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Barney Frank is not quite getting it - as he tries to explain his position on the auto bailout, he is actually undermining efforts to prevent the total eradication of the US run Domestic auto Industry.

Both sides are making legitimate points. It is also clear that Obama has sent out a clear message as what needs to be done in the short term. However opponents to a bail out make good points and Barner Frank's response is not satisfactory.

Mr Frank correctly points out that Wall Street has received all the benefits and mainstreet none. Clearly this lack of balance will be rectified - especially by the expected deficit spending package that Obama is undoubtedly working on.

But Mr Frank is being disengenuous by using AIG salaries as a benchmark. What salaries is he talking about. AIG is a holding Company. AIG's expense ratio was always the lowest in the Industry and AIG staff got paid less and were often motivated by AIG stock. AIG owns atleast 100 highly successful Insurance Companies who themselves must compete with thousands of other Insurance Companies. AIG employees are not unionised.

So every time Mr Franks goes down this road he simply confuses the real issues and his subsequent comments always fall way short. The issue is that the auto Companies who have been awful for decades,require massive restucturing. Most AIG Insurance Companies do not require restructuring - since they have always been profitable and remain so). This means auto labor costs brought in line with other US auto factories, massive white collar cost reductions and much of management fired. Like Dingle - every one involved in undermining gas efficiency standards must go.

Now this can not happen voluntarily. At the very least bankrupcy must be threatened and failing that, a quasi Government takeover that takes the sting out of bankrupcy.

It is great to hear Barney Frank say that he will not change the terms on the $25 billion linked to greener Cars - I agree. He can also say that it is time to help mainstreet -(this is going to happen regardless) but he must stop over reacting to any mistakes that may have been made (with TARP) and he must start demanding concessions from the unions, demanding real pain amongst the management, and demand a plan with some job losses (in factories that make stupid cars) offset by some job gains as they start building better Cars (Ford and perhaps GM have far better Cars in Europe - start building them here)

We all understand that to survive (and invetibly in a smaller form)the the US auto industry must reinvent itself. The longer it takes - the more money down the drain.

Barney Frank, by providing incorrect analogies undermines the more progressive solution and enhances the plausible and sincere comments made by Shelby and his backers. In debates between the two - this should be quite an easy argument to win (and as explained so succincly by Obama)- but Barney's confusion means that he is losing the argument.

On the other hand - perhaps it is a good thing that for the moment he is losing the argument - because his approach does not yet have sufficient merit.

Originally posted to dbeall on Wed Nov 19, 2008 at 09:44 PM PST.

Poll

How best to deal with the US Auto Industry

41%36 votes
19%17 votes
10%9 votes
17%15 votes
11%10 votes

| 87 votes | Vote | Results

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Comment Preferences

  •  The auto execs shot themselves in (11+ / 0-)

    their expensively-shod feet today by flying in in three separate corporate jets.  That's why there is not deal right now.  They just pissed people off and made it really, really, really clear, that they just don't get it.  And until they do, no soup for them.  Personally, I think these senior guys all need to go.

    "In the unlikely story that is America, there has never been anything false, about hope."

    by DrJeremy on Wed Nov 19, 2008 at 09:51:47 PM PST

    •   Any executive of that big a co. flys private for (7+ / 0-)

      security and because their time is better spent working than standing in line for 3 hrs to take their shoes off and smile for the Guards trashing their laptop. The plane is ploy, a very Rovian one at that. Nothing but a distraction.

      President Theodore Roosevelt,"No man can take part in the torture of a human being without having his own moral nature permanently lowered."

      by SmileySam on Wed Nov 19, 2008 at 09:59:18 PM PST

      [ Parent ]

      •  it may be but they should have known better. (6+ / 0-)

        For today, for this appearance, it was arrogant and stupid.  

      •  see, this is wrong (1+ / 0-)
        Recommended by:
        kalmoth

        for pr sake their time would have been better spent in the line for 3 hours. plus, with a clear/vip/first-class/whatever/ it would be more like 10 minutes.

      •  bullshit... (5+ / 0-)

        their time is not more important than anyone else's. A large university president or a director of a national laboratory has a similar (or greater) scope of responsibilities, but doesn't fly a private jet, not to mention is paid a small fraction of what these blighters get.

        Nationalize Detroit, sack the execs. No compensation of any kind for the upper management. Retool for green cars, when the Big Three become profitable again, sell them, but leave some governmental oversight.  

        •  If the university presdient had a private jet... (2+ / 0-)
          Recommended by:
          humphrey, SmileySam

          ...he'd be flying it.

          All business execs that have jets fly them... to use that as a wedge issue by democrats no less was very rovian... and it may have cost us Ohio in 2012 if the GOP can play it right... Democrats derailed aid to the auto industry today, and if we get the blame for it, Michigan, Ohio, Wisconsin, and PA will go red sooner than you think.

