Just to show you the difference from an UnParty approach and an ideological one, take a look at The Wall Street Journal's editorial on the Detroit bailout, and compare it to ours.
Both of us are against the bailout. So we agree, right? Not quite. It seems that the one thing that bugs the WSJ the most about the deal is the possibility that maybe, just maybe, it might force Detroit to make sensible cars for a change. And that, to the libertarian extremists at the Journal, would be like taking the country to Room 101 -- in other words, it would be the worst thing in the world:
It's also becoming increasingly clear that the real goal of Democrats isn't to save jobs per se, but to tell Detroit what cars to make and how to make them. The goal is to turn GM and the rest into Big Green Machines that will stop making SUVs and trucks and start making small cars that run on something other than carbon fuel. If consumers don't want to drive them, well, the next step will be to impose subsidies or penalties and taxes to coerce them to do so. Giving the federal government an equity stake could also lead to protectionism, as the politicians attempt to shield Detroit's mismanaged assets from competition by citing the interests of the UAW, the environment, or some other "social" good that has nothing to do with making cars Americans will want to drive.
Here's what's wrong with that -- or one of the things wrong with it: As I've made clear, I'm against the bailout. But if there IS a bailout, provisions requiring Detroit to build cars that move us toward energy independence and maybe, just maybe, reduce greenhouse gases would be a GOOD thing about deal, not a bad one.
Moreover, if we the taxpayers are putting up the money -- which, we shouldn't, but if we are -- we have EVERY RIGHT in the universe to demand that Detroit make whatever kinds cars we demand. If we want them all to be purple and green two-tone three-wheelers that run on moonbeams, that by God is the kind of cars the recipients of OUR money ought to get. If the market demands some other kind of car, then the car companies that aren't taking our frickin' money can make them.
Of course, I also believe -- as the founder of the Energy Party -- that there would be absolutely nothing wrong with making it illegal to sell those idiotic land yachts that Americans have been driving for the past decade or so. SUVs are contrary to the national interest -- strategically and environmentally -- and I am utterly unmoved by anyone's argument that they should be allowed to help fund the next bin Laden to come out of Saudi Arabia's madrassas just because -- and this infantile "reason" is offensive to me in the extreme -- they WANT to.
Of course, the God-given right to fund petrodictators -- helping Mahmoud buy the Bomb, for instance -- while at the same time destroying the planet, for no better reason than some moronic desire to loom over the rest of traffic in a vehicle that can carry 8 times as many people as it ever actually carries, is of SUPREME IMPORTANCE to the editors of the WSJ. Nothing is more sacred. One gets the impression that if someone came up with a foolproof plan to capture bin Laden, neutralize the Taliban, stabilize Pakistan, turn our economy around 180 degrees, end man-made global climate change and make everyone in America a millionaire (without the currency losing value, mind you), the WSJ would be against it if it also included a requirement that CAFE standards rise.
At least the WSJ article was coherent. I couldn't make any sense out of the State's editorial on the subject. Seems like the only objection you have to it is because of timing. If the plan had gone through after the inaguration would that make it ok.
Posted by: bud | Wednesday, 10 December 2008 at 01:57 PM
Maybe you need to read it again, bud. Three major problems aside from that that jump out at me in re-reading it:
But as long as you mention "timing," do you consider it inconsequential that Bush would appoint someone (maybe, although that's unclear, with some input from Obama), and starting with three weeks into January, nobody would have ownership of this $15 billion turkey any longer? The idea seems to be to keep the collapse from happening on this watch, but not to do anything that would fix anything.
Apparently, you only see coherence in ideology.
Anyway, you know what? I've gotten really tired of this nonsense of me posting something in good faith, and bud and Doug and Randy immediately (or just behind Lee, which is almost the same as "immediately") go through all sorts of contortions trying to be just as critical and dismissive of whatever I say or do as they can possibly be.
Seriously, folks -- is this what you consider to be constructive dialogue? And if not, what IS your purpose?
