isn’t requesting any financial assistance at this stage. The only reason they’re mentioned in the same breath as the other Big Two is that they’re reliant on the same suppliers.
    2. Yes, the Big Three lost market share because they produced some crappy product in the 1980s and the 1990s. In recent years each of the manufacturers has raised the bar considerably in terms of quality and has product lines by Toyota and Honda (Chrysler less than Ford and GM – but Ford and GM have some good product lines currently available and some intriguing stuff just over the horizon. e.g. Ford Fusion hybrid in 2010 looks pretty awesome, the Chevy Cruze is a 40 mpg gas car, plus there’s the Volt, which may or may not materialize).
    3. The Big Three wouldn’t be where they are now – even having lost market share – if the economy and credit markets hadn’t gone into near melt-down. If the economy was expanding, odds are there would be no need for any kind of bailout. The Big Three may have some responsibility for high gas prices, but they were not the central players in the financial collapse.
    4. GM’s problems were exacerbated by transition cost, which were eating up cash reserves before the oil shocks and credit market shocks hit. Ford made the pivot earlier starting in 2006, and consequently is in better shape than GM and Chrysler.
    Pretty much every major auto manufacturer is likely to need some support from home governments. Even foreign governments like Canada, and Brazil have provided assistance to Big Three subsidiaries and operations within their borders.
    It’s true that workers are going to lose jobs – the bailout alone won’t save everyone. But it will buy some time though for support industries, many line workers, and for mid-level jobs in product development and engineering. The consequences of having abandoned the Big Three would have been much worse.

    Reply

  36. Tosk59 says:

    Sam said: “… Maybe America needs to get out of the manufacturing business. We don’t seem to be very good at it anymore …”
    Wrong, the US still has the highest manufacturing output of any country in the world… e.g. see http://tinyurl.com/4gzw3m It’s just that other countries are narrowing the gap.

    Reply

  37. TonyForesta says:

    Nice post WigWag. The TARP funds were handed over to the thieves, swindlers, pathological liars, and predators on Wall Street with no debate, no review, and little discussion other than dismay at the monsterous size of the request.
    No CEO, no trader, or analyst, no colluding regulator, no one at the Fed, or Treasury, – no one in the finance sector has been held accountable for a perpetuating, exacerbating and cloaking a monsterous collective Ponzi scheme (irredeemable debt economics) that has driven the American economy to the precipice and the very real possibility of collapse. Before the great unwinding, all these pathological liars, and mother pathological liars (bush) were pimping and bruting the pathological lie that the fundamentals of the economy were sound, that turmoil was a normal ebb and flow of market, that they were optimistic, that markets are self correcting, that there was no recession, and that anyone mentioning crisis, collapse, or depression was a lunatic, effete, and defeatest. They lied repeatedly and incessantly until the horrorshow math could no longer be cloaked, and they came begging like frightened children for an immediate $700bn in tax payer dollars to prevent the collapse they created and had cloaked and denied only days earlier.
    Paulson came begging before congress with a two page analysis seemly scribbled out on a napkin. My cell bill is eight pages.
    Over the last year Paulson and Bernake forked over $7.4 Trillion – TRILLION tax payers dollars to Wall Street to stem the hemoraging and prevent the unwinding of the 650 Trillion dollar derivatives market Ponzi shceme.
    The predator class, their oligarchs, and their fascist enablers in the bushgov are robbing Americans blind without review, recourse, accounting, accountability or remedy for abuse.
    The big three have a little breathing space now to manage the inevitable resctructuring of the US auto industry into the big two, and maybe only one.
    There should never been a debate about the use of TARP funds for this bailout.
    Nor should there be a debate when all the other oligarchs in the various other stressed industries come begging for their bailouts. Construction, real estate, transportation, pharmacueticals, defense contractors, private military, and private intelligence companies, PR firms and lobbyist, et al. will all come begging for bailouts as the predator class and the fascists in the bushgov nationalize American finance and most major industries.
    Why are socalled realists silent, tonedeaf, and suffering from selective blindness and amnesia with regard to the thugging of the American taxpayer by the predator class, the thieves, swindlers, and pathological liars on Wall Street, and the fascists in the bushgov?
    I cannot fathom this myopic focus on the big three, and the apparent total blindness to the criminality, deception, incompetence and ruthless fleecing of the American taxpayer by the finance sector?

