Whatever else you can say about White House hopeful John McCain– and you're going to say lots– the guy's got a set. Followers of our E85 coverage will recall that McCain was the only candidate to come out against ethanol-related subsidies for corn farmers before the Iowa primary. While in Iowa. Yesterday, the Arizona senator toured Lordstown (home of "high mileage Chevrolet Cobalt and Pontiac G5 economy cars"), and then came out against a federal 911 for any of Detroit's ailing automakers. Speaking at a town hall meeting, McCain was all about putting government dollars into "research" into alt propulsion (a $300m prize for anyone who can guess how much money he'd send Motown's way). But a bailout? Automotive News [sub] provides the money shot: "A bailout, I don't think works." In fact, The Detroit News quotes McCain's antipathy to bailouts in general. "Frankly I just don't see a scenario where the federal government would come in and bail out any industry in America today." Over to you, Barack.
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He’s got a set alright, just not the set this country needs. Barack’s set isn’t right either. Someday, maybe we will actually get to vote for a guy/gal that we actually want, not just the lesser of the evils.
Either way, a bailout should not be considered. Detroit had plenty of fat years to work on viable small/midsize cars but chose to grab the easy bucks only. Any investor will tell you, DIVERSIFY! I don’t get a second chance when my poor decisions cost me, why should they?
So if Barack is careful, and offers his “bailout” as loan guarantees, and also favors fed money for R&D, then he picks up Michigan, and maybe the WH. As far as I’m concerned, that’s fine. We’re wasting $720 Million per DAY on a useless war, which McCain intends should go on indefinitely. At least the Detroit bailout would benefit our own country, and will probably only cost a fraction of what the war is costing us.
but but but…obama’s about *change*, guys!
paging dr. paul. paging dr. ron paul…
I still like McCain and sadly wish it was his 8 year tenure ending this year – our country would be in a much better position. I am glad that McCain told the D2.8 management that – sorry you put yourselves in this mess, deal with it.
I do hope agree of his “x prize” enticements as it does work and give companies reason to push the envelope.
“Frankly I just don’t see a scenario where the federal government would come in and bail out any industry in America today.”
I guess he didn’t read the headlines about Bear Stearns. When he says that he doesn’t know anything about economics, he isn’t kidding.
Hey couldn’t GM use the $300 million, that could keep the wolves from the door for days.
Anything Mr. McCain says most certainly cannot be taken for granted.
Mr Obama’s credibility rates only slightly higher in my mind. Both are on the campaig trail, and will containly press the limits of the bullshitting they can get away with inorder to get elected.
It is a shame we act as of we are electing a king. Constitutionally the President enforces the laws. The Congressman you vote for make those laws.
That said, I agree with Mr McCain on this one.
If it is sink or swim for the litte guys, then it dammn well be sink or swim for the big guys.
Huh… so McCain is pro-bailout for a failed and mismanaged Wall Street investment bank but anti-bailout for American auto companies?
Well, I suppose that makes sense. Those Michiganders are riff-raff anyways… let them fend for themselves… and my goodness, have you SEEN the clothes those blue-collar workers wear!?
Both Obama and McCain would bail out GM and Ford. America needs a domestic auto industry, and under the right circumstances it will flourish again. Letting the industry die is the wrong thing to do, renewal would offer much greater opportunity for individuals and the economy in general.
Let’s remember that China makes crappy, crappy cars, and yet its industry is thriving. No one in the US would drive a Geeley in current form, but as I have mentioned several times before, no one thinks Geeley is in danger of collapse.
The next President must have a coherent auto/industrial policy or the entire sector will crumble beyond the capacity of anyone to bring it back under any circumstance.
eh_political:
The next President must have a coherent auto/industrial policy or the entire sector will crumble beyond the capacity of anyone to bring it back under any circumstance.
The sector is in no danger of collapse. The D2.8 are about to collapse.
If GM goes down and gets a bailout, I hope the other 1.8 are offered the same benefits, otherwise we would be rewarding GM’s failure. If only they get government aid, they could end up with a competitive advantage over Chryco and Ford. And for what? Pissing away their business?
