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View Full Version : Obama to Detroit: Drop Dead


nikkibong
03-30-2009, 07:19 PM
Forgive me for going all Glenn Beck here (sniffle, sniffle), but there seems something reprehensible in President Obama's continued unqualified financial support for the banks (http://www.moneymorning.com/2009/03/30/geithner-banks/), while simultaneously screwing over Detroit (http://online.wsj.com/article/SB123841609048669495.html) and the autoworkers.

Why did Rick Wagoner (base salary $1 per year) have to go - but Kenneth Lewis of Bank of America (base salary $1,500,000 a year) - get to stay?

Of course, this is isn't about the CEOs: this is about the Obama administration protecting Wall Street jobs while cutting auto workers loose.

Lame.

graz
03-30-2009, 07:28 PM
Forgive me for going all Glenn Beck here (sniffle, sniffle) ...
Lame.


Nothing to forgive... But what exactly is lame in your opinion. Your apples and orange comparison doesn't treat the distinctions fairly.

These quite separate entities are being restructured in dissimilar but real ways.
Well maybe your populist jab is Beckian after all.

TwinSwords
03-30-2009, 08:22 PM
Forgive me for going all Glenn Beck here (sniffle, sniffle), but there seems something reprehensible in President Obama's continued unqualified financial support for the banks (http://www.moneymorning.com/2009/03/30/geithner-banks/), while simultaneously screwing over Detroit (http://online.wsj.com/article/SB123841609048669495.html) and the autoworkers.

Why did Rick Wagoner (base salary $1 per year) have to go - but Kenneth Lewis of Bank of America (base salary $1,500,000 a year) - get to stay?

Of course, this is isn't about the CEOs: this is about the Obama administration protecting Wall Street jobs while cutting auto workers loose.

Lame.

Yeah. Very disturbing.

People who are at all familiar with American politics aren't surprised, and have long recognized that there is no liberal party in the USA. There is no labor party. There is a conservative, pro-business party, and there is an extremist/lunatic party.

Turns out that if you're a liberal, or if you care about the working class, or if you want to preserve the middle class in this country, you basically have no options. Still, we vote for the conservative business party to avert the complete catastrophe that occurs whenever the lunatic/zealot party is elected.

I realize that the above defies conventional wisdom (everyone knows the Democrats are socialists), but if you want to understand how America's political system works in reality, start by reading Who Rules America? (http://www.amazon.com/Rules-America-Politics-Social-Change/dp/0072876255/ref=sr_1_1?ie=UTF8&s=books&qid=1238455220&sr=1-1)


DISCLAIMER: I have not read the news of Obama's decision on Detroit in detail. I heard the headlines on the news this morning before work, haven't read anything more about it since getting home a few minutes ago, and reserve the right to amend or retract my full-throated agreement with the spirit of your remarks later, if it turns out to be "not as bad" as it looks to me right now. In other words, this is my unvarnished gut reaction, and I could be wrong.

Still, it's a great book (http://sociology.ucsc.edu/whorulesamerica/), long on empirical data and detailed, factual history, and short on ideological bloviating and empty assertions.

TwinSwords
03-30-2009, 08:31 PM
Graz,
I guess the proof of the pudding is in the eating. The enemies of the American middle class have wanted to see GM and Chrysler forced through bankruptcy as a way to destroy the UAW, and to deliver another blow to the American middle class. If Obama somehow figures a way to help GM and Chrysler reorganize without shafting the UAW, he will have my thanks. But right now, it looks to me like Geithner's class of people have decided to stick the knife in the backs of working class people -- the same ones who got Obama elected.

Don't get me wrong: In our two party system, we have no other choice. If Obama came out and declared he took personal satisfaction out of every union job lost to China and Mexico, he'd still be better than the party that gave us torture, two failed wars, a Supreme Court dominated by the likes of Scalia, a Justice Department controlled by graduates of Pat Robertson University, and scientific agencies infiltrated by creationists.

We just have to take some solace in the fact that change occurs slowly -- over decades and centuries, and that most change starts in the culture and is only later reflected in law. Government is a lagging indicator -- not a leading one.

Lyle
03-30-2009, 09:02 PM
Banks are simply more vital to the economy than General Motors. That's there and other peoples' argument. I tend to agree.

graz
03-30-2009, 09:20 PM
Graz,
I guess the proof of the pudding is in the eating. The enemies of the American middle class have wanted to see GM and Chrysler forced through bankruptcy as a way to destroy the UAW, and to deliver another blow to the American middle class. If Obama somehow figures a way to help GM and Chrysler reorganize without shafting the UAW, he will have my thanks. But right now, it looks to me like Geithner's class of people have decided to stick the knife in the backs of working class people -- the same ones who got Obama elected.

