“A leading Democrat, Senate Banking Chairman Christopher Dodd of Connecticut, said he knows of no Republicans who would vote for a $25 billion auto rescue package. He added he was ‘not inclined’ to move a bill without bipartisan support, pointing out that prominent Republicans have publicly opposed the measure.” And there you have it, via The Wall Street Journal. Then again, maybe not. We know from Dodd’s profession (politician) and his connections to the mortgage industry (which his committee oversees) that the Senator’s “inclinations” are not inviolate. So perhaps the fact that House Minority Leader John Boehner called the bailout ‘neither fair to taxpayers nor sound fiscal policy’ is more germane. That’s rep Boehner of Ohio folks. “And what assurances will Democrats give taxpayers about their chances of getting their auto bailout money back?” Boehner asks in a prepared statement. While I’d like to think that the republicans have had a sudden bout of common sense and rededicated themselves to fiscal responsibility, this sounds like nothing more than pre-horse-trading political posturing to me.
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“Bailout” will happen – post BK – as the gov will finance after huge givebacks from UAW, common stock goes to $.12, brands are eliminated, wagner and co. go away. Don’t fool yourselves though – GM is still going to be around… look for Ford to take over the #1 spot domestically.
I can handle that kind of bailout.
I think its a little bit of both.
The Republicans are upset and angry that people like Barney Frank want to use the previously passed $700 billion bailout for purposes other than what was actually passed into law. On the other hand, Republicans are wary of giving the companies this money without forcing the Unions to make concessions, since a big chunk of it would go toward financial obligations for the Unions.
If the Democrats really believed their policies were correct, they’d pass a bailout or any other legislation when they have the majority in both houses. Nothing’s stopping them. They just don’t want the political consequences should the bailout fail. It’s not about bipartisanship, it’s about being able to share the blame with the Republicans in case the plan doesn’t work. Sort of a reverse to the idea that success has many fathers and failure is an orphan.
Rather than a headline that says Republicans are torpedoing the bailout, perhaps it might be more accurate to say the Democrats are ducking and running for cover.
Not that it would matter. As shameless as Dodd and Frank have been, blaming Bush and the Republicans as Chris and Barney were getting sweetheart mortgages and hundreds of thousands in Fannie Mae campaign contributions to keep the subprime tap open and the derivatives selling on Wall Street. They could pass legislation without a single Republican vote and later, when the legislation fails, they’d still blame the Republicans with a straight face.
During the 90s while Fannie Mae was cooking up all those derivatives, the executive in charge of “product initiatives” was Barney Franks live in lover. Perhaps it’s a consolation to know that the taxpayers weren’t the only ones getting screwed.
If I were a Senate Republican, I wouldn’t want to be responsible for some giant GM money siphon, but on the other hand, I wouldn’t want GM to go under on my (party’s) watch. In other words, I could be persuaded to vote for a mini-bailout big enough to get GM through until the middle of 2009, whereupon the General would be the Democrats’ problem. Look for a $10-15 billion (tops) bill to pass the Senate this year. That’s my prediction.
Given that other article about Euro suppliers getting edgy about taking credit, we now have to wonder how long 25 billion would last.
The cash burn would accelerate enormously if everyone GM owed money to started operating on a cash only basis. If GM got a lump sum of 25 billion, that would be a great time to start demanding cash only to clear the books before the bankruptcy.
Look for 25 billion to last for 3-4 months at most. 15 billion? My god, that would last them until February if suppliers thought the government wasn’t going to go full in. It wouldn’t be a run, it’d be a sprint on the bank.
He can’t think of any Republicans that will support a bailout?
I can. The 9 from the State of Michigan.
Conslaw – I think you’re right…
I look at it this way: If Congress doesn’t come up with the bridge loans, the taxpayers will end up paying anyway – and possibly paying even more than the loans would amount to.
Say GM files for Chapter 11. They’d have to seek debtor-in-possession financing. Where are they going to find that kind oif money in today’s financial environment? Congress, that’s where.
Then watch how the consumer refuses to buy a product from an automaker in Chapter 11. Watch that Chapter 11 turn into a liquidation. Then who pays the unemployment benefits for all those jobless workers? Taxpayers, that’s who.
If GM turns into a Chapter 7, watch it begin to take the suppliers (many of whom are already on the bubble) with them – especially Delphi. Then watch what that does to Ford – which right now stands a reasonable chance of pulling off a turnaround.
I think the scenario above is all too possible – and politically intolerable. That’s why I think the bailout will pass- partcularly when Congress just passed a 700 billion bailout – without conditions – for Wall Street. That’s the same Wall Street that created the immediate circumstances that have put GM, Ford and Chrysler so close to the edge.
With new union contracts and products due to come on line in 2010 – and thousands of employees already bought out or laid off – GM and Ford may very well have been able to turn it around on their own (and Ford still might). But the credit crisis changed all that.
Bozoer Rebbe :
If the Democrats really believed their policies were correct, they’d pass a bailout or any other legislation when they have the majority in both houses. Nothing’s stopping them. They just don’t want the political consequences should the bailout fail. It’s not about bipartisanship, it’s about being able to share the blame with the Republicans in case the plan doesn’t work.
Spot on. Also, notice the Junior Senator from Illinois just resigned his seat for a new job starting 1-20-09. He could have stayed and helped the legislative process along, but I’m thinking he doesn’t want his vote associated with what will most likely become a bankruptcy train wreck.