With the election over, and me not having enough staff to do my real job, I've been thinking hard about whether the time I put into this thing is at all worth it. Y'all are helping me make up my mind.
Posted by: Brad Warthen | Wednesday, 10 December 2008 at 05:04 PM
Status of the haves as defined as keeping up with the Jones is about how much square footage you have in your house and the size and the amount paid for your vehicle.
Is there something wrong with this picture?
The two things that the taxpayers are being asked to bailout is housing and the auto industry (we will talk about the banking industry at another time). People have been approved for loans on housing and autos (status symbols of “moving up to the east side”.
If you have got to have the biggest house and the biggest most expensive auto, then why do the taxpayers have to bail you out when you cannot make the payments?
The people that sit in Washington today have no concept that the people that elected them was about having enough sense to save our country from total destruction from within. We are destroying our own country from within. How can we continue to protect industry that has no concept of what it takes to make industry profitable? The more you make as a CEO of a corporation should make you financially responsible for the ultimate survival of the company you represent.
Bottom line: Why would we bailout any industry that is built to provide people with the luxury of life that they think is about how much the square footing of your house is or how big your auto is?
So let us get one step further. Are those that live in the these mansions and send their children to private schools and belong to the country clubs going to have to pay for the bailouts of their own extravagancies?
Obama thinks so. He says that we have to equalize the distribution of wealth in his administration.
You will have to get to the common denominator. Split the wealth.
Come to think of it I might even take into consideration the woman that says when she is pumping gas that when Obama is elected she will not have to worry about her house payment and the gas prices because she voted for the man that will pay her back for her vote.
Posted by: slugger | Wednesday, 10 December 2008 at 05:06 PM
The Democrats are injecting poison pills into the bailout which guarantee its failure:
1. Tighter, arbitrary mileage standards, instead of letting the engineers build vehicles which customers tell marketing that they want to buy.
2. Defacto adoption of the ridiculous California CO2 standards, which will require a fleet average of 42 miles per gallon, a figure no vehicle manufacturer can meet. It will shut down Honda, Toyota, Kia, Hyundai, Subaru and all the imports. CO2 is not even proven to be any sort of environmental problem.
3. Mandates to "retool". A new model takes 5 years to bring to market. $15 Billion is 2 months of cash unless GM, Ford and Chrysler can cut costs drastically.
4. No concessions by unions, who have to take a pay cut equal Toyota and Honda plants on US soil, on a per-verhicle basis, which is no more than $43.00 per hour including all benefits. It will probably have to be lower than that, at least for a year.
5. No concessions by retirees. They have to give up not only all cost-of-living increases, but take a lump sum cash settlement of the remaining pension funds so the automakers can walk away from that cash drain.
Posted by: Lee Muller | Wednesday, 10 December 2008 at 07:04 PM
Brad, if you'll buy my used Yugo, I'll read your editorial again.
Promise.
Posted by: p.m. | Wednesday, 10 December 2008 at 09:04 PM
But, seriously, Brad, don't you see that the WSJ is right and you're right, too? The Democrats bailing out Detroit involves so many conflicts of interest that it's wrong no matter where you're coming from.
We needed the financial bailout for liquidity. Given liquidity, Detroit and UAW should work something out without an automaker bailout.
The Democratic Party running the Big Three would be something akin to George Bush telling the Beatles how to write songs. It just wouldn't work.
Posted by: p.m. | Wednesday, 10 December 2008 at 09:16 PM
One of the major problems with these bailouts is precisely that they DO make taxpayers stockholders. And of course our representatives in this capacity will be the clowns in the congress and senate. This alone is reason enough to refrain from bailing out the auto makers.
But beyond all that, the ridiculous idea that Brad Warthen, Barney Frank and Barak Hussein Obama know ANYTHING about the car manufacturing business and would presume to dictate what manufacturers must produce just puts things over the top: Please let's not bail ANY industry out if it means we only get products that meet Warthens standards of performance and acceptability.