Don't get me wrong: In our two party system, we have no other choice. If Obama came out and declared he took personal satisfaction out of every union job lost to China and Mexico, he'd still be better than the party that gave us torture, two failed wars, a Supreme Court dominated by the likes of Scalia, a Justice Department controlled by graduates of Pat Robertson University, and scientific agencies infiltrated by creationists.

We just have to take some solace in the fact that change occurs slowly -- over decades and centuries, and that most change starts in the culture and is only later reflected in law. Government is a lagging indicator -- not a leading one.

I guess the proof of the pudding is in the eating.
Nice usage, Brendan will be appreciative.

The enemies of the American middle class have wanted to see GM and Chrysler forced through bankruptcy as a way to destroy the UAW, and to deliver another blow to the American middle class.
I agree and am sympathetic to the threat to unions in general, which enable a middle class. The problem is with the viability of the actual product being offered.
Wagoner wasn't cutting it. I believe his 20 million dollar pension will cushion his blow.

My original response was to nikkibong's sensational headline:Obama to Detroit: Drop Dead I know he is a fan of Huff Po and The Beast, and as a writer may be auditioning for a headline writing post.

The point remains that it is not as simple as saying that the approach used for the banks is denied the auto industry. But, I think we can agree that the loss or re-contracting of a union job is a greater blow for the GM worker than the losses in the banking industry. Although that sector has been hit hard as well.

bjkeefe
03-30-2009, 09:27 PM
Nice usage, Brendan will be appreciative.

Heh. I saw this right after gushing thanks (http://bloggingheads.tv/forum/showthread.php?p=108469#post108469) to Heather and Dan. Thanks to you two, too.

TwinSwords
03-31-2009, 08:20 AM
Olbermann on Obama's plan for GM and Chrysler:

http://www.youtube.com/watch?v=mHGU5vOfOrs

With past Blogginghead Daniel Gross.

bjkeefe
03-31-2009, 08:43 AM
Olbermann on Obama's plan for GM and Chrysler:

http://www.youtube.com/watch?v=mHGU5vOfOrs

With past Blogginghead Daniel Gross.

That clip was a monument to populist oversimplification.

graz
03-31-2009, 11:25 AM
MY offers some perspective on the Auto plan:
http://yglesias.thinkprogress.org/archives/2009/03/the_obama_auto_plan.php

Twin,
Your fears about a shrinking workforce are well founded. At best some jobs could be salvaged and a resurgence possible over time if the economy grows.
This still seems better than the alternative of a complete failure. I'm guessing that you will find agreement with this commenter, if not comfort.

# Jonah Says:
March 30th, 2009 at 6:55 pm

I’m of two minds on this one…

On one hand, the fact that the Michigan/Rust Belt economy has been for so many decades based almost solely on automobiles has sort of set the area up for this kind of crisis–it is, in a way, a long-drawn-out “car bubble.” Lack of a diversified economy tends to subject the people of a state or region to greater suffering in bust times, as their singular source of prosperity falters and they have nothing to fall back on. Furthermore, the people running these companies have done an outstandingly poor job keeping up with the progress that has taken place in the industry elsewhere in the world, and have acted–again in the bubble mentality–as though their short-term formula for success would last forever. They messed up big time, and have to pay the price–unfortunately, so do their employees.

Which brings me to the other hand. I have to agree with the voices of rage in the blogosphere who compare the government’s handling of Detroit with that of Wall Street and notice that the latter is getting off quite easily while the former seems to be getting a pretty raw deal. The injustice is magnified by the fact that while losing one’s job at an investment bank is a setback, losing one’s job at an auto plant is a ticket to poverty. While the banks have gotten some sweet deals from their former colleagues in Washington, the auto workers’ union seems to be regularly blamed for a lot of things that can’t entirely be their fault. Is it class warfare? Possibly. After all, historically speaking, such crises never impact the wealthy as deeply as the working class, and heaven knows the government doesn’t really work for the common man to the degree it claims.

On the third hand, these people are going to lose their jobs regardless. Still, it’s pretty criminal that Wagoner is getting a $20 million retirement package while the little guys are being forced to give up their pensions and health insurance. Yeah, it’s class warfare. As usual.