          Incredible stupidity and shortsightedness on those smartass democratic congressmen today....

          It profits a PUMA nothing to give their soul for the whole world... but for McCain? --Sir Thomas More (if he were here now)

          by LordMike on Wed Nov 19, 2008 at 10:33:00 PM PST

          [ Parent ]

          •  don't give our prez any ideas please :) (3+ / 0-)
            Recommended by:
            LordMike, debedb, Virginia mom

            If the university presdient had a private jet...

            ...he'd be flying it.

            The BIG part of the problem we are facing right now is that we are in the new Gilded Age, with the filthy stinking rich again drowning in excess while the workers in their factories are fearful of tomorrow. This disparity is unhealthy.

            What also stinks is that the jet-flying anti-innovation fucks have enough stashed away for a dozen lifetimes even if the factories shut down tomorrow - and the workers will be BUGGERED.

            Something DEFINITELY must be done to help the workers and engineers - they are the best-trained and most-productive workforce of this kind in the world. The execs, on the other hand, must be SUED to take back every million that was paid to them.

          •  now you see (1+ / 0-)
            Recommended by:
            kalmoth

            this is sounding like blackmail.

            and the godfathers are coming in private jets instead of limos.

        •  hate to say it (0+ / 0-)

          but "nationalizing Detroit" is not one of the options.

          If Chrysler does not have $ before the end of the month it means Chapter 7 for them.  Because these firms share so many suppliers about 20-30% of them would follow Chrysler into Chapter 7 which will in turn send GM after them.

          Chapter 11 in no option simply because of the way these businesses are structured.  For those of you that think it is let me ask a couple of questions.

          Who will provide the loans for reorganization when their bonds are currently trading at 50%+?
          How many of the 3,500+- parts suppliers will be able to absorb getting 15-20 cents on the dollar for their receivables and remain in business?

          Anyone?

          Thought so.

  •  Deomocrats are framing this entirely wrong. (5+ / 0-)

    They need to frame this in terms of costs if they do the bailout and costs if they don't.  I would submit two bills, one with the bailout and one with the unemployment costs, healthcare cost, pension costs, cost to the housing market if more homes go into foreclosure..anything else they can think of ...and then give the Senate their choice because it really is the choice they are making.

    •  You are assuming all employees would be (0+ / 0-)

      unemployed.  In reality, many of the departments and subs would be bought, employees and all.  The pieces of the company that were working, would be bought.  And Americans would still have a demand for cars, so someone would have to fill that.  I'm not saying that's the best solution, just that it's not an all or nothing situation.

      "In the unlikely story that is America, there has never been anything false, about hope."

      by DrJeremy on Wed Nov 19, 2008 at 09:56:11 PM PST

      [ Parent ]

      •  Really? .. (3+ / 0-)
        Recommended by:
        ganymeade, SmileySam, fl1972

        all that would be bought is the technology and innovations(like the Volt)

        John McCain: Bush right to veto kids health insurance expansion

        by Calvin Jones and the 13th Apostle on Wed Nov 19, 2008 at 09:57:40 PM PST

        [ Parent ]

        •  That's not the way it usually happens. (0+ / 0-)

          But no, I"m not saying that's the best idea, just that a blanket assumption that everyone who currently works for one of those companies would be unemployed is probably not accurate.  Demand for cars would remain.  Someone would have to build those cars.

          "In the unlikely story that is America, there has never been anything false, about hope."

          by DrJeremy on Wed Nov 19, 2008 at 10:32:02 PM PST

          [ Parent ]

          •  Yeah ... (0+ / 0-)

            but Krugman estimated 3 million people would end up out of work(suppliers .. the local diner/coffee shop where people went after work.. you name it)... how many of those 3 million will get new jobs? ... and of those that get them .. how many will get paid even half of what they were getting paid before?

            John McCain: Bush right to veto kids health insurance expansion

            by Calvin Jones and the 13th Apostle on Thu Nov 20, 2008 at 08:05:01 AM PST

            [ Parent ]

      •  Bought by Who? (3+ / 0-)
        Recommended by:
        LordMike, YellerDog, fl1972

        Foreign auto makers are having problems as well.  All car sales are down because of the credit crunch.  Toyota has cash reserves but they are starting to be impacted by their commitments to their home grown workforce.  They are no white knights here.  

        •  not to mention the thousands of cars (3+ / 0-)
          Recommended by:
          LordMike, ganymeade, fl1972

          just sitting at the Ports with no where to go, and no dealer to peddle them. Many dealerships carry both foreign and domestic. Problem is one make can't keep the doors open.