I hope the GOP stands against this. Let the Dems own the unionized inner city public skoolz and the domestic auto biz. They deserve ’em…
Rep. Boehner, who is from my hometown district (Ohio 8), is one of the few fiscal conservatives left in Congress. I would think he is a more credible voice than Doddering Dodd. The last thing we need is throwing more good taxpayer money after bad. And I say all of this as a GM supporter (I’ve got 2 of their products in my garage and they’ve both been good to me).
Boehner’s opposition might be the thing that kills the deal, we can only hope.
At this point, the Republicans in congress will not budge an inch on pretty much anything. They know they won’t have the ability to put up much of a fight come January, so they’re going to be very uncooperative with the Democrats.
Droid800:
…The Republicans are upset and angry that people like Barney Frank want to use the previously passed $700 billion bailout for purposes other than what was actually passed into law.
There are many legitimate reasons to oppose using TARP funds to bail out the auto industry. However, the Treasury Secretary has announced publicly that he’s planning on using all of the TARP funds for purposes other than what was actually passed into law, so by that logic, Congressional Republicans ought to be upset and angry at themselves, as well.
According to the Detroit papers, the city of Detroit is getting ready to seek $10 billion from Congress. GM, Ford etc. want $50 billion or more. That’s at least $60 billion and it won’t stop there. No way, do not give a penny, the created this mess, why should I pay for it?
That’s rep Boehner of Ohio folks
RF, you well know that there are ultra-hard-right conservative representatives from CA as well, and they enjoy scapegoating Hollywood for their own parenting failures just as much as any bigot from the deep south. States are not contiguous areas of red and blue. There is diversity.
If the Democrats really believed their policies were correct, they’d pass a bailout or any other legislation when they have the majority in both houses
Conservatives such as yourself really need to stop listening to Limbaugh. He’s clogging your neural nets. It has nothing to do with belief. The Democrats do not have an effective majority in the Senate. Due to Republican obstructionism, the Senate requires sixty votes to pass anything of consequence, and the present makeup of the Senate has 52, if I recall correctly, Democrats (and fellow travelers). Further, your man Bush will veto anything progressive if they somehow manage to pass it. The next Senate will have between 58 and 60 Democrats (election results still pending in MN and GA) and a progressive president. Next year, you wil get your wish, and then some.
Spot on. Also, notice the Junior Senator from Illinois just resigned his seat for a new job starting 1-20-09. He could have stayed and helped the legislative process along, but I’m thinking he doesn’t want his vote associated with what will most likely become a bankruptcy train wreck.
Yeah, the lazy bastard has absolutely nothing to do between now and January 20th. He’s probably going to spend all that time visiting his granny’s grave in Hawaii to attract media sympathy and distract the left-wing media from Sarah Palin, the Shining, Uplifting Beacon of God-Fearing American Empire (and Socialism, But Only If You Happen To Live In An Oil Rich State Such As Alaska). After all, she be not dictator! And she knows the difference between Africa, the continent, and Africa, the country. God Save The Sarah!
Lol @ faster_than_rabbit.
Thanks for pointing out the absurdity of the previous statement that “nothing is stopping” the Dems from passing a bailout bill. C’mon guys, we learned about this stuff in 7th grade civics class.
But yes, as you point out, all these things will be true by next year. So let’s shove the “DEMOCRATS DUCKING AND RUNNING FOR COVER” crap until next year at least OK?
Detroit bankruptcy woes are peanuts compared to the Government entities with an end of fiscal year June 30 2009. That is when Defined Pension Plans go belly up along with the Gov entity responsible. State, city and county governments nationwide. CA is in deep fiscal trouble now because of the anticipated taxable Capital Gain shortfall.
Horse manure.
If Democrats think the bill is such a good idea, try and pass it. If they fail due to Republican resistance, then they can blame the Republicans in the next election for GM going under. They could even blame Bush for a veto, thus consigning him to the dustbin of history.
The truth is they don’t want to stick their neck out. Say they try now and fail, then try again after BO takes office and succeed. If the bailout blows up then, it’s all on them. Here they want to say it was bipartisan support for the bailout, blah blah blah.
FWIW, the New York Times is saying the same thing, with quotes from Sen. Richard Shelby (R-AL):
“The financial straits that the Big Three find themselves in is not the product of our current economic downturn, but instead is the legacy of the uncompetitive structure of its manufacturing and labor force,” Mr. Shelby said in a statement. “The financial situation facing the Big Three is not a national problem but their problem.”
This story has Sen. Dodd “personally favoring” a bailout, but saying that the votes aren’t there in the Senate without Republicans.
The President-elect ran in Michigan on supporting a bailout, running ads to that effect (and saying that his opponent did not) so I expect we’ll get one in January.
@micpl30
Michigan has 9 senators? Quick, somebody let the Democrats know… /sarcasm
The democrats do not have the votes in the Senate, which is where Dodd is a member. Even if something passes the house, it still has to get past the senate, which is much more difficult.
@Renkeyes
No. The bailout money was to be spent at the discretion of the Treasury Secretary, but ONLY for the Financial sector and for items associated with the mortgage mess. It was never meant to be spent on the industrial sector, which is why the Republicans will never agree to it.
@ Faster than Rabbit
Due to Republican obstructionism, the Senate requires sixty votes to pass anything of consequence, and the present makeup of the Senate has 52, if I recall correctly, Democrats (and fellow travelers).
Actually, the democrats passed this one into the Senate rules when they were in the minority and after Bush was elected. The Republicans are just using it just like the democrats did. (payback is a bitch)
Yeah, the lazy bastard has absolutely nothing to do between now and January 20th.