I just can't take it. I don't think anyone who has gooned up congress as badly as Frank has, or has gooned up a newspaper the way Warthen has, is any any position to tell auto makers how to make cars.
Just sayin. Dave
Posted by: david | Wednesday, 10 December 2008 at 09:34 PM
The State's editorial makes the rational argument for being against the current incarnation of the auto bailout, sure enough. It's true. There's no real roadmap to accountability and future viability for the automakers. No real plan. An impotent President and an inane Congress are implicated together, not for acting, but for acting without bold, substantive strategy. The editorial makes this clean, clear point in a way that avoids the intellectual laziness of the WSJ/Sanford knee-jerk "government bad!" baloneyism.
This is an extreme difficulty. At the same time we are suffering through the last tired wheeze of a toothless, free-market ideologue President's resigned acquiescence to each new bailout dart his man Paulson insists has to be thrown, we also have the Congressional penguin parade led by people like Senators Levin and Stabenow, who don't have the guts to play a game of chicken with their own Big Three-dependent constituency.
Unfortunately we may have to wait til Obama comes out of the bullpen in January before we see some bold moves, if only for the sad, cynical reason that both Bush and Congress are looking for a fresh, clean desk on which to dump this steaming pile. The thing Obama does have in his favor is that rarely in history does an incoming President have so much latitude to take direct, intensive, massive action. And if Bush and the penguins are simply going to run out the clock, B.O.'s centrist economic team can use this time to sit down and draw a serious plan.
Posted by: jfx | Wednesday, 10 December 2008 at 09:38 PM
No one working on this seems to have a clear idea of what they're doing.
They seem determined to help Detroit keep going on its present course, with the current arrangements between current management and the UAW intact.
We see nothing in the deal that indicates any sort of plan for repositioning Detroit to be the home of automotive innovation, at a time when that is what the country needs. (Something the WSJ does NOT want to see happen.)
-Brad
Ok, this helps. Let's take these one at a time. First, the whole notion that "no one has a clear notion of what they're doing" is certainly true. That's kind of where we're at with the economy right now. Desparate times call for desparate measures and if everyone "knew what they were doing" we wouldn't be in this mess. Government would be easy if everyone had a crystal ball.
Second, keeping Detroit on it's current course. That decision really shouldn't belong to the government. I would have to side with the libertarians on this one. If the government is allowed to make the decisions then we may as well go ahead and become a true socialist state. Either give them the money with relatively few strings attached, or not give it to them at all. I could go along with restricting CEO salaries and re-negotiating the labor contract. But requiring them to build the type of cars a government bureacracy mandates is a bit much for me to swallow.
The third point essentially re-states the second. If Detroit is that incapable of building cars then they should be allowed to fail.
Brad, I guess what bothered me about the State's position is really a fundamental flaw with many State editorials. It came across as a purely government-based solution without any mention of free-market innovation.
The point about the timing stood out as particularly out of place. We have to either decide to save the industry or just let it fail. If we decide to try and save it then we have to have faith that it is fundamentally worth saving NOW. That's the issue. All these restrictions are overkill.
In any event I probably side with both the State and the WSJ. Let em fail.
Posted by: bud | Thursday, 11 December 2008 at 06:08 AM
GM is selling as many vehicles as Toyota.
Toyota made $17 BILLION in profits in 2007.
GM lost $38 BILLION in 2007.
So GM is making vehichles which customers want.
The problem is not cost of production, because GM plants are just as modern and efficient as Toyota or Honda. I know. I have worked in a bunch of them as a consulting engineer in automation.
The primary problems are:
1. Ridiculous pension obligations which GM cannot pay, because it is not making a profit outside of those pension costs.
2. Labor burden cost for current workers is $73.40/hour, versus $43.00/hour for Toyota, and Honda in UAW plants, and lower for BMW and Mercedes in non-union plants. All of them have a large component of union plants supplying them.