Here in the Socialist Workers Paradise(Canada)we don’t do bailouts – the government just buys the entire company from the git-go.
http://en.wikipedia.org/wiki/Crown_corporation
It truly is the worst of both economic worlds – yet it gotten so many people elected over the years, it will never go away.
Even when one of these Franken-Companies is ‘privatized’ they are still treated as pseudo government entities (for better or worse).
Bailing GM out won’t rejuvenate the American car industry. The exact opposite, actually. If you want a competitive American car industry, you’re going to have to trash the old one; not prop it up and pray.
Attaboy John! He does have A BIG OL’ SET and isn’t afraid to say what he thinks. I guess if you can survive five years of torture in a Hanoi POW camp, you feel no need to sugar-coat what you think.
Your next president should look to what is in the interest of the American People. The GM/Ford/Chrysler provide the over whelming amount of employment to Americans. Assembled units and employment are different measurements. The transplants have not / do not / will not replace the GM/Ford/Chyrsler in economic impact.
Federal help will avoid the human costs associated with the increased unemployment and medicaid that a collapse would bring. Federal help would also deprive the bankruptcy industry of their potential profits they currently are contemplating.
One good perspective of what the effect transplants have had on U.S. Autoparts employment:
http://www.chicagofed.org/publications/fedletter/cfljanuary2006_222.pdf
fyi Auto parts is where the real economic benefit to an economy comes from.
toxicroach :
June 28th, 2008 at 11:46 am
Bailing GM out won’t rejuvenate the American car industry. The exact opposite, actually. If you want a competitive American car industry, you’re going to have to trash the old one; not prop it up and pray.
I get your point, I believe once its gone it ain’t coming back. Like the American television or steel industry. The only answer is to tie any support to very specific employment and performance targets. Its cheaper to help the 2.8 through this liquidity crisis then to deal with the aftermath of collapse.
Chrysler’s loan guarantees are an excellent model for a bailout. While they never made a top tier vehicle based on the loans, they did make billions of dollars, contribute proportionally more to the North American economy than any transplant, and showcase American innovation with some interesting new interpretations of personal mobility.
Robert, I understand your competition based arguments, but no other country in the world plays by those rules, and America needs to rethink them as well. No country can remain healthy while pissing away entire sectors of their economy. I think we agree that GM could thrive as a rationalized smaller corporation, under new management, but it needs breathing room to adapt.
McCain would cave, and as President would spend substantial billions to prop up GM and Ford. Do a personal gut-check, ask what party, what leader can afford to preside over that kind of job loss and that kind of erosion of industrial potential. We are not living in the 1970’s, not living in the 1930’s–in fact we are living in an era of shifting global power. And it’s shifting away. As such the proper questions involve how to invigorate the economy as a whole, even if it involves borrowing what is working in other countries.
The seeds of GM’s decline were sewn from an inability to simply study what the Japanese were doing properly, and copy. It would have forced them to admit they had been out hustled, out thought and out managed. It is time for America to collectively swallow it’s pride and reflect on how it has been outmaneuvered. Saving its automotive industries would be a step in the right direction.
I agree with eh_political, the ramifications of letting those companies completely disappear hard and fast will have implications far beyond but what most people believe.
Not offering a bailout to these companies that make up a large share of our manufacturing base because “they deserve it”, “they brought it on themselves”, or “they don’t make anything I would buy, it’s all crap” are a series of poor and frankly scary excuses.
They need to be allowed to go Chapter 11, then they need to be allowed to rise from the ashes as leaner, meaner, more competitive companies.
It is a shame we act as of we are electing a king. Constitutionally the President enforces the laws. The Congressman you vote for make those laws.
People won’t grow up; they want a king or daddy to deal with issues so they can eat their burgers and watch tv. Look at the crap cops get away with; people want authority to run things.