His point just went completely over your head. Yes, Obama has a lot to do, but since he’s now president-elect he holds a helluva’ lot more sway than any other Senator, Republican or Democrat. What he was also saying is that the lack of Obama means one less vote for the democratic caucus, which makes the passage of ANY bill extremely difficult.
This site has great info about cars but about politics, not so much.
Bozoer: Fannie and Freddie didn’t sell derivatives, they bought them. That’s how they lost billions.
Droid: It was Paulson who decided that he wasn’t going to purchase “toxic” assets with the $700B, not the Democrats.
Adub: Paulson can give GM $25B today if he wants to. There is no need to pass a law.
Anyway, RF is right about the horse-trading. There’s no political justification in bailing out investment houses but letting car manufacturers go bankrupt. They’ll get a piece of that $700B before it’s all done.
@AnalogKid
I never claimed otherwise. The way the funds were allocated, Paulson is able to allocate funds to deal with the Financial sector and the financial sector only. That is specifically what the law says. There is nothing that can be disputed about that. While Pelosi and Reid have requested Paulson to disperse some of those funds to automakers, he has refused because the law does not allow him to do so.
What the Republicans are upset about is that the Democrats want to pass a new law that WILL allow funds from the TARP to be used for non-financial sectors.
Sure, Paulson can dole out money from that $700 billion to other industries, Congress just has to authorize him to do so first. (remember all that oversight and protections that the democrats whined about? THAT’S the reason why Paulson can’t just cut the automakers a check)
The United States no longer needs the big three, two would be plenty. Eliminate the automaker with the smallest market share to minimize the ripple effect. Bah bye Crapsler. Ahhh, if it were only that simple…
Droid,
This administration has heretofore not been too concerned with “what the law allows.”
In any case, I was addressing your point about the Republicans being “upset and angry” about the $700B being re-directed. Why would they be upset if what is being proposed is not possible anyway. Obviously, Pelosi and Reid thought that giving out some of the $700B to the Big 2.5 was no problem.
The fact is that Repubs don’t want to bail out the Big 2.5 (for reasons that are understandable if not justified) and it is they who are seeking political cover so as not to be blamed if (when) one or more of the Big 2.5 go under.
Conservatives such as yourself really need to stop listening to Limbaugh. He’s clogging your neural nets.
And those on the right are guilty of stereotyping people, eh?
I think I’ve listened to Rush’s show maybe once in the past year and have read a couple of transcripts. Rush is entertaining, in part because of how much he pisses off folks like you. If I listen to talk radio at that time of day, it’s either sports or Dennis Prager. While Prager discusses politics a lot, his show covers a much broader range of topics than Rush and I like the way he thinks things through. Actually, I called into Dennis’ show today because he was talking about the bailout and got through. Prager frequently has guests from the opposing point of view, whom he treats with respect and good will and his motto is that clarity of position is more important than agreement. When you can find me someone on Air America who is as graceful, thoughtful and polite to their opponents as Prager, I’ll register as a Democrat. Of course, Air America gets such poor ratings and narrow distribution that you’d be hard pressed to actually find them on the air.
I usually don’t use others’ talking points and prefer to do my own thinking. A non-conformist, I can be contrarian in any situation, even when among those on the right. I’m a good troubleshooter because by nature I focus on what’s different, out of place or looks wrong, and I hate it when my position is not represented well. I have no problem disagreeing with others on the right about this or that issue. But that goes to the point that there is far more true political debate on the right than on the left with its pious orthodoxies. Offhand I can think of a bunch of serious ideological splits on the right:
Conservative – Libertarian
Social Conservatives – Fiscal Conservatives
Relgious – Secular
Open Borders – Controlled Immigration
RINOS – Everyone else
While the basic concepts of liberty, a strong defense, small government, and as as little taxation as necessary are pretty much accepted on the right there is still substantial intellectual ferment and debate and differences are tolerated.
For the most part (except for some of the squishier RINOS) you won’t find many calls to throw anyone out of the conservative movement.
Can any Democrats criticize any interest groups that make up their base? When was the last time you heard a Democrat criticize anyone on the left? Nobody is as orthodox as a progressive. Dissent when a Republican is in power is patriotic, according to the left. Dissent from progressive positions,though, will not be tolerated.
I love how “progressives”, in lockstep, call Republicans narrow minded.
It has nothing to do with belief. The Democrats do not have an effective majority in the Senate.
Sure they do, they can bring bills to the floor for a vote any time they want, they control all the committees.
Due to Republican obstructionism, the Senate requires sixty votes to pass anything of consequence,
You don’t know what you’re talking about.
All the sixty vote limit is about the supermajority needed to invoke cloture, end debate, and bring a bill to a final vote. With more than 40 seats, a party can filibuster and prevent cloture. While some Republican senators oppose a bailout, I doubt that there are enough willing to filibuster to prevent cloture and a final vote. Even though they might vote against the bill, preventing a vote on a Detroit bailout would be politically unwise for the Republicans.
I love how the Democrats are whining. First they say they won’t vote if it isn’t bi-partisan and then they say they can’t vote because if they do, the Republicans will filibuster. Maybe we should call for a whaaaambulance for the Democrats.
Prove your convictions, bring it to a vote and paint the Republicans as obstructionists if they filibuster. But you know the Republicans won’t filibuster and since this is all about the Democrats not willing to take responsibility.
Let me ask you, to bring the Republicans over to vote for the bailout, what pet project of the left are you willing to forego? The Fairness Doctrine? No you’d let Detroit burn if it meant being able to get Rush off the air. School vouchers so inner city kids could go to good schools? No, the teachers unions wouldn’t give you money for the next election cycle.