    Reply

  38. Tosk59 says:

    Hey, we’re setting up an interesting experiment here… Chrysler and GM take govt $$ and become subject to a “car czar” and meddling Congress-critters, while Ford does not.
    Will be interesting to see the outcome…

    Reply

  39. Sam Thornton says:

    Maybe America needs to get out of the
    manufacturing business. We don’t seem to be very
    good at it anymore. Whether it’s because of the
    lunatic MBAs that have taken over management or
    just a general decline in competence, selling off
    our remaining manufacturing plant might be better
    than trying to save it.
    Sure, a few million will be thrown out of work and
    have to survive by their wits or perish. But after
    all, each of us do have a right to a gun and a gun
    is often the quickest way to get a stake for what
    comes next. Just watch a Clint Eastwood movie if
    you don’t believe it. Chances of being caught are
    nil. If you think law enforcement can deal with
    four or five million stickups a day, I’ve got a
    securitized derivative I’d like to sell you.

    Reply

  40. ... says:

    get the captcha fixed…
    17.4 billion is 2.34% of 700 billion…….2.34%………………………..
    if the private banks had been scrutinized 2.34% of the 700 billion they are being given, old rothchild would be rolling over in his plutocratic grave..and indeed they haven’t as no self serving politician would want to jeopardize any of the payola they get from these same plutocratic forces…
    most people know when they are being taken by the private banking corporations who are not held accountable to the ordinary citizen who is forking the bill.. they want the same treatment that bush has been given as well – no accountability whatsoever for anything…
    wanting to hold ONLY the auto industry accountable makes sense in a society/world turned upside down..

    Reply

  41. questions says:

    For a different take on the car culture….
    Consider each player in the game as vaguely rational (including the bizarre latent sexual desire we seem to express in our car choices — count up the number of models that have the letter “X” in the name, look at the ads for SUVs (masculine) and vans (feminine).
    Now, the car makers have been right to try to keep the price down. Every increase in price (even for safety) excludes customers on the margin. Detroit loses some new car sales for EVERY antilock brake system, every seat belt, every… that becomes standard/required in all cars.
    Look at the SUV drivers. It’s not just comfort or style, it’s also the competitive advantage you have by sitting up higher than the car in front of you. When the bulk of cars are bulky, you, too need bulk in order to stay alive.
    Look at the profit margins on the various cars. The companies are required by law to generate profits for the shareholders. SUVs are more profitable.
    Land use patterns also end up being fairly rational for individuals in non-iterated ahistorical games. I make my money on a land deal here and now and I discount the greenhouse effect, the traffic burdens, the damage of SUVs, the hideous life of the suburbs because that’s all in the future or elsewhere in space.
    Look at the carpooling/sharing of children afterschool. Getting a van or and SUV is the generous choice when the whole baseball team needs a ride.
    Put all of these microdecisions together, each rational or properly emotional in its own way, and you get what we have now.
    So how do we intervene? Gas taxes require the self-sacrifice of an entire Congress, and then some because the clamor for repeal would be huge and the rewards for repeal equally career-enhancing.
    We have to make it both rational and emotionally correct to buy mini and micro cars for local trips, small sedans for medium trips, and train tickets for longer trips. The key is to set up the game so that each decision-maker along the path can do the right thing while preserving rationality.
    Work on this project instead of blaming Detroit, the executives, the union members, the consumers, the roads….
    (And if Detroit could make a car that doesn’t rust after a year, that would be something! Every Taurus seems to rust in all the same places.)

    Reply

  42. rich says:

    Hardly hyperbolic, wigwag.
    Market share of Japanese & German automakers grew because Detroit refused to make a fuel-efficient, cheap, reliable cars.
    Many Americans bought the cars they wanted from Honda (etc.), because they didn’t want the exorbitant Yukons or Navigators or Chevy Caprices offered by the Big Three.
    That historical fact is hardly disproven by your observation that many Americans bought SUVs. The gross overgeneralization you deploay is necessarily false, and fails to account for the buying habits of those Americans who DO buy SUVs. Mind you, I have no sympathy, but that’s just about all Detroit offered in the last decade+. So EVen recently, if you wanted a certain kind of vehicle, from the Big Three, you basically had to buy a gas-suckin hog.
    So in two stages, Detroit bears enormous responsibility, for a) losing market share, and for b) restricting available models to loser’s vehicles.
    In any market, half the equation is supply. Denying that won’t change where the major hunk of responsibility lies. Again, I have no sympathy for SUV drivers’ current costs.
    But you contradict yourself, WigWag.
    First you’re cryin’ about the Prius-drivin’, latte-sippin’ liberals who DO do something to lighten their impact on the planet — and the next thing ya know, you’re blaming those Red-State suburban-livin’ SUV-drivin’ Americans who did buy American cars for . . . victimizing poor old General Motors by misleading it on which cars would competitive in harsh economic times. You just can’t have it both ways.
    Blame the victim doesn’t work in a recession — so do it on somebody else’s time.

    Reply

  43. JamesL says:

    Chu’s recent comments on refrigerators and the auto industry is spot on. Government (that is, or used to be, the PEOPLE in the US) have to push for change because business will not change of its own accord. Manufacturer complaints that efficient refrigerators were too expensive to produce were identical to auto manufacturer complaints in the ’60’s that front wheel drive cars were too complicated and expensive to be mass produced. It is too sad to be funny. Auto manufacturers did not volunteer to introduce safety glass (ever seen someone cut up by non-safety glass?) or collapsable steering columns or shoulder harnesses or institute specs for fuel tank location and construction—-gads the list is endless. Auto manufacturers do it for MONEY, not the well being of their customer. “Apple pie and Chevrolet” is just an AD, tho it seems Americans can no longer distinguish between needs and wants, or ads and facts. The US auto industry has not produced a car I was interested in buying for thirty years, and they aren’t now. The supposed “savior” Chevy Volt engine plant is on hold, and every iterative design “improvement” of any American car rolled out by any of the “big three” always seems to have “upscale” in the description and increased mass buried in the spec, even as auto reviewers admit that the US is indeed a leader in making interiors of compact cars look cheap. Don’t hold your breath for practical, simple, bare bones, long lived, cars from Detroit. Those qualities are not on the spec, or if they are, the designers have been doing an astoundingly bad job. The big three with Republican assistance complained and lobbied against fuel efficiency and threw away thirty years while at the same time Europe was designing cars for the current and coming realities of higher oil prices. If you want a car that gets 60+ mpg, you can find them in the EU, but Americans are PREVENTED from buying them here.
    But Wig is right to look in the mirror, because Americans tend to buy foo-fah and not practicality. Americans buy cars based on color or endorphin production or the loan rate. And it is the people who can afford to buy new cars, not the ones who can’t, who determine the national supply of used cars for the masses. You can’t blame the poor here; this is on the necks of those who buy new cars. I’d love to see this equation change, but it is probably Tata or Chery, not Ford or Chevy, that will enable people with lower incomes to help determine the composition of the national fleet.
    The US car problem is now systemic and–worse– septic, comprising the vain and monied consumer, the dissolute manufacturer, and sclerotic federal and state bureaucracy that stifles innovation and participation by any but the largest corporations.
    The recipe for the car of the future–if there is to be one at all, which IS a valid question–is not secret: low mass, low drag, low specific fuel consumption, simplicity, low part count, low proprietary part count. No one in the US is doing this, nor has any plans to. Billions for automaker bailouts? They should be getting a bill for damages instead.

    Reply

  44. WigWag says:

    Sorry Rich, you are mistaken and your use of hyperbolic language doesn’t make you more persuasive. Americans by and large haven’t chosen the “nutritious fuel efficient vehicles” you have apparently chosen for yourself, not because they couldn’t get them, but because they didn’t want them. Commuting from their suburban homes to their suburban office parks, which is what millions of Americans do, was just so much more comfortable in their large gas guzzlers. And why not buy a big car? After all, gas was cheap. And any politician who dared advocate for a carbon tax or higher gasoline taxes was persona non grata.
    If you live in a suburb, this is your fault. If you drive an SUV, this is your fault. If you drive a pick-up truck because it makes you feel good not because you haul tools, this is your fault. Europeans and the Japanese lived with high gas taxes for years with barely a grumble. But that just wasn’t the American way.
    Toyota and Honda are doing better than Chrysler and General Motors not because their executives are smarter. They’re doing better because they’e headquartered in countries where the voters are smarter.
    It’s always easier to blame someone else then to admit our own culpability. No one is saying the auto makers are brilliant; and they’re certainly not eleemosynary, but they are not completely to blame or even mostly to blame.
    Americans brought the demise of the automobile industry on themselves. All the faux populism in the world, won’t change that.