Bourgeois scum.

bjkeefe
03-31-2009, 11:38 AM
[...]

You, Matt, and Matt's commenter say what I was trying to say above with a one-liner. Thanks for pitching in.

[Added] I'd also say that the American car industry has been propped up by the government for decades now, from a long period of protectionist regulations to more recent stretches where things like mileage standards were not strengthened and existing regulations were winked at (e.g., SUVs not having to meet the same pollution standards as cars). The old joke about a new government regulation causing Toyota to hire 100 more engineers while GM hired 100 more lawyers is dead-on.

While I really feel for the workers who will be affected, it just doesn't make sense to keep propping up a structure that apparently cannot stand on its own. It's a shame we did do this for so long, because it only made the crash worse, but I think the time has come to acknowledge the reality of that situation and figure out how best to deal with it.

graz
03-31-2009, 12:13 PM
I'd also say that the American car industry has been propped up by the government for decades now, from a long period of protectionist regulations to more recent stretches where things like mileage standards were not strengthened and existing regulations were winked at (e.g., SUVs not having to meet the same pollution standards as cars). The old joke about a new government regulation causing Toyota to hire 100 more engineers while GM hired 100 more lawyers is dead-on.

While I really feel for the workers who will be affected, it just doesn't make sense to keep propping up a structure that apparently cannot stand on its own. It's a shame we did do this for so long, because it only made the crash worse, but I think the time has come to acknowledge the reality of that situation and figure out how best to deal with it.

I agree with all you have posted. But how do you counter the argument that the largesse offered the banks is the same as what is being denied the auto industry? In other words: Is it a class warfare issue?

It seems obvious to me that the first order of business for any success is a plan for bolstering the economy. The banks and their liquidity are an essential element of the recovery. Further, there isn't a single authority, able to guarantee what "the" definitive approach ought to be. As an atheist I would never advise blind faith, but some perspective should be applied to the assessment of the so called favoring of banks and Wall Street.

bjkeefe
03-31-2009, 01:15 PM
I agree with all you have posted. But how do you counter the argument that the largesse offered the banks is the same as what is being denied the auto industry? In other words: Is it a class warfare issue?

It seems obvious to me that the first order of business for any success is a plan for bolstering the economy. The banks and their liquidity are an essential element of the recovery. Further, there isn't a single authority, able to guarantee what "the" definitive approach ought to be. As an atheist I would never advise blind faith, but some perspective should be applied to the assessment of the so called favoring of banks and Wall Street.

I would say that we should resist the emotional aspect -- the obvious sense of unfairness -- because the two industries' problems really ought not be mingled. They are separate issues and should be addressed separately.

I would also say that until things got out of control over the past couple of years, the American financial services industry has been successful and self-sustaining. Yes, they've gotten all manner of favorable treatment around the edges regarding taxes, oversight, and regulations, from their bought and paid for members of Congress, but even apart from that, that industry worked. The problem, to simplify, was that they got greedy -- they had a goose laying golden eggs and tried to double her output. The same cannot be said for the American auto industry.

Third, it is far from clear to me that we're doing the right thing in dealing with the problems of the financial industry, but to the extent anyone thinks it's wrong to be shoveling money at them, this hardly seems a plausible argument for doing the same bad (by assumption) thing in another place.

Fourth, if my understanding of the stakes is correct, a collapse of the auto industry will <strike>impact</strike> (hah (http://bloggingheads.tv/forum/showthread.php?p=108545#post108545) hah (http://bloggingheads.tv/forum/showthread.php?p=108575#post108575) hah (http://bloggingheads.tv/forum/showthread.php?p=108583#post108583)) affect a few hundred thousand to a few million people. Horrible, to be sure, but a collapse of the financial services industry will affect hundreds of millions, if not billions, when you count the worldwide ripple effects.

Ultimately, it may well be that the best thing in an abstract sense would be to let the financial services industry collapse, too. If we had a couple of years' worth of reserves to feed, clothe, shelter, and otherwise care for nations' worth of individuals who don't already have millions in the bank, I'd say, let that happen. But I just don't think we can afford to, in reality. For all of the problems associated with this industry, I believe it has to be stabilized in the near term and fixed in an ongoing matter. Letting GM and Chrysler go into bankruptcy -- if that's to be their fate -- will hurt, and that'll be a big problem, but I do view it as manageable. Letting the financial services industry fall apart on its own, by contrast, could well bring down the entire economy. Again, to the extent that I understand it.