3. Unwarranted emissions regulations.
From 1970 to 1990, we have removed 97% of tailpipe pollution. The last 3% is not a problem. CO2 is not a problem at all. There is no social benefit to tightening the emission standards after 1990, much less the continued tightening since then. None.
4. Absurd safety regulations, which prevent a lot of new cars being developed by small companies. You have to sell at about 60,000 cars to recoup the tooling and safety costs. That is the entire lines of Saab and Volvo. It stifles innovation.
5. Abitrary CAFE standards. There is no social benefit to dictating car size or miles per gallon. All the money we are saving in oil not imported is lost threefold in balance of payments deficits due to imported vehicles.
The governments are killing our automobile industry, and if they finish it off, the trade deficits will dwarf all that due to importing oil. It will put 5,000,000 people out of work and leave us unable to provide for our national defense.
Posted by: Lee Muller | Thursday, 11 December 2008 at 11:10 AM
Sadly, there are millions of Americans that believe the fantasy laid out by Muller. The U.S. auto companies are bloated, inefficient montstrocities. There are certainly excessive costs but it's mostly at the top, not the rank and file workers. Fact is, many US cars are now built in Mexico where labor costs are lower than what Toyota and Honda pay in the U.S. GM failed to downsize when it was obvious they needed to do so. Why on earth do they continue to build both Pontiacs and Buicks, cars that are essentially the same?
And of course Toyota and Honda have to meet the same environmental and safety standards that GM does. Thanks to the government and Japanese auto makers the whining auto companies finally began to respond to the urgent need to build cleaner safer cars. It's not where it should be but it's better than it was. The safety history of the U.S. automakers is one of disgrace. Just go read about the Corvair, Pinto and Bronco II. Those horror stories illustrate the arrogance and greed of corporate America. Ford was willing to pay the legal costs of being sued by the families of people who were incinerated rather than spend a few bucks to keep the Pinto from exploding on impact. Shameful, just shameful.
And now the greedy bastards want us to bail them out. I say not just no, but HELL no!
Posted by: bud | Thursday, 11 December 2008 at 11:25 AM
The opinons of "bud" are baseless and examples of the ignorance and bigotry many people have, who have never worked in an or around an automobile factory. There opinions are based on propaganda fed them by business-hating leftists in office, the media, and the classroom.
The primary "greedy bastards" in this tragedy are the uncompromising union members, UAW retirees, politicians, doctrinaire environmentalists, and anti-American socialists who enjoy bringing down American industry.
Posted by: Lee Muller | Thursday, 11 December 2008 at 11:37 AM
Note: I apologize upfront for sidetracking what is yet another discussion on the evils of following libertarian ideologies.
Lee, a couple of points for you, sir:
1. Your first two points are agreed on my most so nothing to discuss there.
2. Your third point is very interesting. Could you provide a link to that info? That's certainly an impressive statistic if true.
3. Do CAFE standards not apply to imported cars? That seems to me to be what you are implying.
4. I must take issue with your last paragraph. First, though the trade deficit would certainly increase in such a scenario, I simply do not see the great evil in that. Maybe you do and you can spell it out for me. Second, though lots of jobs will be lost, don't you believe that all the extra capital and available labor will find its way to a more worthy industry or organization? Isn't that what free market economists like yourself believe? Third, "unable to provide for national defense"? Really? How many combat vehicles do the Big Three produce? I believe that number is virtually ZERO. I'm not saying a collapse of the Big Three would have no adverse effect on our military automotive sector, but to say that we will be "unable to provide for national defense" is completely ridiculous.
Posted by: Birchibald T. Barlow | Thursday, 11 December 2008 at 12:25 PM
This is what substitutes for reasoned analysis in our government in regards to the bailout bill:
"Barbara Boxer, a few minutes ago on the Senate floor: "...this is the christmas season. My goodness, let's take a chance on this. Let's take a chance on this." "
Seriously. She wants us to take a chance on whether spending $15 billion dollars of other people's money will save an auto industry that has created its own financial crisis.