          President Theodore Roosevelt,"No man can take part in the torture of a human being without having his own moral nature permanently lowered."

          by SmileySam on Wed Nov 19, 2008 at 10:15:07 PM PST

          [ Parent ]

        •  Exactly the point. (0+ / 0-)

          Honda and Nissan rolled out spiffy new hybrids today at the LA Auto Show.  They are licking their chops and in no way slowing down.  They will pick the low hanging fruit, the parts companies and the like that they can retool to make Honda, Toyota, Nissan parts and shut down the rest.  Eventually you'll buy your Chevys and Fords from the same places we get everything else, foreign countries. Some may continue to be made here but guess where the profits go.

          Yes the US companies have screwed the pooch.  The dumb asses should have at least shared a plane.  However a big part of the mess can be blamed on health care and legacy costs.  I've never understood why corporations should have not fought for government health care for years.  After they fire the dumb asses, the government should take over the company health care benefits and retirement benefits first thing.  That would bring the cost in line with Toyota and Honda of America in one swoop.  Then they could get on with re-tooling to make cars to compete with the rest of the world.

          I agree by the way that the planes are a side show but given the reaming out that AIG has gotten over corporate perks they should have seen it coming.  Shultz said today that the GM plane alone cost around $20,000 an hour to operate.  Let's say 6 hours flying time.  Isn't $120,000 just about the most gold plated welfare Cadillac ever seen.  Then you bring the other two in for say $100K each.  $320 large would be mightly large to me.  

          These guys make millions of dollars a year which means, to them, their crap don't stink I guess.  It was bone headed thing to do and they should be fired for being boneheaded if nothing else.  In fact they make have sunk the entire auto industry because of it.        

          "Vote Your Hopes Not Your Fears."

          by YellerDog on Wed Nov 19, 2008 at 10:29:54 PM PST

          [ Parent ]

      •  That's highly conjectural... (2+ / 0-)
        Recommended by:
        LordMike, fl1972

        The example being Magna Power Train, which pought new process Gear, a leading all around transmission maker for all three companies, plus the Jap scrap companies in the US.

        Magna Is a Canadian corporation...New process has been hit with threats, job transfers to Canada, and serious wage cuts and still the greedy bastards want more, and send more jobs to Canada.

        Magna did not buy the company to help America, but to fatten Canada.

        It is wrong, and these broad claims of "buying you up" have a way of turning into complete bullshit.

        America first here.

        The auto industry we save in America today will be the industrial base we build on tomorrow.

        Today, 11/19/08, 4201 Americans, and untold Iraqis are dead, tens of thousands more maimed. Bush lied; President elect Obama, it is your war now.

        by boilerman10 on Wed Nov 19, 2008 at 10:03:06 PM PST

        [ Parent ]

        •  Only if it can survive on its own. (0+ / 0-)

          I think it can, but we need to give some tough love to these gas-guzzling fools who run the companies.

          "In the unlikely story that is America, there has never been anything false, about hope."

          by DrJeremy on Wed Nov 19, 2008 at 10:35:58 PM PST

          [ Parent ]

          •  Gas guzzling fools? (1+ / 0-)
            Recommended by:
            DrJeremy

            You mean the public that bought Tahoes and Explorers right up to the moment that 4.00 dollar gas hit and then the house went into foreclosure?

            Today, 11/19/08, 4201 Americans, and untold Iraqis are dead, tens of thousands more maimed. Bush lied; President elect Obama, it is your war now.

            by boilerman10 on Wed Nov 19, 2008 at 10:44:58 PM PST

            [ Parent ]

            •  Them too, but also the ones who kept making the (0+ / 0-)

              Tahoes and Explorers, and who spent fortunes lobbying Congress against improved fuel efficiency standards.  Oh, and the ones whose companies are now in the crapper because people are no longer buying their Tahoes and Explorers.  So much for their business plan, eh?

              But yeah, when I see people driving those mega cars, I do wonder WTF they are thinking.

              "In the unlikely story that is America, there has never been anything false, about hope."

              by DrJeremy on Wed Nov 19, 2008 at 10:56:02 PM PST

              [ Parent ]

              •  Oh, you mean the millions of workers who went to (2+ / 0-)
                Recommended by:
                Big Tex, chrome327

                work and built all those F-150's and Tahoes, and siverados and Dodge Rams?

                Yes, let's punish them by taking away their jobs, force thme to lose their homes, and livlihoods!

                Yes, how incredibly helpful this will be to an economy in a downward spiral when millions lose their health insurance, their retirements and their pensions because we didn't want to think through the full fallout of haviong GM, Ford, and Chrysler fail!

                GEE!  The triumph of Republicanism!  The economy so bad that Obama will not be able to fix anything!  I see Pubbies coming in 2012!  Exploit the failures!!!