    Reply

  45. rich says:

    WigWag wrote:
    “My proposal is this; before you make any comment about how terrible Ford, General Motors and Chrysler are, take a look at the car(s) in your garage or your driveway. Then take a look in the mirror.”
    ‘The fault dear Brutus, is not in our stars, but in ourselves…’ ”
    What unadulterated crap.
    Blaming the consumer is the weakest and most cowardly of gambits, and it offers no refuge at all. If you’ve got no answer, say so.
    The car in my driveway has gets great gas mileage. The fault is Detroit’s for not offering a competitive, efficient product. Blaming the consumer for not choosing the Coke SUV or the Pepsi SUV — and finally opting for another nutrious (fuel-efficient, reliable) beverage because Detroit isn’t responsive to the market — that’s just a gargantuan Orwellian lie, wigwag.
    When you only offer Coke or Pepsi, there’s no room to blame the consumer. You can’t blame the mainstream consumer who picks Coke or Pepsi, when that’s all that’s available. And you can’t blame the consumers that try harder and spend their money on milk and orange juice. You know, foreign stuff.
    When TV producers offer nothing but pablum, it’s an insulting lie to say that must be what people want because they watch it.
    When politicos say “we’re getting the government we deserve, because the American people doesn’t seem interested” / “voted for th rascals” it’s just an unbelievably offensive lie. Like we’re responsible for officials that violate their oath of office? display zero courage, and less integrity? I don’t think so. It’s on the office-holder, the lobbyist, the lawyer, the enabling pundit.
    Rationalizing failure doesn’t make it go away. Blaming the consumer or voter doesn’t make it so.

    Reply

  46. rich says:

    How could anyone interpret these events and failure to act as “Bush did the right thing”?
    Same thing’s happening on the financial industry front–only they get hundreds of billions without any conditions that obligate them to loan money so that American companies can stay afloat.
    By all means be tough on the auto execs—but that hardly means Bush is acting in good faith.
    Get this — Goldman Sachs has moved into the 1% tax bracket — by ‘moving’ it’s activities to other countries or jurisdictions.
    As the the SIVs fell apart, these financial wizards got the hell outta Dodge. They’re not just getting bailouts running to the hundreds of billions—they’re evading any and all taxes on the their profitable activities:
    http://www.bloomberg.com/apps/news?pid=20601087&sid=aznONFlyupOI&refer=home
    “The rate decline looks “a little extreme,” said Robert Willens, president and chief executive officer of tax and accounting advisory firm Robert Willens LLC.
    “I was definitely taken aback,” Willens said. “Clearly they have taken steps to ensure that a lot of their income is earned in lower-tax jurisdictions.”
    U.S. Representative Lloyd Doggett, a Texas Democrat who serves on the tax-writing House Ways and Means Committee, said steps by Goldman Sachs and other banks shifting income to countries with lower taxes is cause for concern.
    “This problem is larger than Goldman Sachs,” Doggett said. “With the right hand out begging for bailout money, the left is hiding it offshore.”

    Reply

  47. PissedOffAmerican says:

    This sdeems to be a proper thread for a rant.
    Remember when these fuckers were telling us what a dire emergency we faced unless we poured hundreds of billions into this un-monitored theft of our taxpayer’s dollars?
    Well, if you watched this PIECE OF SHIT George Bush last night, blubbering on before his premier co-conspirational think tank, the ever despicable AEI, you can’t help but notice the lack of urgency devoted to the rescue of this nation’s bread and butter, its work force.
    Countless millions of American’s are awakening this morning, taxed to the extreme with worry, stress, and fear about their futures and the welfare of their families. Did you see George Bush note this fact while speaking before the AEI? Do you sense any urgency from these complicit and abetting non-representatives in our Senate or Congress?
    Business as usual is destroying us. And we have apparently learned NOTHING, as the saga unfolding with the New York senate seat so succinctly underscores. When has Caroline Kennedy been affected by the price of a gallon of gas, or a crippling family health emergency that drives her family into bankruptcy?
    Our non-representives will suffer none of the hardships that WE THE PEOPLE will suffer this Christmas season. They will have their holidays, unburdened with a lack of health care, a fear of loss of home and hearth, their “jobs” secure and and un-threatened by lay-off or bankruptcy.
    We’ve completely and utterly strayed from what we purport ourselves to be. The title of a “Representative Government” has become little more than a propaganda tool, a slogan designed to lull the masses into subservience while they are systematically robbed, raped, and decieved.
    There isn’t a shoe big enough to wipe the sneer off of George Bush’s face, because to do so, it would have to have a sole the size of Washington DC.