When I was a kid, comic books were a big deal. Superman, Batman, etc. One of the comics was about a guy who would spin so fast the crooks couldn’t see him, so he could walk (spin) right up to them and listen to what they said. McCain and Obama are like that guy. They’re spinning and flipping so fast we don’t know where they stand on anything, or won’t by November. Nader tells the truth but we don’t want to hear it. Reality is too grim so lets just print more money, talk tough about foreign policy issues and crime and pretend it’ll all work out. Kind of like Wagoner and Lutz. It’ll all work out for us about the same as it’ll work out for them.
Bailouts are only for banks, hedge funds, and other paper pushing industries that employ the rich few. Manufacturers that employ the poor and middle class to produce real goods don’t need any help other than making it easier for them to move production to third world countries. McCain, who owns eight houses including one with an artifical fishing lake, understands the genius of supply side economics, which will eventually benefit the people at the bottom just as soon as those at the top have their fill and share a little. This will happen any day now. I’m sure of it.
Qwerty: Class warfare aside, there is no reason– other than politics– to prop-up GM, Chrysler or Ford. Yes, the pain for the automakers, their workers, customers, suppliers and dealers will be enormous. But the U.S. auto market, indeed the U.S. economy, can take the hit. The D2.8 NEED to take the full brunt of C11 to reinvent themselves and survive, albeit in a new form. If the feds interfere with that re-birthing process, it will hinder, not help. Like giving a wino– sorry, "alcohol dependent homeless person" $1m and expecting them to enter rehab. Sometimes the more painful the lesson, the more important it is. Or… no pain, no gain. The subject of an upcoming Death Watch.
@Dynamic88:
John McCain has clarified himself many times since he made that statement on Iraq. If you choose not to listen, that’s on you.
@Qusus:
That’s ridiculous. McCain has said that he believed letting Bear Stearns fail would have caused a run on the banks, and possible financial collapse. I think that’s a lot different than what would happen if GM went bye-bye. Sure, regional economies will suffer (especially in the rust belt), but it won’t be nearly as widespread as the fallout from a Bear Stearns collapse. The problem with doing that, even if it was the right thing to do, is now people like yourself are making it out like the government’s playing favorites and should bail out any company that’s “too big to fail”. Your second paragraph is also uncalled for. I’m tired of all the class warfare.
@gmbuoy:
The American government isn’t supposed to protect “American jobs” (even though they don’t really exist) or deprive any industry of profit.
@ TriShield:
Not offering a bailout to these companies that make up a large share of our manufacturing base because “they deserve it”, “they brought it on themselves”, or “they don’t make anything I would buy, it’s all crap” are a series of poor and frankly scary excuses.
The first and second aren’t. The third is irrelevant. At the end of the day, it’s not the government’s place to do anything. Comments like yours are the ones that are scary, because they prove what I’ve said several times here: people are losing faith in capitalism. Why? Because people don’t recognize that things are cyclical. Everyone’s fine and dandy when they’re livin’ on dotcom party barge or using their houses as an ATM, but when it’s time to pay the piper, everyone has their hand out for…well, a handout.
But here’s the kicker. If the government does the right thing and smacks their hand away, then Mr. and Ms. Mooch and their sympathizers get their revenge…at the polls. So we’re left with the great paradox. We get mad at politicians that pander…unless they pander to us. So now politics is just a matter of raising and spending money, PR spin and trying to be all things to all people. Truly awful.
Robert-The problem is is that I am convinced that a C11 filing will eventually turn into a C7 one. Customers will avoid a “bankrupt” automaker, because they will be afraid for their warranties and the future availability of parts. So sales will go down further, resulting in whichever company goes into C11 never coming out of it.
The question for the next president will be to deside if they are willing to let one or all of the Detroit 3 to disappear, or do they want to literally just throw money at them? Also, both candidates have other policy goals that will hurt the Detoit 3. McCain will stay in Iraq and probably bomb Iran, both which will raise the price of oil even more, hurting, probably killing, the Detroit 3. Obama will feel pressure to increase pollution and fuel economy standards (or to let California et al do so, which amounts to the same thing, basically), hurting, probably killing the Detroit 3.