Finally, I voted for Obama because I trusted him to be able to put together a team who could do the right things. While it's probably true that Obama has taken more money from the financial services industry than from the automotive industry, I think it's too pat to say this explains everything (and ignores, among other things, that union support is also important to him). Therefore, I think he is honestly trying to do what's best, subject to the constraints of the mess he inherited and the realities of our political system. In particular, I trust that his people looked at GM's plan, saw it was the usual reapplication of lipstick on the usual boilerplate, and rightly called it for what it was. I'd bet tall dollars GM's "plan" looked a lot like the GOP's recent "alternative budget," and I'd also bet that when people in the White House were reading it, the phrase underpants gnomes was said out loud, more than once. Just a guess, admittedly, but one informed by thirty years of watching GM's management's antics.

And remember, GM still has another two months for its management to get its act together. It's entirely possible that this first offering by them was a bluff of sorts, to see if they could get the Administration to let them get away with not doing whatever it is they really will have to do.

To your question, "Is it a class warfare issue?", I would say, meh. This is 50% an empty sound bite (which, you have to admit, you hate as much as I do when the GOP uses it in other circumstances) and 50% "true, but whaddya gonna do?" The rich have always had more power and access to power. We're not going to change that overnight, and certainly not by making the fat cats of Detroit into the new paragon of all that is good about working class values.

graz
03-31-2009, 01:24 PM
bjkeefe:[...]
Thanks for your considered input.

TwinSwords
04-01-2009, 04:46 AM
That clip was a monument to populist oversimplification.

That comment was a monument to snobbish condescension.

bjkeefe
04-01-2009, 05:17 AM
That comment was a monument to snobbish condescension.

Maybe. Or maybe it was just an honest reaction to what I saw as a painfully superficial analysis that did far more to mislead than illuminate. In any case, I expanded upon what motivated me to say it elsewhere in this thread, in my discussion with graz. Perhaps you'll make the effort to read it.

==========

[Added] To elaborate on something I mention in my discussion with graz, I think you should also keep in mind that I am not in any way saying the unfortunate workers and those connected to them are beneath notice or worry. On the contrary, I feel a great deal for them. The problem is, there is no evidence -- and not even a plausible suggestion -- that I've ever heard that describes how the government continuing to prop up GM and Chrysler as they continue to do business in their usual way does anything good for the workers. As far as I can tell, the best possible outcome is that some of them will be able to keep their jobs for a short while longer, while likely having to give concessions won in earlier negotiations, and dealing with the core problems will only be put off. And for what? Six months? A year?

Even this not-at-all-good best possible scenario will cost a lot of money, and most of that money, I strongly suspect, will go into the pockets of people who already have plenty.

As I've said elsewhere (http://bloggingheads.tv/forum/showthread.php?p=104258#post104258), if the government is really interested in spending money to help the autoworkers, it'd be a lot more efficient to let the companies die a natural death and make payments to the workers directly.

TwinSwords
04-02-2009, 07:58 PM
The Bankrupt Future of the Auto Industry
01 Apr 2009 01:13 pm

So now we're hearing that Obama doesn't think bankruptcy can be avoided by the auto firms, and no wonder--March brought yet another round of abysmal numbers on auto sales, both here and in Japan. A car purchase is simply too easy to delay, especially with credit constrained for the bottom 30% or so of the market.

If Obama follows through, and actually puts the companies into bankruptcy, I'll be awfully impressed--it's hard for any president to give up Michigan, but especially for a Democrat who wants labor support. So then the question is, what next? Which marques go? Buick, for sure, and Pontiac. Which plants close? And what is the government going to do to help autoworkers? They're not just out of a job--they're stuck in a state that will be absolutely devastated by these closures. Their houses will be worth almost nothing. What do you do with a 50-year-old auto worker who has lived in a factory town all his life?

Perhaps the hardest part is the delight over this massive human suffering being taken by ideological opponents of unions, or cafeteria environmentalists with an axe to grind against the companies that make cars differently than they would, or the snobs who think working people should expect to live in poverty unless they can get a college degree — to say nothing of the rafts of people who have never devoted 3 sustained minutes of thought to the topic of the auto industry, but who nevertheless now can confidently declare that the only solution is to allow the whole thing to collapse, causing millions to suffer.

(Source (http://meganmcardle.theatlantic.com/archives/2009/04/the_bankrupt_future_of_the_aut.php) / Via (http://andrewsullivan.theatlantic.com/the_daily_dish/2009/04/the-human-cost.html))