Friday, December 12, 2008

Michael Moore weighs in on the Senate's failure to pass the auto loan

For once, I agree with Michael Moore. His take on the auto industry loan is worth reading, only if to the see the truth through one of America’s great storytellers.

Thursday, December 11, 2008

Question for Richard Shelby: Can we call you Dick?

Richard Shelby: Can we call you Dick? If we may, then why, Dick, on Fox News recently, why would you lie—and then let people know you just lied—about your interest in helping foreign companies at the expense (via neglect) of the U.S. automanufacturers?

Wallace: Do you have as Sen Levin has said an agenda to help your local foreign auto makers?

Shelby: I don't have an agenda, but I'll tell you this, in the South, from South Carolina to Kentucky, Georgia, Tennessee, Mississippi, Texas, we have about 124,000 people employed in the automobile industry. They are competing. They are competing. GM, Ford, Chrysler can compete, but not under the model that they have now [Ed: that part is true]

124,000 is very specific number. Where did you get it if you don't have an agenda?

You know, Dick, the Hyundais and Toyotas and Hondas and Mercedes of the world come from countries where their Federal governments pay for workers healthcare. For better or worse, the U.S. largely does not. So when the Big Three could, they paid for their workers healthcare.

Wasn’t that terrible? U.S. citizens . . .or let me put this another way . . . voters, had their healthcare provide for if they got a job working for the Big Three.
And these same companies paid into large pension funds to help fund their retirements. I know Alabama workers would have like that, wouldn’t they?

Two points: one, the playing field isn’t level and GM, Ford and Chyrsler are very much trying to shed these legacy costs (lower standards of living for American blue collar guys, isn’t that awesome? I frankly do not want the guy next to me at the gas pump to make Chinese or Mexican wages; yes, the entitlement mentality must go, but I wish poverty on no one).

But you can’t just turn the spigot off, Dick; two mega forces (the formerly Big Three and the UAW) regrettably have to work at at rate I’ll call “hastened incrementalism.”

As Wagoner testified, the margin of labor costs between Toyota and GM will be essentially nothing come 2010. It’s happening. We all wish (except those UAW families) that it had happened sooner.

Point two: even though you’ve got some 100K plus employed by foreign interests in the South, the vast majority of the vehicles goes back to Korea, Japan and Deutschland AG. Dick, they’re foreign. That means the money, too, is mostly shipped back to foreign interests--that is non-American interests, Dick.

Yet you sit wobbly on your throne of sorgum on C-SPAN talking about the purity of capitalism, and how the beauty of it is that some companies rise and succeed and others fail.

But you didn’t point out that you interferred with the market by supporting millions in subsidies to these foreign interests by way of tax abatements(remember, if you believe the UAW, labor is only 10% of the cost of a new car, which means most of the money flows out of the U.S.).

To better understand the gross hypocrisy of Dick Shelby, undoubtedly ghost written for Compuware Chief Peter Karmanos by my former boss, read on. Jason knows how to make a point (and if you somehow see this Pella, Iowa, let me know what you're up to these days).

Friday, December 5, 2008

Today's Hero on Capital Hill: Jeffrey Sachs

Today’s superhero in the bridge loan debate on Capital Hill is Jeffrey Sachs of Columbia’s Earth Institute. This guy laid down such incredible smack not only some of the idiocy and hypocrisy on the Hill on the current crisis, but put the perspective on Citi Group and other financial giveaways that ballooned into the hundreds of billions of dollars with no strings attached with no calls for bankruptcy. I’m going to find his opening statement when it’s up and post it, it’s phenomenal.

Sachs pointed out something not yet heard that deserves attention: the auto industry is the largest industry in the U.S., and that governments globally are injecting billions into their own country’s auto industry. This guy just kicked ass (sorry Mom). Lucid, forceful, zero pretense . . . Professor Sachs, you Sir, were a surprise and delight of the first order. This guy salutes you.

Thursday, December 4, 2008

Mark Zandi: New Detroit Superhero

This guy should be on everyone’s radar in Detroit, the Midwest and taxpayers in general.

Dr. Zandi broke it down in simplist terms: the bailout loan will be pricey, and could be even as much as $75M to $125M . . . but letting GM, Ford and Chysler slide into oblivion will cost taxpayers much, much more.

It’s that simple.