Politics is about horsetrading and negotiating. What are you willing to give up to get a bailout?
You see the difference between the right and the left is that the right is interested in what’s best for the country and the left is interested in power. As such, the psychological phenomenon of projection comes into play and the left accuses the right of everything they do or would do if they could. So folks like you can’t understand anything but a scorched earth policy because if the shoe was on the other foot and the Dems in the minority, you’d filibuster your head off.
Speaking of Democrat filibustering, you do know, don’t you, that the most famous filibuster of modern times was when the Democrats, I repeat, the Democrats filibustered to prevent passage of the 1964 Civil Rights Act.
and the present makeup of the Senate has 52, if I recall correctly, Democrats (and fellow travelers).
Though it really doesn’t apply to Joe Lieberman, there is some wisdom associating the historic connotation of the phrase fellow traveler with some Democrats.
Bozoer,
Can we talk about cars please? Or maybe the auto industry? Or the merits of a bailout as it affects the auto industry? Or the chances that a GM C11 will end life as we know it?
Please feel free to post at The Truth About Republicans.
But can GM last until Jan 21, 2009?
Yes, I’m generously skipping every post that has political partisan content. Chances are I’m not missing much.
The solution to the auto industry’s woes is not to be found right or left of center – and turning it into political meat will just make it worse.
Is that the MK46 torpedo, btw? A super sophisticated beast – programmable on the fly, super efficient in the water, pin-point maneuverable. There’s some really hot engineering in that baby – and the energy-to-speed coefficient is out of this world.
What if we had cars like that?
Let’s try to keep the donkeys and elephants at the door. It’s cool to read about politics as a change up, but it’s becoming as much a norm as cars here.
@ Analogkid:
If you don’t want others posting politics, maybe you shouldn’t either.
It’s kind of cute. 2-1/2 years ago when the Dems were running for congress they promised things like an end to the war, the only thing stopping them then was the republican majority in congress.
Now that the dems have the majority and nothing gets done they still blame the republicans.
I don’t expect the republicans to go along with much of anything over the next few years. It would be stupid politically.
There is nothing any congress or administration can do right now to fix the economy, and whoever is in office will get blamed.
With a clear democratic majority in congress and the administration, four years from now, and no domestic auto companies and 30% unemployment, it will be very difficult for the dems to blame the republicans. And it will be the republicans who run under the banner of ‘change, yes we can.’
I hold no preference for either party, but this is how this funny drama will play out.
What we see are differences between the two parties. Obama is a strong leader and will bailout Detroit. GM can survive until Jan 20 even if they have to slip their suppliers a month. The votes will be in place when Obama is inaugurated.
It is ok to give AIG, an insurance company 150B, but wrong to give anything to Detroit? I have to admit, the one thing John Boehner is doing right, is trying to find out where the Fed just spent 2T – capital T for TRILLION – dollars – the Fed won’t say.
GM, Ford, Chrysler will get a bailout. Bush will not be given a pass on investigations and prosecutions – he will issue a blanket pardon before he leaves office. This is what Bush wants in exchange for support of a bailout, an agreement not to prosecute.
Here’s the thing.
Everything depends upon credit being available.
A company such as AIG insures loans, making lenders feel comfortable about lending substantial sums.
If this assurance disappears, then lending stops.
For this reason, getting credit moving again, between financial institutions, is critical. It may seem strange that abstract money movement should take precedence over actual manufacturing, but such money movements are necessary in order to support the transactions that make manufacturing possible.
For this reason, money is being intraveneously fed into capitalism, per se.
As to Detroit. As long as we have auto companies that are viable, that make a profit and that have loyal customers that appreciate their offerings, there’s reason to question the rationale behind funneling money to companies that are not viable, that do not have loyal customers and whose offering is irrelevant to market demands.
Money sent to Detroit now is money sunk down the drain – UNLESS certain terms are attached.
For instance, one could conceive of retooling Detroit, and demanding that it supply vehicles that are relevant to a reconfiguring of public transportation: more buses, rail, and other public modes of mobility. That would at least give some ROI. Giving GM money to let them build Escalades, Yukons and Tahoes makes very little sense.
Energy efficient trucks and trailers, now there’s something. Imagine the amount of fuel wasted up the funnels of today’s … ?
In Capitalism, you’re supposed to reward the companies that correctly figure out the supply/demand equation, viz consumer desires and relevant needs – it makes little sense to penalize them. And handing Detroit 50 billion would penalize the companies that are doing things right (or at least better).
I don’t buy the arguement relative to AIG not being allowed to fail. The problem is, if you bailout AIG, then you have to bail out others. The problem is the “others” can become a long line. Long term, there is less problem letting one insurance company fail, than the entire US auto industry.
Handing Detroit 50B does not penalize the foreign car companies, other than it assures more competition in the future, which benefits the consumer.
Evidently there are no guiding principles on who does and who does not get aid, other than how politically connected the recipients are. AIG? no one would miss them. You car and home loans would not be affected.
I don’t buy the arguement relative to AIG not being allowed to fail. The problem is, if you bailout AIG, then you have to bail out others.
The argument, and I don’t fully buy it, was that if you don’t bailout AIG, then you also have to bail out others. We were already on the hook for Fannie and Freddie (at least, accepting those lower mortgage rates for all those years put us on the hook), plus through the FDIC for a large percentage of the deposits of any bank that failed as a result of AIG going under. That could have exceeded the costs of bailing out AIG.
