Mar 30 2009
Dumb & Dumber
Earlier I posted on the missteps of the far right in building a coalition of opposition to the far left lurch of the Democrats in the White House and Congress, but whatever is in the water in DC has the place just running amok. Word is out that Obama and the Dems are now dictating not only who can manage this country’s major corporations, but actually blackmailing one of our premier companies to be literally bought out by a European company:
President Barack Obama is sending a blunt message to Detroit automakers: To survive – and win more government help – they must remake themselves top to bottom. Driving home the point, the White House ousted the General Motors chairman as it rejected GM and Chrysler’s restructuring plans.
…
Frustrated administration officials, speaking on condition of anonymity ahead of Obama’s announcement, said Chrysler has been given a 30-day window to complete a proposed partnership with Italian automaker Fiat SpA. The government will offer up to $6 billion to the companies if they can negotiate a deal before time runs out. If a Chrysler-Fiat union cannot be completed, Washington plans to walk away, leaving Chrysler destined for a complete sell-off.
All those union robots who towed the liberal Democrat line are probably now just beginning to realize what is happening to their livelihoods. To force a US company to be sold to a European one is just insane.
But of course the far rights’ cries of Nazism are just as ludicrous. Instead of taking this opportunity to show reasoned and thought out alternatives, these knuckleheads are exaggerating to the point no one can take them seriously. Look, this is bad but we don’t have Nazi rule – yet.
I liken this to how you want a doctor to react when dealing with a life threatening cancer. The doctor who you can believe in calmly discusses the problems, risks and trade offs. He offers you (the patient) a calm and thought out assessment of the situation and options.
If the doctor came in screaming “this is horrible, you could be dead any minute now, we need to start carving here and now, we’re not sure but we think if we start removing things it will get better” any sane person would walk away to find a reasoned voice.
The batch of ‘leaders’ we have right now are simply running around pushing the panic buttons – which is why no one is finding DC helpful right now. Obama and the liberals democrats are bungling badly. When Clinton bungled badly the GOP (with guidance from Newt Gringrich) provided reasonable options. They were not radical steps, there were not cries if impending doom, there were not claims of the second coming of Hitler.
People need to stop running off half cocked and start coming up with serious options which can garner broad support from the center of America. Nothing else can stop this insanity. Sadly, the people getting all the press are just the opposite. This country is not being well served by leaders right or left. All of them are just flailing away. What, pray tell, is firing the CEO of GM and forcing the selling of Chrysler going to do to fix the current mess?
Nothing.
The most ludicrous part of this is that Fiat is a failed company from the most failure prone country in the EU. Has anyone noticed that Fiats have not been sold in the US for many years not? That’s because they are lousy cars from a lousy, broken and broke company! And this is going to be the savior of Chrysler?
Notice that Fiat has never been willing to put any of it’s own money into this – that’s because it doesn’t have any. Here’s an old piece of business wisdom – 2 bricks sink just as fast as one.
Actually, I’m a bit more positive about the Obama administrations announcements than many, simply because I see it as a required 30 day countdown to bankruptcy and then liquidation for Chrysler. There is no chance that this Fiat merger works; there is no chance that Chrysler survives in any form. The sooner we can get to that point, the sooner we can deal with the other problems we have.
There was a line from the administration in the announcement regarding Chrysler today: Most secured debt and all unsecured debt will have to be liquidated as part of a restructuring.
That’s a death sentence for Chrysler, which will be carried in 30 days.
So Congress has virtually bankrupted the auto industry. Next in line will be the coal industry, then the oil industry, and the people of this Country. The dictates of the global warming congress, cap and trade will bankrupt us all.
I agree with most of what WWS said and cannot understand why so many conservatives are criticizing this move except that they criticize everything Obama does because they want him to fail at all costs.
We cannot keep pouring billions of dollars into these companies (auto, fianance, etc.) with no strings attached simply because “they are too big and important to fail.” If one of these huge companies is eventually going to fail no matter how much the government tries to prop them up, let’s cut the losses now and let things run their natural course.
If we can salvage the company and avoid the ripple effects on the economy, however, why wouldn’t we want to attach strings to the billions of dollars we have been giving them? If the CEO drove the company into the ground (no pun intended), why wouldn’t we want to oust a loser like Wagoner before handing over billions of dollars to someone who is well practiced in losing billions of dollars? Why wouldn’t we want to ensure that the executives were not using the bailout money to pay out lavish bonus as a reward for all of their mistakes that precipitated the decline of their companies? Why wouldn’t we want the company to come up with a realistic long-term plan for restructuring to fix the problems that led them to this crises?
My only major criticims of Obama with this GM and Chrysler plan is why the hell haven’t we taken the same tough tactics with the financial industry? The fact that Obama has chosen to be hard-nosed with the American automobile companies should make all conservatives happy since they want nothing more than the death of the UAW. So what is the beef?
As AJ points out, the GOP and many conservatives have become so reactionary and nonsensical it is pathetic. Over reacting and criticising EVERYTHING, without offer any realisitic alternative, is not the way to earn back the trust of the American people. Stop focusing on how to undermine Obama and the Democrats and start focusing on what you think needs to be done. Even though I’m more left on the ideological/political spectrum than most people on the post, I believe strongly in the need for an effective minority party to keep the majority in check. I trust Obama, but recognize he is imperfect and needs to be held accountable when he screws up. While I trust the Democrats in Congress more than the loony GOP when they held power, I still don’t trust the Democrats further than I can throw them.