                Today, 11/19/08, 4201 Americans, and untold Iraqis are dead, tens of thousands more maimed. Bush lied; President elect Obama, it is your war now.

                by boilerman10 on Wed Nov 19, 2008 at 11:04:51 PM PST

                [ Parent ]

                •  No. (0+ / 0-)

                  Oh shit, did the workers on the assembly lines control lobbyist money, corporate policy and business plans?  Who knew?

                  Or you just felt like throwing a fit and thought that attaching it to my comment would be as good as anywhere else.

                  "In the unlikely story that is America, there has never been anything false, about hope."

                  by DrJeremy on Wed Nov 19, 2008 at 11:15:15 PM PST

                  [ Parent ]

                  •  Just think through the consequenses. (0+ / 0-)

                    Allowing something so big as GM to go bankrupt will result in a behemoth that will be impossible to fund, and impossible to rebuild.

                    Give them short term stimulus and then long term goals.

                    Today, 11/19/08, 4201 Americans, and untold Iraqis are dead, tens of thousands more maimed. Bush lied; President elect Obama, it is your war now.

                    by boilerman10 on Wed Nov 19, 2008 at 11:19:08 PM PST

                    [ Parent ]

                    •  Yes. Got that. Thanks ever so much. (2+ / 0-)
                      Recommended by:
                      Meteor Blades, boilerman10

                      What does that have to do with anything I said?

                      Seriously, I think there are several posts on this diary, and a few others, that you might want to be responding to instead of mine.  All I'm saying is toss the senior idiots and try to work out what we can do to protect everyone else in a rational way.

                      "In the unlikely story that is America, there has never been anything false, about hope."

                      by DrJeremy on Wed Nov 19, 2008 at 11:27:37 PM PST

                      [ Parent ]

                      •  That I agree with, perhaps I misread the tone of (1+ / 0-)
                        Recommended by:
                        DrJeremy

                        the argument, I can do that.

                        However, the Ford man is recent and not part of the Bill Ford fiasco beyond being an underling.

                        but the tin ear, tone deafness of using the corporate jets was simply stupid...the weren't coming to bow to bush but to ask for help.

                        Wrong move.

                        Today, 11/19/08, 4201 Americans, and untold Iraqis are dead, tens of thousands more maimed. Bush lied; President elect Obama, it is your war now.

                        by boilerman10 on Wed Nov 19, 2008 at 11:30:28 PM PST

                        [ Parent ]

    •  I agree (0+ / 0-)

      I agree - but the costs of the big three must also be reduced.

    •  The CEOs tried that today but (3+ / 0-)
      Recommended by:
      LordMike, chrome327, fl1972

      no one could hear them because of their preset ideas of the Auto Industry. If they had listened to what the CEOs and the UAW actually said they would of heard all that.

      The way the Press and the Right throw around that 75 dollar a hour "wage", which is really a total cost including taxes, pension, healthcare, training, employee discounts. The worker makes no where nears that but the public couldn't know that from the reporting. The Right uss it to inflate the drama and as class warfare between auto workers and the other blue collar workers who make much less. Divide, divide, divide....

      I'm confused at the hatred it takes to want to send that many people to the unemployment lines and food banks, and even cost them their highly mortgaged homes adding to even lower home prices and competing the circle. Millions will see their pensions either cut or gone all together. Their Health Insurance that was promised for life in exchange for lower wages 30 yrs ago, gone. Why is a contract only means something when it benefits the Right or the rich ? And these people want to run on morals ? Please.

      President Theodore Roosevelt,"No man can take part in the torture of a human being without having his own moral nature permanently lowered."

      by SmileySam on Wed Nov 19, 2008 at 10:12:15 PM PST

      [ Parent ]

      •  All Americans need to look in the mirror. (5+ / 0-)

        The car companies could not have sustained this long if they did not build cars people want.  This problem was created by a lack of courage on the part of our government over the last thirty years.  If we had done what the Europeans did which is increase the cost of gasoline and increase cafe standards, we would not be in this place right now.  We all share in this.

        •  Absolutely (0+ / 0-)

          You have hit the nail on the head - I just did not want to cause offense.

        •  That's a long term problem... (1+ / 0-)
          Recommended by:
          LordMike

          Right now, the problem is that banks aren't lending money, and even if they are, people are scared to sign the papers.  People aren't buying Fords or Chevys, but they also aren't buying Toyotas, Kias, or Hondas.  

          The US auto makers need to gear up to make the cars that people want to drive in 10 years.  But the immediate question is which auto manufacturers -- foreign or domestic -- can survive for 3-6 months (or possibly longer) with near-zero sales.  It's not just a matter of people choosing to buy one brand versus another.  

          •  The long term solution is (1+ / 0-)
            Recommended by:
            kalmoth

            introducing something like a guaranteed market for super efficient cars.  