No it is not ok to bail out AIG. But you have to understand the rationale.
AIG guaranteed people’s investments from loss. Complicit rating companies rated investments artificially high, and investors didn’t mind investing because the investment was insured by AIG.
If AIG was broke no one would pay off investor losses. The investment instruments would fail. The whole thing would snowball.
Bailing out AIG is not bailng out an insurance company, it is a desperate attempt to keep the wall street from imploding. Trillions ultimately at stake.
The former automaker known as GM is small change compared to that racket.
The more ideologically inclined commenters appear to have quite a few axes to grind in this post. That’s depressing, because it gets everyone heated and clouds the issue. A lot of us have strongly-held political views, but lets put the knives away.
Cerberus is chock full of Republicans.
They have plenty of skin in this auto bail out deal.
matt51: Obama is a strong leader and will bailout Detroit.
No, he owes the UAW, so he will save them and mangement from their own stupidity with other people’s money.
Which means that GM and Chrysler (not so much Ford – it is making the changes necessary to survive in the long term) will continue to stagger along without taking the steps necessary (i.e., closing factories, divisions and laying off a lot of people) to ensure their viability.
This bailout is only postponing the inevitable.
GM and Chrysler are simply not viable firms as presently constituted.
matt51: The problem is, if you bailout AIG, then you have to bail out others.
That makes as much sense as my six-year-old nephew telling me that because his friend got a new video game, I have to buy him one, too.
AIG and the auto industry are completely different entities, and there are completely different rationales for aiding (or not aiding) them.
matt51: Handing Detroit 50B does not penalize the foreign car companies, other than it assures more competition in the future, which benefits the consumer.
No, it just penalizes the taxpayers, many of whom have expressed their support by Detroit by purchasing something else.
And the last time I checked, even if, say, GM and Chrysler went away, there would still be Ford, Honda, Toyota, Nissan, BMW, Mercedes, Hyundai and Kia all ready to sell vehicles to customers. Sounds like plenty of competition to me.
matt51: Evidently there are no guiding principles on who does and who does not get aid, other than how politically connected the recipients are.
You’ve given a very good explanation of why Obama and the Democrats are pushing to bail out the UAW…I mean, GM and Chrysler.
Regarding Chrysler, its owner – Cerberus – can use its OWN money to save it, or spiff it up for sale. A bailout for Chrysler is a waste of taxpayer money, and unfairly rewards a private firm that gambled on a specific strategy when it bought Chrysler, and now realizes that this strategy is unworkable.
I thought that Democrats were supposed to be AGAINST that sort of thing.
As for GM, it needs to either seek Chapter 11 protection, or reorganize under a quasi-Chapter 11 scenario, permitted by the government. Pontiac, Saturn, Saab and Hummer need to go away, long with the factories, white-collar and blue-collar employees and dealers that support them. (Buick and GMC could be merged into a new, mid-level division – LaSalle?)
The Jobs Bank needs to go away, too.
GM needs to size itself for about 15 percent of the market at the most.
But all of this is politically unacceptable to the Obama Administration and the Democrats. THAT is where politics are hindering the correct outcome.
Stein X Leikanger: For instance, one could conceive of retooling Detroit, and demanding that it supply vehicles that are relevant to a reconfiguring of public transportation: more buses, rail, and other public modes of mobility.”
GM and Chrysler are having trouble making ends meet in their current business…saddling them with the enormous expense of retooling for a completely different line of products is the worst thing that we could do.
Stein X Leikanger: That would at least give some ROI.
There are already manufacturers who supply those products. Adding more competitors would only drive down all manufacturers’ return on investment, and, if anything, tip some profitable firms into the red.
Stein X Leikanger: Giving GM money to let them build Escalades, Yukons and Tahoes makes very little sense.
The bailout money is supposed to help them retool their factories for fuel-efficient cars, not manufacture Escalades, Tahoes, etc. The government certainly isn’t going to make GM stop production of full-size SUVs and trucks as a condition for receiving the money.
Geeber –
Saying Obama is only acting in UAW interest is false. It is his view of national interest, what is best for US in the long run. Your hatred of the UAW is clouding your judgement.
I would argue it is best to have let AIG fail – even more so than Detroit. Especially since Fox News announced this morning AIG execs just gave themselves 500M in bonuses after getting 150B in bailout money.
I would also say, counterbalancing the arguement for a bailout, there is a fairness issue. If Detroit is bailed out, why not the airlines? and so on. So I was posting earlier, there is a fairness issue, first in bailout out AIG, secondly in bailout out Detroit. But then I must conclude the politically connected will get bailouts, whether they make sense or not. So I was making both sides of the arguement, for and against. As far as I can tell, there is no overall guiding principle as to who is getting the money. Especially the 2T John Boehner is trying to track down. Lehman Brothers was allowed to fail. AIG is saved. No logic here. No I do not buy the sky is falling arguement if AIG is allowed to fail. Pure scare tactics to extort cash.
Is that the MK46 torpedo, btw? A super sophisticated beast – programmable on the fly, super efficient in the water, pin-point maneuverable. There’s some really hot engineering in that baby – and the energy-to-speed coefficient is out of this world.
What if we had cars like that?
You do know, don’t you, that ‘smart’ weapons like the Mk46 can easily cost six figures each? A quick search found that in 1998 Raytheon got a contract to deliver 182 MK46 Mod 5 and upgrade 20 Mod 2 models to Mod 5 revisions to one of our foreign customers (Egypt, most likely) for a total contract price of $49 million. That works out to $245K a torpedo. The replacement for the MK46, the MK50, is $2.9 million each.