Morbid curiosity has me wondering what Hillary would be doing/saying about a bailout. It’s irrelevant, I suppose, but I’m going with the notion that Democrats love giving handouts as a reward for irresponsible or poorly planned behavior…
Morbid curiosity also has me wondering if she has a reflection? Does she show up on film? Had she been elected, would that have triggered the Apocalypse?…wait, that’s my job! =)
Beelzebubba,
The Republicans are no better. No bid contracts anyone? Blackwater ring a bell?
I do agree with McCain on this one though – they dug their hole. Let them figure the way out.
“McCain…..including one with an artifical fishing lake,”
Another reason to read TTAC. Where else would a poster raise the specter of a dammed pond or lake as an item worthy of suspicion?
By the way that description “artificial fishing lake” describes every lake and pond in the state of Texas, virtually all of Georgia and Montana and Alabama, for starters. Some people even own property that has a shorline. Lots of people we need to be on the lookout for. Besides, outside of Michigan, many of those accessing “artificial fishing lakes, might agree with McCain about not bailing out the Big 2.8-.
But the U.S. auto market, indeed the U.S. economy, can take the hit.
Can it? I see the problem as something a lot larger than just the auto industry. All the problems with management that TTAC has detailed about the Big 2.8 exist in many american business and business sectors. It is endemic. The banks that handed out home loans that could never be repaid are no less incompetent than G.M. or Chrysler.
I have no love for Detroit. I fall into the class of people who would never buy a Big 2.8 vehicle. If they existed in isolation then I would cheer their destruction. It is well deserved. Their continuing existence is an affront to capitalism.
But they don’t exist in isolation. When they go down, they are not coming back. A similar thing will happen to a lot of other industries in this country. While the idea of shoveling taxpayer money to disfunctional organizations like the auto companies sickens me, something has to be done to change the way american business works. Compensation needs to be brought into line with long term results in both private and public organizations, and this needs to be transitioned to in such a way as there is something left when we turn the corner. If we allow everything to crater then we will be left in the difficult, perhaps impossible, position of trying to rebuild from a smoking hole in the ground.
Where else would a poster raise the specter of a dammed pond or lake as an item worthy of suspicion?
It matters because politicians like McCain are so wealthy that whether their policies succeed or fail is nothing but a game to them. Failure won’t affect their lifestyle one bit. Obama, after a few more years of book sales and speaking engagements, will be in the same position, just like the Clintons are with their $100 million and Edwards with his $50 million. These people have nothing in common with the citizens they rule over , and they cannot be trusted to do the right thing for the average citizen.
This is the equivalent situation to executives in large corporations.
John McCain has clarified himself many times since he made that statement on Iraq. If you choose not to listen, that’s on you.
I understand that, but in my head, I’m always hearing “bomb bomb bomb, bomb bomb Iran” with a Beachboys melody.
He’s had a commercial running in Ohio the past few weeks or more, talking about the military service of himself, his father, grandfather. He says in it “I hate war.” Again, I hear “bomb bomb bomb, bomb bomb Iran” while he’s driving a 409.
That being said, I admire his set, and if I forget how to write-in Ron Paul on our ballot, he’s my second choice. He’s a hoot.
If the automakers are “expecting” some type of bailout, it seems to me they’ll do even less to save themselves. That was my initial point, but I had to talk about politics some before I go out now, oddly enough, to a Beachboys cover band at a bar.
Orian :
June 28th, 2008 at 4:16 pm
Beelzebubba,
The Republicans are no better. No bid contracts anyone? Blackwater ring a bell?
Actually, I consider them the lesser of two evils. That’s one of the reasons I joined the Libertarian Party about six years ago. =)
McCain may have found his balls, but he has lost his marbles.
Against ethanol in Iowa and the Midwest. Write off those voters.
For drilling offshore California/Florida. So long to those big states.
No bail out for the D2.8 but we can afford to bail out Bear Stearns and stay 100/1000 years in Iraq. Write off the rust belt vote.
The guy is senile.
Don’t count him out just yet. A weak is a long time in politics.
LOL 97escort! “McCain may have found his balls, but he has lost his marbles”
Let me add one more. I have heard upwards of 80% polled want to end the occupation/conquest attempt in Iraq, and McCaine’s position is to stay there. That’s a real winning strategy.