Hey, Senator Boxer - why don't you offer to resign from the Senate and give up YOUR pension if it doesn't work?
Posted by: Doug Ross | Thursday, 11 December 2008 at 01:11 PM
How is a doctrinaire environmentalist "greedy". You could argue they are misguided perhaps, but Greedy? None make a dime on pollution regulations. Fact is our air is much cleaner now than it was in the 1960s and that is 100% the result of government intervention prompted by "doctinaire environmentalists". God bless them.
Posted by: bud | Thursday, 11 December 2008 at 01:14 PM
Actually, air and water standards were more strict under English Common Law, but legislation overrode this during the Industrial Revolution, both in England and America.
No one is arguing that the air is not cleaner today than it was in the 1960s. Most of those bellyaching hysterically about clean air and clean water are not old enough to remember the 1960s, much less from Los Angeles or Pittsburgh. I do. They just "know" what they were told by propagandists.
The bottom line is that there is nothing to be gained by pursuing the last 3% of vehicle tailpipe emissions. We are at the limit of what can be achieved on an internal combustion engine, and it is mighty good. Regulations since 1990 are just a waste of money and engineering resources.
The California CO2 proposals cannot be met by any vehicles which have any practical market possibilities. They are senseless.
Those harboring the pipe dream of a "hydrogen economy" or "zero emissions" need to realize that electric and fuel-cell vehicles are only useful in less than 10% of miles-driven applications, and less than 20% of the 70,000,000 vehicles in America can be replace by them.
Also, it will require dozens of new nuclear plants to produce the electricity for these new engines, and it takes 8 years to design, build and license a nuclear plant, without inteference by so-called "environmentalists".
Posted by: Lee Muller | Thursday, 11 December 2008 at 02:14 PM
Mr. Barlow,
I am confused by your numbering system, but I will answer your last point, then the others in separate posts, as I understand your question.
GM, Ford and Chrysler produce a lot of military vehicles, have at times produced ALL of them, and in a major war, we would need some large manufacturers with the capability of being second and third vendors.
During World War II, all the auto makers built trucks and Jeeps (except the inventors of the Jeep). All the vehicle manufacturers also produced machineguns and M1 carbines. So did Rockola (juke box), Smith-Corona (typewriters), and IBM (time clocks).
Everyone remembers Jeep. GM owns Hummer. AM General, maker of the Hummvee, is descended from American Motors, which was run by Mitt Romney's father, George Romney. Chrysler developed the early engine designs in the 1960s which are used in the Abrams tank. Many of the current vehicle plants were spun off into separate companies from the Big 3, in order to be insulated from labor walkouts against the car plants. There is still a huge military vehicle and motorized cannon development center in Michigan, and Ford, Chrylser and GM all have their own military vehicle R&D facilities nearby.
What makes anyone think we can have a bunch of small speciality vehicle suppliers to the military, without a larger vehicle manufacturing base underneath them? The answer is, they haven't thought about it.
Posted by: Lee Muller | Thursday, 11 December 2008 at 02:25 PM
Lee is probably correct in his discussion of the big three's role in military vehicle construction. By why do we need all this crap? What a waste of money. If we can't build the stuff then maybe we won't get into so many useless wars.
Posted by: bud | Thursday, 11 December 2008 at 03:39 PM
What makes anyone think we can have a bunch of small speciality vehicle suppliers to the military, without a larger vehicle manufacturing base underneath them? The answer is, they haven't thought about it.
What am I not getting? How can an industry worth however many billions of dollars not support itself?
Would some suppliers go away? Sure. Would prices increase? Sure. Would this cause a great security threat and render us unable to provide for our national defense? I am not convinced.