            •  I couldn't agree more. If it was up to me (1+ / 0-)
              Recommended by:
              ganymeade

              I would give Detroit three years to re-tool and then  give everyone a one time full value tax deduction to convert to either a hybrid and electric car. We could convert at least 50% of our cars to new technology in less than 5 years, reduce our carbon footprint, reduce our dependence on foreign oil and rapidly move to a green economy.  I would take the same approach to this that FDR did to gearing this country up for WWII.  We were fully in full scale war prouction in less than 2 years...we need to be in full scale green conversion before the end of 2011.  

              •  cap exec salaries until solvent and suspend work (0+ / 0-)

                force with pay until retooling happens then restimulate the market as you stated.  Also tax foreign makers federally to overcome the advantage of working in low wage non union states and remove tax incentives to shift overseas--make the govt a stakeholder until companies are solvent and reduce or eliminate large vehicles for non commercial use.

                Fool me once shame on you; fool me twice won't get fooled again. George Bush

                by ganymeade on Wed Nov 19, 2008 at 10:58:34 PM PST

                [ Parent ]

              •  This is not far from what we proposed ... (1+ / 0-)
                Recommended by:
                Big Tex

                ...in Energize America 2020, a package of 20 pieces of legislation that we started putting together in 2005. Here is relevant piece from Draft Five of EA2020:

                The Passenger Vehicle Fuel Efficiency Act will provide financial incentives to individuals who purchase increasingly fuel efficient cars - but does not mandate higher Corporate Average Fuel Efficiency, or CAFÉ, standards.  Instead, Energize America calls for fuel efficiency measurement standards to be defined simply and applied consistently across the industry, with rapid increases in average fuel efficiency coming from market incentives and not from federal mandates.  These market incentives are referred to as `feebates' , in that rebates are offered for higher performing vehicles while fees are assessed on lower performing vehicles within a given class.

                The Passenger Vehicle Fuel Efficiency Act will provide Americans who buy a new car, SUV or light truck with a $200 rebate for every `mpg equivalent' the vehicle comes in above the average for new cars, adjusted annually. The `MPG equivalent' for each vehicle will be calculated annually using a single, consistent approach that takes into account petroleum replacement by electricity, hydrogen or other fuel technology.  For example, a 2006 Ford Escape hybrid, which has a 33mpg rating, would qualify for a rebate of $2,200 ($200 x 11mpg, based on the current 22mpg average for light vehicles in America).  At the same time, a fee of $150 per mile per gallon equivalent would be applied against vehicles falling below the fleet average. Thus, the Hummer H2 - with a reported 9 mpg - would have a $1,950 fee added to its price in 2006.  This feebate program will be capped at a maximum of $6,000 per vehicle and will apply to all vehicles and all fuel technologies.    The Passenger Vehicle Fuel Efficiency Act will also establish a structured low interest loan program to foster fuel efficient car ownership among Americans earning less than the median income as determined by Congressional District.

                Benefits
                The Passenger Vehicle Fuel Efficiency Act will increase vehicle fleet fuel efficiency at least 50% over the life of the program -- from today's 22mpg to 33mpg or more in 2020.  This act will reduce America's private transport-related oil consumption by 33%, from 9 million barrels per day to less than 6 million barrels per day by 2020.  In total, this act will save Americans over $30 billion per year on average (at current prices), or $500 billion in energy costs through 2020.  In addition, this act will cut vehicle-related carbon emissions by nearly 75%, or 50 million tons per year by 2020, worth nearly $1 billion per year in carbon credits at current market prices.

                Investment
                The Passenger Vehicle Fuel Efficiency Act will cost an estimated $12B per year or roughly 40 percent of the savings that consumers will see through reduced fuel use.

                We won. But we're not done. -- karateexplosions

                by Meteor Blades on Thu Nov 20, 2008 at 12:48:58 AM PST

                [ Parent ]

            •  Make new cars with a fuel efficiency... (0+ / 0-)

              above 50 mpg a complete tax writeoff?

  •  How best to deal with the US Auto Industry? (1+ / 0-)
    Recommended by:
    kalmoth

    Sell the US-based industry to China. I'm quite serious and so are the Chinese.

    (discussions have commenced...)

  •  Sell to China - (0+ / 0-)

    Well we already tried  - The Germans bought Chrysler
    it was a total disaster.

    The British tried selling British Leyland to the Germans - it achieved nothing.

    The US Auto industry has been in a death spiral - made worse by the US consumers inability to understand energy policy.

    The only hope is a total re invention on the back of US consumers demanding a more appropriate product.

    Finally we must have a hefty carbon tax- all revenue raised either going to tax cuts or spending on infra structure. Thus a carbon tax would not represent an increase in over all taxes.

    Plus I just had a thought on "plug ins". Gas stations could get in the business of selling 'powered up' batteries - for cars designed to easily remove and replace batteries.