So get over the fact that you lost in 2006 and 2008 because you screwed everything up (it is not that Americans are stupid or were tricked into voting for Obama and the Democrats), start acting like adults and put your country before your ideology and political affiliation.
Kathie,
Come on. I don’t agree with you on much, but I at least recognize that you are intelligent and informed based on your comments on this blog. Do you really believe that the auto industries demise are a result of cap and trade? They have been under financial duress for well over a decade, so it seems a little strange that you would blame it all on recent legislation. Don’t you think it might have a little to do with poor products that couldn’t compete with foreign competitiors, bad longterm strategic decisions, overly burdensome union contracts, etc.?
This is a perfect example of what I was ranting about in my prior comment. You may have a legitimate beef about global warming and the cap and trade, but it has nothing to do with the issue at hand. So give the talking points a rest and actually discuss the relevant issues.
Conman…..I was talking about congresses push, in my opinion faster then the auto industry could financially adapt and consumers wanted, toward milage standards, emission standards, etc. as a contributing demise of the auto industry. Next comes the demise of the coal and oil industry through “cap and trade”, pushed by congress. Who is asking how long will it take to reevent our way of living, what would be the proper process to go from here to there so as not to bankrupt us in the process? For God sake we have a czar for everything. How about trying to put a time line on converting the United States from an oil and coal economy to a green economy, and work at it in a mythological way. One point that might be considered (a stastic) is that for every one green job that is created, two other jobs are lost. Not a very good statistic for an economy that is in the worst down turn in 39 years, so Obama says.
WWS:
I am not defending Obama in any way, but I live in the country, I know a lot of people who buy all sorts of equipment and Fiat is a huge company that owns all sorts of manufacturing plants all over the world and has been in the business of making machinery for many many years. They even own a huge interest in Caterpillar.
Kathie,
Again, you may have a legitimate argument about the wisdom of mileage and emission standards, but claiming that this is the reason (or even the primary reason) for the bankruptcy of the auto industry makes no sense. Foreign auto car companies were able to adapt quite well to these standards. Consumers have been gravitating toward more fuel effecient cars for well over a decade due to gas prices and US auto companies started losing market shares well before these standards went into effect. It also discounts the problems associates with lack of quality products, union contracts, inability to adapt to a fast changing world.
The problem I have with these types of arguments is the attempt to over simplify every problem into neat little partisan boxes. Every complicated problem is caused by one simple thing that conveniently is the Democrats making. Like when I hear conservatives say the whole problem with our economic meltdown is the legisaltion involving the Frannie Mae and Freddie Mac loans. While I agree that these loans certainly contributed to the problem, it is ludicrous to claim that is the reason (or even theprimary reason) if you actually understand the problem. It does not explain the problem with the $60 trillion credit default swap market, the fact that private lenders who weren’t even subject to this legislation got caught up in the bubble, the legislation that allowed for the securitization of mortgages so the industry could hide all the bad loans, the legislation that allowed for these huge multi-purpose financial companies that were too big to fail and were permitted to take these enormous risks. But we have the GOP and conservatives pundits out there making this ridiculous argument, and their constituents buying it at face value and repeating it like parrots, because they are more interested in blaming the problem on Obama and the Democrats than fixing the problem. Fooling people into believing these silly, simpleton arguments makes it harder for us to do what needs to be done.
I recognize it happens on the other side of the aisle. But our country is in a crises right now and like it or not, Obama is the one who has to get us out of it. I guess I naively thought that the GOP and conservatives would view the current circumstances as a time to move beyond partisanship at least until we get ourselves out of it. That doesn’t mean agreeing to everything he says and going along for the ride. But it should mean acting more responsibly and not just being a parrot for the GOP and conservatives who care more about retaining power than fixing our country.
By the way, I’m not saying you act this way all the time. You appear to be more balanced and thoughful in your views than most on this blog. But I’m using this as an example to vent about a general frustration I have with the right.
kathie:
I know a lot of coal miners here in Indiana who are scared to death of what Obama is going to do to their livelihoods.
when it comes to auto companies, one of the reasons they have problems in this country is that there are 90 thousand UAW workers but the companies are supporting a million people. It does not take a lot to understand how that works.
As for the foreign companies, well not only do they pay less but a lot of them got huge tax breaks to come here and free land and help with infrastructure.
Conman, you are right, there are many causes that contribute to where we are today. The car industry is more complex then I stated, I should have added unions in the mix as well, and the other contributers you mentioned. I just get teed off when the President does exactly what I did. Names a few of the contributers, like Wall Street greed, got us into this mess. The government will get us out…..well the government had oversight of Frannie and Freddie and tax payers money backing as well….how did they do? Government does a lousy job running anything, and it wants to take on the private sector? Too bad they didn’t do better before Fannie and Freddie imploded. Or too bad they didn’t do better before they thought they could get every tom, dick and harry into a home using our banking system to socially engineer it. Many of the entities that got us into this mess the government had oversight……..then to get us out they go to the private greedy, mean, money hungry guys to help. If we are really in this together and we all must feel the pain, the President is a lousy leader.
So far Fiat has no plans to actually invest any of it’s own money into Chrysler, they simply want to provide “technological support” in exchange for 35% of Chrysler.
There’s simply no way that plan works in the real world. If you’re going to liquidate Chrysler, it would be better to let GM end up with any successful parts (such as the Jeep division) rather than giving it away to the Italians for nothing.