Beelzebubba :
Actually, I consider [the Republicans] the lesser of two evils. That’s one of the reasons I joined the Libertarian Party about six years ago. =)
I saw a political cartoon last week that absolutely nailed the non-choice that the major parties are offering this year. It showed Obama pointing at McCain and saying, “Don’t vote for Bush’s third term” and McCain pointing at Obama and saying, “Don’t vote for Jimmy Carter’s second term.” Libertarian candidate Bob Barr is a long shot at best for the White House, but he makes more sense than either of the two front-running clowns. I may just vote for Barr in November.
@Robert Farago:
I don’t know, Farago. We know Obama has the money, and can raise tons more. He has an American public tired of 8 years of Bush in specific and Republicans in general. He’s basically shrugged off the Jeremiah Wright fiasco. The entire world, literally, is supporting him according to every poll. He’s eloquent. He’s intelligent. He’s charismatic. He’s everything people say Bush isn’t. But at the end of the day, he’s just more popular. And that’s the problem with politics in America. You don’t have to be more right, just more popular.
McCain strongly supported, and voted for, the 2002 $15 Billion airline bailout. How is it that he is for bailing out airlines and investment banks, but not manufacturing companies?
“They need to be allowed to go Chapter 11, then they need to be allowed to rise from the ashes as leaner, meaner, more competitive companies.”
How about we start leaving the meaner part out of that familiar phrase? Do you really want meaner corporations? People say it all the time, but if you think about it that probably isn’t what you really want. Leaner and more efficient, absolutely. Meaner, no thanks. Costco is a good example of a company which does lean and efficient while giving the customer a good deal, paying the workers as well as possible and keeping a lid on executive salaries. I’m not trying to shill for Costco … but there are very few other examples to use!
For those awaiting a secular messiah to lead this country to the promised economic paradise you can forget it. No President and Congress has done that. And the next one won’t do it either.
To those who trumpet the “lesser of two evils” swansong to weak voting ethic: if you don’t like the two big parties, either vote for a third-party candidate (like you’ve often said you would but chickened out on in the voting booth) or don’t vote at all. Beyond that, the domestics will get federal money. There’s no question about it; they just support too many various industries in this country that can’t survive without them.
Campisi :
June 29th, 2008 at 5:48 am
To those who trumpet the “lesser of two evils” swansong to weak voting ethic: if you don’t like the two big parties, either vote for a third-party candidate (like you’ve often said you would but chickened out on in the voting booth) or don’t vote at all.
If only the choice that Libertarians must make when voting was as simple as you make it out be. Each election, even local ones, I have to struggle with two choices- Do I vote for a third party candidate who doesn’t have a chance to win (except in some local elections)? Obviously this is the only way that the Libertarian Party, or any third party, will ever make progress and evolve into a viable contender to the Democratic and Republican Parties.
But there are some elections, particularly Presidential ones, where self-preservation must supersede political conviction. But voting for McCain really isn’t that great of a stretch for a Libertarian anyway. He’s the most ‘moderate’ Republican Presidential candidate in my lifetime and, most likely, much longer. He’s the first one in decades that the Christian Coalition doesn’t have on a leash!
It’s scary that countless ill-informed citizens may cast their votes for Obama not in support of him, but simply against Dubya’s eight years of lies, war and downright STUPID decisions. Even more frightening is that many others will cast a vote for Obama simply because of his race. It simply doesn’t make sense to me! For the record, I happen to be a gay man but I haven’t voted for gay candidates in numerous local and state elections! That they happened to be of the same sexual orientation as me was completely irrelevant. In each of those elections, the other candidate shared my stance on the most important political issues and that’s why they earned my vote.
Beelzebubba wrote:
But there are some elections, particularly Presidential ones, where self-preservation must supersede political conviction.
While I agree in principle, there are instances of Presidential elections where voting for either of the two candidates will give a choice so abhorrent, that one may vote his mind without hesitation. To wit – the last two elections. However, as you said, this is not the case in 2008.