  •  AIG's junkets = the Big 3's Private Jets (3+ / 0-)
    Recommended by:
    LordMike, kalmoth, shann

    Perception has little to do with reality on one level.

    But the public believes that AIG's junkets - especially those which came after they got bailout money - demonstrated their waste - and their lack of sincerity.

    There's a similar perception developing over the private jets used by the Big 3's CEOs to go from Detroit to DC.

    So in terms of politics, Barney Frank is making the right comparison. And it is the politics that is stopping the bailout. Specifically, it is the political tone-deafness of the Big 3 CEOs which is turning the country off right now.

    I think Barney Frank understands - to get the bailout moving, the Big 3 CEO's have to get beyond junkets, they have to get beyond living the high life, especially if they want to get government aid.

    •  It's not just tone-deafness... (2+ / 0-)
      Recommended by:
      Meteor Blades, shann

      it's denial of reality, hostility to innovation, and complete and utter disregard for the environment, the workers, the customers, and the future.

    •  I thought we were better than that. (0+ / 0-)

      One of the great things about Obama is that Generally he tries to treat people as adults - al though he had to talk some nonsense to get elected.

      I am bored with politicians talking nonsense - what we need is the truth - Americans can handle it.

      The truth is that the AIG "Junkets" were badly misrepresented - however if the the three auto execs came in three separate private jets by themsleves that that is indeed disgusting.

      But with out all the facts - I will with hold judgement.

      The most important thing America needs now is a President and Congress that tell the truth - this is the biggest single lesson of the last eight years.

    •  Wagoner said today... (2+ / 0-)
      Recommended by:
      kalmoth, dbeall

      ...that the problems of GM don't seem to resonate outside the midwest...  I could have told him that!  Just look at all the "let 3 million jobs die" diaries out here....

      As a lifelong resident of the rust belt, I don't know what it takes to get people to understand the magnitude of this thing!

      It profits a PUMA nothing to give their soul for the whole world... but for McCain? --Sir Thomas More (if he were here now)

      by LordMike on Wed Nov 19, 2008 at 10:29:54 PM PST

      [ Parent ]

      •  I empathise (2+ / 0-)
        Recommended by:
        LordMike, kalmoth

        I agree - and the point of this diary was to try and get people to focus on how to save a large % of the three million jobs. I feel that Barney Frank by making a some vaccuous points is undermining that objective.

        Although people are making some intertesting points I apparently have failed to successfully make my case. So Barney Frank will stumble on - but as stated, this may not be a bad thing - because his demands need to be strengthened and he needs to broaden his focus. Finally he must stop treating voters as idiots.

  •  I wouldn't hand the auto companies a dime (2+ / 0-)
    Recommended by:
    kalmoth, dbeall

    until they restructure.  It is absolutely crazy the amount of money they pay to thier workers in hourly pay, saleries, and benefits.  They need to go bankrubt at this point is my guess.  They need to eliminate their pension fund and eliminate any paid health care for workers.  Furthermore, they need to rid themselves of the horrid program called the "Job Bank".  Lastly, they need to bring their average hourly pay with benefits down to whatever their lowest competitor has today.  They also need to fire most of the top management since they didn't see this problem awhile ago.

    Once that easy stuff is done, they need to retool and build greener cars people want.

    Should we bail them out?  Only if they do at a minimum what I just spelled out.

    •  Yes (0+ / 0-)

      I agree - I hope you voted for the last option - since I am depressed by how many of these votes are going.

    •  I can't agree (0+ / 0-)

      Way, way too draconian.

      Procrastination: Hard work often pays off after time, but laziness always pays off now.

      by Linnaeus on Wed Nov 19, 2008 at 11:08:45 PM PST

      [ Parent ]

      •  Way too Draconian???? (0+ / 0-)

        The last option is in fact less draconian than two others - therefore it is in fact the middle ground of the options offered.

        I am not sure you realise what the implications of acual bankrupcy are. The auto Industry is not like the airlines.

        •  I know what they are (0+ / 0-)

          There won't be any Chapter 11 for the auto companies, since there's virtually no credit available for anyone who wants to restructure them.  That leaves Chapter 7, and all we'll see there is a massive sell-off of assets.

          I don't what eliminating health care insurance for workers (which even the Big Three's competitors do not do) does unless there's some other program in the offing.  They'll still need health care - as do we all.  Or simply cutting pensions.  What will people who depend on them do?  Do we care?

          Procrastination: Hard work often pays off after time, but laziness always pays off now.

          by Linnaeus on Wed Nov 19, 2008 at 11:26:57 PM PST

          [ Parent ]

          •  Fine But - what's the point. (0+ / 0-)

            Fine but that is not what I was sugeesting, my preffrred otion was to avoid bankrupcy so I still don't understand your point - or more to the point I don't think you understood my point  - so at what point do we see that our respective points are not pointless.