Hell, it costs $70K just to turnaround exercise versions of the MK46.
Giving GM money to let them build Escalades, Yukons and Tahoes makes very little sense.
The Yukon/Tahoe is going away. GM’s already announced it isn’t being replaced. Even the Suburban may be replaced with a unit body, not BOF.
Bozoer Rebbe,
Dennis Prager FTW! I used to listen to him as well but the station that carried him discontinued his show. Now I can only read his columns, which is ok because he is one of the most articulate columnists around today.
As for the political side of this:
Yes I think the Dems don’t want to do the bailout on their own because they are worried about the consequences if it fails. They don’t need all the Republicans to go along with it. Just enough to get past the 60 votes in the Senate to end debate.
But this is what they don’t want (I’m just using the Senate as an example):
Bailout Bill
…………..For…….Against
Dems ….49 ……..3
GOP ……..6 ……42
The bill passes but you can’t say that the GOP as a whole supported the measure. They want something over 50%, like 36 to 12 GOP votes for. That will give the Dems the political cover they need. Same type of ratios apply in the house.
Now you might look at the numbers and say “hey the totals on the ‘for’ side do not add up to 60”. Your right, but that’s because it’s not unusal for a Senator to vote for cloture (end the debate) and then vote against the bill itself. Voting for cloture allows the bill to get passed if there is more than 50% in favor. Voting against the bill individually allows the Senator to cover himself politically if he thinks the folks back home won’t like his or her’s vote. So he/she helps get the bill to the floor so it can pass but can claim plausible deniability to angry voters back home.
matt51: Saying Obama is only acting in UAW interest is false.
I guess those campaign donations and union members working for his campaign exist only in my imagination. And the union expects nothing in return for that effort.
matt51: It is his view of national interest, what is best for US in the long run.
In which case, he needs to educate himself on how the auto industry really works, and the folly of giving GM and Chrysler taxpayer money to prop up their current unsustainable business model.
There are several posters on this site who can educate him.
It’s in the national interest to tell Cerberus that it must deal with Chrysler on its own – which would involve selling the viable parts (Jeep, minivans, the Dodge Ram and maybe the LX cars) to foreigners, and letting the rest die a merciful death.
For GM, it must go into Chapter 11, or in some sort of quasi-Chapter 11, and shed workers, factories, divisions and dealers until it is sized to serve about 15 percent of the market.
matt51: Your hatred of the UAW is clouding your judgement.
I have no feelings against the UAW one way or another. What I dislike is an organization using taxpayer money to avoid facing reality.
It’s not our fault that we recognize that it is no longer 1965, and the UAW can’t bring itself to admit this key fact.
This does not mean that we hate the union.
It means that the union needs to wake up and face reality, and the reality is that giving GM and Chrysler taxpayer money to maintain their current divisional structure and employment levels is akin to flushing it down the toilet.
matt51: I would argue it is best to have let AIG fail – even more so than Detroit. Especially since Fox News announced this morning AIG execs just gave themselves 500M in bonuses after getting 150B in bailout money.
Even discounting the difference between the two companies, which other posters have explained, the answer would be that two wrongs don’t make a right.
matt51: I would also say, counterbalancing the arguement for a bailout, there is a fairness issue. If Detroit is bailed out, why not the airlines? and so on. So I was posting earlier, there is a fairness issue, first in bailout out AIG, secondly in bailout out Detroit.
What ultimately matters is whether any bailout will accomplish its mission. For GM and Chrysler, the bailout that they are seeking won’t, because it fails to address two key issues – removal of the executive teams that ran these companies into the ground, and rightsizing these companies to fit their true market share.
Regarding the first, Rick Wagoner has already said that he isn’t going anywhere.
Regarding the second, the Democrats and Obama are not going to sit by while GM uses government money to shutter divisions, close factories and lay off white-collar and blue-collar workers. The UAW would be screaming bloody murder.
Even though these are the actions GM needs to survive in the long run.
Bozoer Rebbe :
November 14th, 2008 at 1:16 pm
Is that the MK46 torpedo, btw? A super sophisticated beast – programmable on the fly, super efficient in the water, pin-point maneuverable. There’s some really hot engineering in that baby – and the energy-to-speed coefficient is out of this world.
What if we had cars like that?
You do know, don’t you, that ’smart’ weapons like the Mk46 can easily cost six figures each? A quick search found that in 1998 Raytheon got a contract to deliver 182 MK46 Mod 5 and upgrade 20 Mod 2 models to Mod 5 revisions to one of our foreign customers (Egypt, most likely) for a total contract price of $49 million. That works out to $245K a torpedo. The replacement for the MK46, the MK50, is $2.9 million each.
Hell, it costs $70K just to turnaround exercise versions of the MK46.
I guess the obvious escapes you. RF is fond of a term that tends to pop up in editorials: mission critical.
Once you’ve gotten within attack range, you don’t want a dud out of your tube – therefore, very expensive hardware.
But my point was that there’s a lot of relevant technology that’s been developed that could be applied to a new generation of cars, including energy management algorithms.
If automakers put as much effort into improving mileage as they do in designing cupholders, we’d be home free by now.
As to Escalades, Yukons and Tahoes. Yes, they’ve seen the folly of their ways, but that’s no guarantee they won’t screw up again.
I don’t see the point of keeping GM alive. They haven’t made money off a single one of their models over the past seven years, and in order to get rid of them (at a loss) they’ve had to offer insane incentives (down to employee rebates for all.)
