December 12, 2008, Chump Change
The (domestic) auto industry has clearly been investing in stupid things over the years, such as lobbyists to insist on not raising the auto fleet mileage averages (so-called "CAFE" standards) which would have, over the course of time, resulted in our nation being virtually free of the need to import foreign oil by now... instead, electing to go the opposite way so they could sell more SUVs. They could have instead used their once considerable clout to lobby for socialized medicine national single-payer health care and improved pensions, to relieve them of those crushing obligations. They could have made vehicles with better service records than the Yugo. But nooooooo.... They did none of those things.
And bizarrely, if you can believe it, having f***ed up virtually every aspect of bid'ness over the years... here they are now, having to go to Congress to beg for money. And at this point, after watching over $100 billion of taxpayer money be pumped into AIG alone. largely to preserve its 200,000 or so white collar jobs, the pathetic auto industry, which, certainly with its suppliers, probably accounts for at least ten times as many jobs, can't even get a lousy $14 billion package out, as an auto-industry rescue bill died in the Senate at the hands of members from states with foreign car plants that pay a lot less.
Priorities folks: after tax cuts for the rich (which are decreed from God), the most important thing on Republicans' agenda is union-busting. And they've always hated the UAW in particular. And that's what this was about: the UAW refusing "parity" to lower its own members already compromised wages to the same levels as their counterparts working in US plants making Toyotas, Hondas, etc.
In a country that actually produces less and less, it's domestic auto industry was one of the last large industries that employed a lot of skilled industrial workers and paid them well; naturally, that's too much for Republicans, who are almost saying "from hell's heart we stab at thee," as, come around three weeks from now, there will be a whole lot less of them in the Senate and House.
Most people have their heads up their ass and haven't figured out that we already have what the Chinese would call "socialism with American characteristics"... having intervened in the financial sector at least fifty-fold what the auto-makers were asking, trotting out crap about "moral hazard" is way, way too little, too late. Yes, the auto-makers are badly managed, but a $14 billion bridge loan beats the hell out of the social costs of having these enterprises fail and having their workers go on relief.
Just saying.
Comments
And saying with your usual eloquence. The Republicans are fine with throwing money at their rich, greedy friends who run big companies into the ground (small and medium size banks are doing quite fine, so I hear. Lending money and everything) but they just ask their "friends" in "real America" to bend over and take it.
Posted by Michael L at December 12, 2008 10:17 AM
This one seems to be a battle of the supermoney - unionized Detroit vs. non-union South. May the better connected contestant win. Though I don't think you can blame the Republicans, W wanted the bailout. The money might come from the $700 billion bailout.
Posted by Just Wondering at December 13, 2008 10:11 AM
Did you see this news item? (usnews.com/blogs/planning-to-retire/2008/12/12).
"More than 26,500 Lehman workers and retirees are eligible for some form of retirement benefits. The U.S. Pension Benefit Guaranty Corp. (PBGC), a government agency that insures private-sector pension plans and pays out benefits if the a plan fails, initiated action to end Lehman's pension plan today because the plan stands to be abandoned following the liquidation of the firm's assets at a Dec. 22 bankruptcy court hearing.
The pension plan is 95 percent funded, with $898.2 million in assets to cover $940.8 million in benefit liabilities. If the plan ends, the agency expects to be responsible for $17.9 million of the $42.6 million shortfall. PBGC says:
“None of the buyers have assumed responsibility for the pension plan. The agency believes that Lehman's non-bankrupt controlled group members could afford to take care of the pension plan. Should that fail to happen, the agency will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which will end as of December 12, 2008.”
Lehman Brothers underfunded? Sure, most, if not all, large companies with pension benefit plans are. Imagine what happens when even one of the Big Three automakers goes under. The PBGC will pay out cents on the dollar.
Posted by Just Wondering at December 13, 2008 10:24 AM
JW:
Agreed-- a total default by any of the Big Three-- or really any major industrial company (do we have that many left?) would pretty much take out the PBGC, just as a top ten bank failure could take out the FDIC (and why it was so critical to shore up the banking sector, albeit at obscene cost). Which is also why no one in their right mind would allow such an enterprise as GM to fail in the midst of an economic and financial meltdown. Which leads us to ask... are the Republicans involved in this out of their right minds? They have their ideologies, and they just don't care about the broader consequences of anything they do... of course, they never have. Are they stupid... or are they nuts? You decided...
Posted by the talking dog at December 13, 2008 2:10 PM
Forgot to mention. The Treasury (headed by a Goldman Sachs alum) gave Goldman Sachs (now a bank) $10 billion out of the $700 billion (supervised by a Goldman Sachs alum), and this week they announce $12 billion in year end bonuses. It's good to be Goldman Sachs.
Posted by Just Wondering at December 13, 2008 8:51 PM
They didn't call him "King Henry" Paulson for nothin' now, did they? As you said: it's good to be the king.
Posted by the talking dog at December 13, 2008 9:48 PM