    •  Please don't blame the workers (1+ / 0-)
      Recommended by:
      Meteor Blades

      for the fact that their companies were continuing to push cars the size and weight of battleships while the price of gas was tipping past the $4 a gallon mark.  The idea that the Big 3's problems are the fault of worker pay and benefits is a Republican meme, and if I'm not mistaken it's already been debunked elsewhere on DKos.

      Bail them out, in exchange for forcing them to sell more energy-efficient cars that will sell better.  Don't strip the workers at these companies of their pay, retirement, and health benefits.  That's what Republicans do, not Democrats.

      •  Exactly. And this talk about ... (1+ / 0-)
        Recommended by:
        Big Tex

        ...eliminating pension plans means, presumably, screwing retired workers. It's outrageous.

        We won. But we're not done. -- karateexplosions

        by Meteor Blades on Thu Nov 20, 2008 at 01:04:18 AM PST

        [ Parent ]

        •  Even more outrageous (1+ / 0-)
          Recommended by:
          Meteor Blades

          to hear it here, where I would have least expected it.  My dad's a retired Teamster - worked at Yellow Freight for 30+ years - and if his pension were taken away from him, he and his wife would be fucked financially.  I'm sure it would be the same for most of the thousands of retirees who used to work at these companies.  Fuck that shit.

      •  I am saying that they need (0+ / 0-)

        to take away the pensions and lifetime health benefits for workers that haven't retired yet.  Obviously you can't easily take away stuff from the retired.  Anyways, they either cut pay and benefits drastically or the market will do it for them (chapter 7).  I can understand that you like overpaid workers but the marketplace obviously doesn't.  They either make the cuts now and beg for a bailout or die.  If they make no cuts and get a bailout they will still die.

        I won't pay for an overpriced car anymore then the next guy or gal.  When you overpay your workers, you make your product to expensive.

        •  So you don't want (0+ / 0-)

          to fuck the people who have already retired, just the ones who are on the verge of retiring.  Got it.  Thanks, but no thanks.  And again, the idea that the Big 3's problems are related to worker pay and benefits is a bullshit Republican meme.  The problem with these companies is that they're selling gas-guzzlers that noone wants to buy.

          •  You and I don't have a choice (0+ / 0-)

            Neither does the government.  If they don't reduce pay and benefits drastically they will die with or without a bailout.  Pensions are a thing of the past anyways just like paid health insurance after you retire from your employer.  The Big 3 keeping those things going forward plus overpaying their employee's means they die.

            I don't want them to die because they employ alot of people and other business' count on them as well.  With that said, they need to go to the union now and work something out.  If the union doesn't work with them to cut pay and benefits, then the Big 3 goes under.  You either keep the jobs but at much lower pay or you simply lose the jobs altogether when these companies die.  I would prefer they keep their jobs.

            On top of cutting blue collared worker pay and benefits they also need to drastically cut executive pay, perks, retirement, and benefits.  Hell, they probably need to fire all the executives since they did such a horrible job.  How any CEO could possibly agree to the type of pay and benefits they give to their workers is beyond me.

            Have you heard about the "Job Bank" program?  After reading about it, I see upper management as losers.  How can they over pay employees, give them benefits for life, and even pay them not to work?

            Anyways, we are arguing about spilled milk.  They either drasically cut pay and benefits or they close the doors.  If you were a worker for GM would you rather have your pay cut in half, your benefits cut in half, and no lifelong benefits OR not have a job?  That is what we are talking about.

  •  Barney's starting to lose the thread (1+ / 0-)
    Recommended by:
    Meteor Blades

    It's been slow and subtle, so if you're not paying close attention you'd likely not notice it, but he's not the Barney that was first elected to Congress anymore.  And sadly, I don't mean that in a good way, either.

    This sig line is in foreclosure. For details on acquiring a credit default swap on this sig line, contact H. Paulson, Dept of the Treasury, c/o Goldman, Sachs

    by ActivistGuy on Wed Nov 19, 2008 at 10:46:41 PM PST

  •  Barney said the one sensible thing all day.... (5+ / 0-)

    He said that bankruptcy sounds good for everybody but those who have to go through it.

    Here's the executive position as put out by the GM guy.

    1.  Management is great, made no mistakes, the products are superior.
    1. You can't let us fail because everybody would be fucked.
    1. WHY WON'T BARNEY PANIC?!?!?!?!?!  It worked for Paulson.
    1. It the Unions fault.

    What Frank is saying is that Bankruptcy is not a solution.  What Bankruptcy is, is a union breaking scheme that's going to fuck everyone on both sides of the food chain.  And at the end it'll just be the same old shit, except they will have gotten rid of the unions, their pensions and their healthcare.