    Reply

  48. Bart says:

    NPR is reporting that the deal involves UAW wages being reduced to those of the non-union southern auto workers. GOP wins again! I hope this can be reversed in January.

    Reply

  49. karen says:

    “…President Bush has pardoned Ford, Chrysler, and General Motors for years of misdeeds…White House will give the auto manufacturers $17.4 billion in low interest loans.”
    Your writing implies that Ford asked for and accepted part of the money. It did not.

    Reply

  50. WigWag says:

    Bush did the right thing. When it was time to bail out Wall Street, Congress anteed up the money no questions asked. And when they called the hedge fund managers in to testify it was a virtual love-fest. The contrast in treatment that the auto executives got versus what the hedge fund managers got could not have been starker.
    I certainly didn’t notice anyone in the House or Senate or in the press asking the hedge fund managers about whether they traveled to Washington, D.C. on their corporate jets. When it came to the car companies, that’s all anyone could talk about. The press worked so hard to trivialize and dumb down the discussion about the problems of American manufacturing in general and the automobile manufacturers in particular that the public can be forgiven for viewing this bailout with a great deal of skepticism.
    But as short-sighted as they’ve been, the “big three” are not the most culpable for this mess; the most culpable are all of the recent Presidents, the Congress and ultimately the American people.
    There’s nothing wiser or more entrepreneurial about Toyota, Honda or the other Japanese auto manufacturers. The reason that they produce more fuel efficient cars and the specific reason that Toyota developed the Prius is because they were developing cars for a home market where the price of gasoline was so laden with taxes that fuel efficiency was a must. Throughout the 1990s while Americans regularly paid less than $1.50 per gallon, the Japanese were paying $4.00 per gallon. No wonder Toyota made fuel efficient cars and General Motors didn’t. If Americans weren’t so tax averse, Congress would have imposed a gasoline tax more in keeping with what Western Europeans and the Japanese paid, and our car companies would have been producing fuel-efficient cars too.
    But the most important reason that our car companies produced gas guzzlers while the Japanese car companies didn’t, is because of the way so many of us choose to live our lives. Most Japanese live in densely populated urban areas where big cars are an inconvenience. Tens of millions of Americans live in suburbs, where they have long commutes to work which makes large cars more comfortable and safer. Don’t blame Detroit for all the SUVs and Minivans on the road, blame the gluttonous American lifestyle. If you drive an SUV or pick-up truck and don’t haul tools or ladders for a living, you’re more to blame for the problems of the American car companies than the car companies are themselves.
    And the biggest joke of all is listening to that whore Senator Corker talk about how much more efficiently the Japanese make cars in the United States than the Americans do. Japanese car companies are producing automobiles in brand new factories subsidized by billions of dollars in tax breaks that various southern states provided them to locate there. And they’ve been operating here for only about 20 years so they don’t have the legacy costs American car makers do.
    The reason the American tax payer has to bail out Detroit is because the American voter provided the heroin (low gas taxes) that got American consumers hooked on the large cars Detroit happily provided. Japanese and European consumers (who mostly live in cities) demanded a small, fuel efficient car; that’s what the market provided them. Americans wanted SUVs, that’s what we got.
    My proposal is this; before you make any comment about how terrible Ford, General Motors and Chrysler are, take a look at the car(s) in your garage or your driveway. Then take a look in the mirror.
    “The fault dear Brutus, is not in our stars, but in ourselves…”

    Reply

Add your comment

Your email address will not be published. Required fields are marked *