Posted by: Birchibald T. Barlow | Thursday, 11 December 2008 at 04:24 PM
Yeah, "bud" - Barack Hussein Obama will just ask Al Qaeda to stop attacking us because we no longer have automobiles and trucks. He'll sic the terrorists on Korea and Japan.
Maybe he should get Hollywood to stop making pornography and piping it into the Islamic world, since they said that was what offended them.
You think I might be correct, "bud"? Wow! I only worked as a consultant to automobile manufacturers in America, Japan, Germany, France and Italy for 20 years. The sad thing is, the Democrats' "Car Czar" won't know any more about the industry than some than the average Congressman or landscape worker.
Posted by: Lee Muller | Thursday, 11 December 2008 at 04:26 PM
come january BHO will retool the auto industry to make windmills and create all those green jobs he was talking about.
Posted by: bluebunny | Thursday, 11 December 2008 at 05:40 PM
Anyone who thinks that CO2 is "not a problem at all" needs to read up:
http://lwf.ncdc.noaa.gov/oa/climate/globalwarming.html
...and understand that, even if the US gets its emissions under control, this thing is a runaway train in Asia, Africa, and even parts of the rest of the Americas...
...unless somebody changes the paradigm, and leads the world in a better direction. And fast.
Lee, you're right that we've reached the limits of the internal combustion engine. Mainly because we've reached the limits of a fossil-fuel civilization, to the point of jeopardizing entire ecosystems, including virtually all of the ones humans live in and rely on for food.
This auto-bailout stuff seems like a big deal because of the economic shockwave that will circle the globe if/when the Big Three crash out. But the economic meltdown is chump change compared to what will happen to our kids and grandkids without transformative energy and environmental awareness on a global scale. Ironically, that heightened awareness is exactly the the thing that can create a window of opportunity for unlimited new industries and jobs.
It is certainly heartening to see that Mr. Obama has picked an actual, literal expert on energy and matter...a Nobel physicist...as his energy secretary. That's thinking big.
Bush's first energy secretary, Spencer Abraham, was...just like his boss and the boss's veep...a stooge for Big Oil.
And being a stooge remains immensely profitable:
http://www.abrahamgroupllc.com/
Posted by: jfx | Thursday, 11 December 2008 at 06:10 PM
Brad, aside from my criticism of your myopic support of McCain, I only challenge your positions.
Regarding the bailout, I am confused as to your analysis. This is not simply an opportunity for tree huggers to impose their will. The Big 3 are largely in this predicament because they haven't evolved to meet the demands of a greener country.
The oil and gas problems in the 70s, along with a difference in quality thanks to Deming, allowed Japan to gain a foothold in the auto market. Detroit kept their heads in the sand these past 30 years by relying on SUV and F150 sales.
If the government is going to bail them out, they want to make sure the money is used wisely. Going green is good business sense.
As Obama has explained, the country is hemorrhaging jobs; Stanley, BofA, Office Depot, Sara Lee etc. The last thing we need is a major company going down along with hundreds of thousands of more jobs.
Posted by: Randy E | Thursday, 11 December 2008 at 07:58 PM
Randy, any auto bailout is a payoff to UAW, pure and simple. If UAW's deal doesn't change, if the help in Detroit won't work for what Toyota workers in America get paid, the bailout just puts off the inevitable briefly.
I resent Democrats buying votes after the fact with my money. Capiche?
Posted by: penultimo mcfarland | Friday, 12 December 2008 at 12:36 AM
Funny how everyone on the right keeps harping on this UAW business. Rank and file labor is only one part of the cost structure of the auto industry. Why not devote a bit of attention to the NON-UAW part of the labor cost. Heck the top paid CEOs probably make as much as 50 line workers. Why should they be ignored in all this? And what about those corporate jets? How about those decisions to build elaborate headquarters buildings? The right in this country is so predictably a one trick pony on every issue. Please folks, stop listening to Rush Limbaugh so much. He really doesn't know what he's talking about.
Posted by: bud | Friday, 12 December 2008 at 08:49 AM