    Now, you may believe that Unions are the root of all evil, if so then you are not paying attention.  I encourage you to start working in factories without safety provisions at age 13 working 10-14 hours a day 6 to 6-1/2 days a week the way it was before labour started to organize.

    But aside from the historical benefits of labor and the current fact that labor jobs are the most likely to pay living wages with oliving benefots and offer some chance at a real retirement...you know, the American dream and all.  

    Many economists are now realising that the current melt down is not CAUSED by credit default swpas and deregulation - those are just the instrumnets of it.  The real cause of the metl down is that too large a proportion of our wealth has been concentrated in too few hands which means that there is ever decreasing agggregate productivity in every segment of the economy excpet finanical markets.  As a result our economic values are based on paper and speculative value rather than actual production.

    By saying in essence, let's eviscerate the unions - pump up our GM shareholders on the backs of the workers.  We're saying, oh yeah, let's remove even MORE of our productive economy.  Let Base even MORE of our economy on these false growth indicators of - I can sell this sheet of paper tomorrow for more tha I paid for it today....or more appropriately, I can sell this piece of paper tomorrow for more than I borrowed to buy it yesterday plus some interest and profit.....without any underlying increase in actual value.  In fact fewer widgets...or cars.

    No.  If we are to mess with the Unions, the thing to do is not allow other states to underbid the same jobs.  To forbid non-union plants to underbid union plants ina  nvereending race to the bottom in wages and quality of product.

    If the auto industry can only be saved by breaking unions.  Let them die. They will provide little or no economic benefit without the unions providing meaningful, sustainable wages after you figure in the bailout costs.

    If you want to REALLY help the auto industry.  Go to single payer nationalised health care now. Immediately.  The big 3's balance sheets will be put in order in one fell swoop.

    No bailout without unon protection. Frank is absolutely correct.

    "you have the right to your own opinion. You do not have the right to your own facts" -Daniel Patrick Moynihan

    by SteveP on Wed Nov 19, 2008 at 11:06:11 PM PST

    •  Alot of good stuff (1+ / 0-)
      Recommended by:
      SteveP

      Going to single payer health would reduce health care costs by almost 50%. I like Insurance Companies but their aquisition costs are 35%. It's not their fault - so quit blaming them.

      The rest of the savings come about by not worrying about coverage issues and billing issues.

      The Europaeans have better health care for half the cost. Americans counter with the tax argument which is retarded since employees pay by having less salary (so that employers can pay) it can also be proven by comparing what % of GDP is spent on healthcare and by the fact that America is the only Country in the world with this stupid system.

    •  Kudos. n/t (1+ / 0-)
      Recommended by:
      SteveP

      We won. But we're not done. -- karateexplosions

      by Meteor Blades on Thu Nov 20, 2008 at 12:39:09 AM PST

      [ Parent ]

  •  Detroit efficiency? Bankruptcy can help (0+ / 0-)

    Bankruptcy will let the auto companies reorganize.  Throwing money of it will just prolong the inevitable and drag everyone down (taxpayers).  It's going to hurt either way, let's take the less-painful route.

    Government intervention hasn't helped them, either.  With years of protectionism, import restrictions, fleet requirements and regulations that raised costs for foreign producers, it shielded the Big Three from competition in vital markets but allowed their creative juices to evaporate.  And people still preferred to pay a little more for the foreign cars. They can't innovate anything.  Whatever rises from their ashes should be much better than what they've got now.  They need to go.

    •  Need a better plan (0+ / 0-)

      No one will but a Car from a bankrupt Auto Company.

      That's why I say bring them to their knees with a threatened bankrupcy and wait for some brilliant ideas to emerge. These ideas will miraculously surface.

      •  With Chapter 11 they can... (0+ / 0-)

        Chapter 11 is mostly used to  reorganize a business that, but for insolvency, is poten­tially profitable.

        Creditors fare better when a business continues as a going concern rather than being liquidated. The businesses can pay off their debts and reorganize  instead of being picked apart by creditors.

  •  Da planes, da planes... (0+ / 0-)

    It was all over when they admitted they had each flown on separate corporate jets! (It's about 45 minutes from Detroit to DC).

    They just don't get it. I'd have the government buy their stock (at a bargain), not loan those jerks money.

    I'm a Detroiter by birth, descended from two lines of auto workers, and know we must save them. But those jerks need to go.

  •  Frank's job (0+ / 0-)

    Is to protect all government $ for the banks & insurance companies.
    If any of the big three fail it would require an additional 1-1.5 trillion dollars for the financials to cover losses on bonds & LBO debt, Credit Default Swaps and to meet new margin calls for their loans.

    A big three failure is just one more way to fleece us for more trillions and they get to break the UAW as a freebie.

    All this and folks are whining about corporate jets?  How many financial firms that have received government money still use them?

    We had better wake up before we get sold further down the river by big money folks!

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