Obviously this is the only way that the Libertarian Party, or any third party, will ever make progress and evolve into a viable contender to the Democratic and Republican Parties.
A third party will never contend with the Dems and the Repubs because the U.S.’s winner take all, non-proportional voting system is only stable with two parties.
If McCain would have stood against Dubya during the last eight years then he would be in great position. Unfortunately he made a decision after 2000 that the way to the White House was to get in bed with Bush. Now he is the public face of a financially disastrous war.
People are willing to gamble on Obama because the Republicans under Bush sold out every principle they claimed to hold. They basically betrayed everything that Gingrich used to win Washington from the Democrats.
McCain will either fold and promise help to the auto industry or he will lose the election. The electoral map already shows that he is in trouble. He cannot concede MI, OH, and PA.
Obama will not win Michigan, no matter what he promises UAW. Clinton could have, not Obama. He is hard left. Outside of Detroit, that’s not going to fly even with Democrats.
Several things about McCain scare me. One is that he will seemingly do anything to get the job. Kiss up with Falwell and Bob Jones for example. Another is that Phil Gramm is his main economics adviser and apparently in line to be his Treasury Secretary. Per a WSJ article yesterday, Gramm is fully supportive of paying CEOs millions, even billions, for their ‘contributions’ to society. And finally, McCain seems to me to be semi out of it at times. I wonder if he’d do the full term, and, if not, who his veep might be. I would not be at all surprised if he picks the huckster, and we don’t need that.
mel23, I understand your concerns, although I may not share all of them. What can I say, consider the alternative. When was the last election you actually wanted to vote FOR a candidate, not AGAINST? It’s been too long.
Meanwhile the Fed bails out banks, lending institutions, and home-owners. If they all get a piece of the pie for STUPID decisions, why shouldn’t domestic automakers get the same benefits for their stupid decisions?
My opinion, nobody should get bailed out. Or if some do, others should too. If we can reason a Bear Stearns BO was necessary to save the economy, having GM go under would be far worse.
As a side rant….Why is it that when companies and people do stupid crap it suddenly becomes the government’s responsibility to bail them out? Its total BS. Those of us who plan, don’t take ridiculous ARMs, don’t max out credit, drive fuel efficient cars all give up “luxuries” because we know we must be able to pay for it. Meanwhile people buying houses they can’t afford drive up the costs of a home so high those on fixed mortgages suddenly cannot afford a good home in their price range and settle for less. Few years later, they’re in their more modest home that is now worth less than what they paid for it, their employment is in jeopardy, and then they have to watch the government bail out the idiots with THEIR tax money. Tell me again why it pays to be “smart” with your money? Even when you are, you are a small small minority and doing the right thing has no chance against the rest of this monster economy. Bailouts, mortgage forgivenss, allowing re-fi’s when they specifically bought ARMs, extending unemployment benefits…. it all caters to those who are STUPID. Meanwhile the rest of us get screwed anyway along with everyone else.
I’m all for helping people when they need a little pick-me-up. Food stamps are a good thing. Unemployment benefits are a good thing. Welfare is a good thing. To a point. But I’m sick of what has become almost a “safety net” for Americans. It makes it too easy to know the government will save me. If I get into trouble, I know the govt will extend my unemployment or give me a $600 check or allow me to negotiate a better mortgage….and on and on. Drives me absolutely bonkers.
Jerome10, would it help if I agreed with everything you said? Probably not, but I will anyway. ;)
The only thing I like less than McCain’s condescending tone is Obama’s clear lack of judgement of people he keeps close to him.
But credit where credit is due: Johnny M. got this one right. The government’s job is not to bail out industry.
The early 80’s Chrysler example is interesting. What would have happened had Chrysler not been given loan guarantees and allowed to go bankrupt? Lot’s of people would have been hurt, but it would have been a wake up call to a lot of people in Detroit and those that support Detroit to divest their business. Maybe it would have sent the right message to GM and Ford that they shouldn’t be expecting a bailout.
To those that support a bailout, let’s not forget where that money comes from – you and me. I don’t want good money chasing after bad, and unfortunately, that’s what would occur.