That company is dead in the water in its present form, and we really can apply the funds they are asking for in far better ways. Shit, giving it to Elon Musk would be better, and some here know what I think of Tesla.
Stein X Leikanger,
How does the MK 46 or 50 compare with the British Spearfish? I remember that one from a Tom Clancy novel. Speed of 50+ knots if I remember. Hopefully he wasn’t making it up.
They’re all in that speed range – but for true speed in water, check out the Russian supercavitating Skval.
How about 200 KNOTS through water? Yes, you read that right, 370km/h, and that’s what’s been confirmed through observation from NATO vessels. Could be even faster …
http://en.wikipedia.org/wiki/VA-111_Shkval
Stated speeds for torpedos are usually below actual.
For true ooomph through water, check out the Russian Shkval. 200+ KNOTS (370km/h) – rocket propelled, supercavitating, and with guidance!
They claim they’ve developed a 300kt version, and some have speculated that it’s what blew up in the forward torpedoroom of the Kursk.
To bail out GM is to betray humankind—here’s why:
Will the new occupiers of the White House betray us? To “bail out” the Goldman-Sachs mafia, then turn around and ask to “bail out” GM is to betray all of humankind. Both companies are small-brained dinosaurs that must go if we are to survive.
Let me explain. In his book The Sampson Option, Sy Hersh meticulously details how Goldman Sachs spear-headed the effort to sneak US nuclear weapons materials to Israel, thus igniting the current H-bomb arms race throughout the Mideast. Israel could easily have prevailed there with US jets and hardware, but no, Goldman wanted Israel to hoard A-bombs, then H-bombs in underground bunkers. Why, on Earth, would Israel need 200 nuclear bombs (and growing)? If we ignore our role as global citizens and act as though we don’t need to STOP nuclear weapons proliferation, from such perspective Israel could get by with only five bombs. All the rest are entirely useless. They’ll never be used. They’re meant to be monstrous totems—to both fuel the Israeli public’s sense that if they have to, they can wipe out tens of millions of their neighbors, a cruel and dangerous attitude. And nukes can be used to put fear in every Israeli—if YOU cross those golden rope lines and wander onto “security” turf, then just imagine the force that will be trained on you.
And GM? Who owns it? The Du Pont family has owned the largest percentage of GM ever since the 1930’s when they used WWI war booty to take it over. And who are those DuPonts, who Nancy Pelosi and other weak-kneed Democrats are thinking about giving billions–to “bail out” GM? A Bidermann-DuPont, the part of the family that got royalist French money to found DuPont’s gunpowder monopoly, actively encouraged states of the South to secede just before the Civil War (historians write that the majority there didn’t want to). Then DuPonts cashed in on the war and took possession of southern terra.
DuPonts bought Opel from Nazi Germany, then made Opel troop carriers to ferry Hitler’s troops across Europe. A family admiral, Sam DuPont, asked his superior if he could let his sailors loot China along with British Opium War sailors who were shooting up China in order to make it buy their opium. Like the GM bailout, it was just business, after all. DuPont Chemical signed monopoly patents exchanges with (Rockefeller investment) I.G. Farben corp. of Nazi Germany during Hitler’s reign of terror. I.G. Farben made Zyklon B, the gas used to kill so many Jews in gas chambers. The DuPont agreement with I.G. Farben was about getting more money, more influence, more power and control—over people like you in the end. Want to resuscitate that GM monopoly, or let it die and force a split-up of smaller companies to re-tool and make smaller cars (no more Hummers and SUV’s that use 2-4 X the gas your car uses)?
DuPonts endorsed Mussolini and funded propaganda to warn about “the Jew peril,” just when Hitler was thinking about what to do with the eugenics data that he got from US researchers (Rockefellers funded Auschwitz Dr. Josef Mengele’s eugenics work in Germany, at the time). And in 1934 right after Hitler’s Night of the Long Knives in which he killed ex-chancellor Fritz Papen and hundreds who opposed Nazi blood terror, DuPonts combined with Morgan (yes, now featured in Morgan-Chase after merging with Rockefeller’s bank) to fund an attempt to “remove” Franklin Roosevelt from power by arming and paying disgruntled vets of WWI to move on Washington. The plan was modeled on fascist veterans organizations, elsewhere, but Gen. Smedley Butler exposed the plot in Congressional hearings.
Years earlier, DuPont-owned United Fruit Co. had paid Colombian soldiers who massacred striking banana plantation workers at Cienega, a town that Gabriel Garcia Marquez and historian J. Fred Rippy helped to make famous. US naval ships waited offshore to remove the shot-up, bloody villagers before they could talk too much. Remember now, it was really a DuPont family massacre, not merely a corporate thing. Corporations are simple-minded paper “societies” used to make equally simple-minded brown-noses in Congress (and in your village) think that mass murder by the American Borghias, DuPonts and Rockefellers at Miners Creek in Colorado several years earlier, are done anonymously. It’s like when the king’s troops raped and massacred people in one village, then invited your village to take their livestock. DuPont owned United Fruit put its money into many of the key operatives who figured in the Kennedy assassination, by the way. Dealey-plaza photo’d Gen. Ed Lansdale, who specialized in shooter teams, was a protégé of DuPont United Fruit employee-turned-CIA-chief Allen Dulles. *Dulles’ brother John helped get tons of ethyl lead additive to keep those Nazi troop carriers running in Europe, by the way. Small world, isn’t it? Dulles family money was from Rockefeller.
DuPonts funded the Black Legion, goon terror squads in Michigan who were used to beat up and kill strikers there, people like Michael Moore’s relatives, after all. So, to bail out GM is to be the village oaf who, instead of calling for an end to the Borghia terror, dons a bloody hide on his head and calls for more of it. Nancy Pelosi moved for martial law privileges to prevent Congress from reading legislation before voting on it just 5-7 weeks ago, when Bush said the sky was falling. Now she’s talking about resuscitating the DuPont monster, GM, so that it can level many more villages elsewhere. Care for a sip of the family wine? It goes down like a fine, vintage “Moulin” (melt water gushing down to sever entire ice shelves of Antartica, due to GM Hummer-fed global warming). *The Bohemian Grove Action Network lists Nancy Pelosi’s husband, Paul F. Pelosi, as a member of the Grove sub-camp (Stowaway) as David Rockefeller.
United Fruit, no the DuPont family (they own GM, remember), used its goons to create what are known as death squads in Guatemala, which then spread to other DuPont (and Rockefeller) family investments like El Salvador, Honduras, and Argentina. When soldiers in Argentina raped young, unconscious truth-tellers in Argentina by the thousands, and then pushed them unconscious from helicopters to drown in the ocean, it was simply continuing the DuPont and Rockefeller family tradition. Both families toasted the killer regimes there.
And after a (Rockefeller CFR/Trilateral-planned) massacre of an estimated 500,000 left and labor family members in Indonesia under Suharto, a DuPont-interest, Uniroyal Corp., used the grief-stricken family members in Indonesia as slave labor for years on Uniroyal rubber plantations there. I’ve seen canals in Jakarta where some of the thousands of Chinese were then butchered and dumped into the water—for being too competitive as business owners.
It was another DuPont family gain, soon to strike again in East Timor, and elsewhere. There were many, many more massacres in the name of DuPont family “corporations.” Fast forward to the present: the first big oil company to sign on for taking away Iraq’s national oil and drilling it as their own was DuPont-owned Conoco. *Do you really want to hear more of this, or would you rather just forget it all, have a drink or two, and hope that you, too, might be permitted to pal along and eat cheese with Nancy Pelosi on a fine DuPont family estate, maybe a lush Manhattan penthouse if Joe Biden gets invited to the party?
Guess whose banks gorge on huge, literally huge narcotics profits that cycle into the US from places like Bin Laden’s old hangout, Afghanistan? DuPont family banks (Citicorp is where they’ve kept the lion’s share of DuPont family loot) and Rockefeller’s Chase were busted for big narco-launder back in the 80’s. There was no doubt, they had to know it was drug money launder (millions in cash deposits that violated federal reporting laws). Now why would a respectable family that let US mafioso launch to the Bay of Pigs from DuPont family land in Guatemala, why would THEY have anything to do with big narco trafficking?
“Would you mind stepping away from the golden ropes, please? Sir, I said step away from the ropes!” (reaching for a Taser).
Do you really think that the families of Borghia-massacred villagers centuries ago would have voted to keep the Borghias in power, had they been given a choice? That’s what Nancy Pelosi and whoever fronts for a GM bailout is asking you to do–in other words, don’t worry about “the past.” The millions killed by proxies, the fact that DuPont family kill in Guatemala alone is probably equal to, or greater than all of the people killed in the Borghia terror in Renaissance Italy. Pelosi wants you to just sit back and shut the hell up, please. Think about “jobs,” instead, even though most of GM’s real manufacturing has moved to places like Mexico and Vietnam, or China. Have a little cheese ball—it’s got some wine in it. Wink, wink!
So what are they really like, those most-steeped in human blood among the DuPont family (hey, we’re talking GM, folks!)? Are some of (not all) the women neatly blinkered, perhaps compulsive name droppers, women who wear those once-only Saks outfits while sipping numbly at brandy that would put Kim Jong-il’s $240 per bottle habit to shame? What do they think when cousin John DuPont executes his “wrestler” trainer on the estate, assuming that it’s okay to kill the little people—you just call someone to dispose of the body then merely hint at things your family has done if police call? Do DuPont men laugh suggestively when someone compares a politician to Jack Kennedy? It’s an inside joke, of course.
Or do they keep a low profile–like they do when mixing with men like Seward Prosser Mellon, a fellow grouse-hunting board member who’s cited as being the Mellon responsible for that sex-slave shock-and-torture dungeon Cathy O’Brien referred to as Charm School, a Youngstown OH greystone mansion used in the so-called Monarch program to electroshock and pain-condition people like O’Brien’s daughter Kelly, and many, many others?
What do you do when the empire is crumbling, the world trying to politely suggest as Desmond Tutu did, that we shouldn’t really want to invade other nations based on lies then scatter depleted uranium that will poison millions for the next 3.4 billion years there? Do you simply shrug and have another sip of Nancy Pelosi’s petty wine label, maybe eat that ball of cheese and bow your head?
Do we pay tribute to the American Borghias, or should we let GM fail and save public money for the needy, instead, then let GM’s parts reorganize and make more efficient cars instead of planet-killing monsters?
Should you kiss the hand of Pyotr—who savagely killed your many cousins, or do you celebrate that he’ll soon be gone and your children may finally, finally have a chance?
**See Gerard Colby’s book DuPont Dynasty for further details. Also Fletcher Prouty’s website, Peter Dale Scott’s book The War Conspiracy, Hersh’s book The Sampson Option, Roll Call’s article about Nancy Pelosi’s assets, the Congressional Record re House hearings in 1936 re Smedley Butler’s (corroborated) story, and “Eugenics and the Nazis, the California Connection” a San Francisco Chronicle article on sfgate.com