While Lansing dithers around with the state budget, this is something for them to keep in mind.
Governments and schools across Michigan are bracing for the possible loss of millions of dollars in tax revenue as General Motors Co. and Chrysler Group LLC argue that they should pay less in property taxes.
GM and Chrysler say their property taxes are inflated by more than 50 percent because local communities overestimate the value of their plants and buildings. If the automakers prevail before the Michigan Tax Tribunal, some of the hardest hit communities would be those in metro Detroit where GM and Chrysler are the biggest taxpayers. Those communities include Warren, Sterling Heights, Auburn Hills, Pontiac and Milford Township.
But the Detroit Free Press reports that the potential loss of $45 million in taxes would also affect school districts, community colleges, public transportation, libraries and the Detroit Zoo. Community leaders say they could be forced to lay off police and firefighters or cut services to seniors and lower-income families.
This loss of tax revenue would be above and beyond the $1.2 billion in cuts in the agreement between House Speaker Andy Dillon and Senate Majority Leader Mike Bishop and the proposed cuts to revenue sharing they've also proposed.
Milford Township supervisor Don Green said about the lost property taxes, "This is the worst thing that has ever happened to us budget-wise." The township could lose 11 percent of its $950,000 budget. The City of Warren would lose even more - $7.3 million a year, or 7% of its $98-million budget. The situation in Warren would be so bad that Mayor Jim Fouts said, "Since 60% of our budget is public safety, we would have no choice but to lay off police and firefighters."
Commercial real estate appraisers say the automakers have a good case because their property taxes remained steady despite a dramatic downturn in the real estate market and closures of large sections of some plants.
Officials with the Michigan Tax Tribunal said they probably wouldn't issue a decision on property values for another year, but with commercial property values continuing to decline and experts predicting that recovery will continue to be slow, it's doubtful that assessments will go anywhere but down.
So while Bishop and Dillon take the easy way out and propose cuts in revenue sharing and key programs, our cities and townships are left holding the ball, and their officials will be the ones to do the dirty work of handing out pink slips or asking citizens to approve tax increases for valued services. And the pain won't be spread around evenly either. The more financially stable or affluent areas will be better able to maintain services and quality of life for their residents than the poorer areas.
It's too bad we don't have leadership in Lansing looking out for all of us.
A journalist writing in The Atlantic argues that the relative chump change being thrown at high speed rail (AIG and Citibank got 55 times as much, roughly $460 billion vs $8 billion) could become diluted across so many states that no one "will end up with a top-of-the-line system that could provide thousands of new jobs and an envy-inducing model for America." He offers a better alternative that benefits Michigan.
Instead of scattering nickels and dimes across dozens of states, a better idea would be to increase the train fund at least tenfold so America can have at least one legitimate high-speed rail line like Spain's Madrid-to-Seville train, which runs at 186 mph (Amtrak averages only 79 nationwide). And let this man-on-the-moon project start in Detroit.
Yes, Detroit. The city that was once part of FDR's "Arsenal of Democracy," for its part in retooling auto plants to make World War II tanks and bombers, has easily a dozen empty auto plants that could be making train engines and train cars.
We also have the trained workforce. According to UAW Local 651 President Art Reyes, he has "a workforce of 900 that's been downsized from 9,000, but every one of them is computer-literate and ready for cutting-edge, green-technology stuff, whether it's wind turbines, next-generation auto batteries, or rail."
Increasing the train fund tenfold is a nice dream, but I doubt there's the political will, especially on the right. That's too bad, because - once again - we lag behind the rest of the world in progress. This is China's plan.
China, as part of their two-year stimulus plan, is poised to spend 3% of their GDP a year on public investments in renewable energy, low-carbon vehicles, high-speed rail, an advanced electric grid, efficiency improvements, and other water-treatment and pollution controls. This is about $12.6 million every hour. In the United States, the American Recovery and Reinvestment Act invests about half as much as China on comparable priorities. This represents less than half of one percent of our 2008 gross domestic product.
There is good news though. The Midwest appears to be a frontrunner in the race for $8 billion in funds because we're part of the Midwest Interstate Passenger Rail Commission, along with seven other states, and federal guidelines give an edge to states that have banded together. It's a start.
A GM spokesperson tweeted something cryptic and interesting a short time ago:
@iLobbyist actually, #Gm looking at new forms of transportation beyond cars. DM me and we can chat - Annalisa
Hmm... Are they talking about high speed rail? Obama has already proposed the idea, including tapping $8 billion in economic stimulus money for upgrading existing passenger rail lines and laying the groundwork for high-speed projects. Auto companies cranked out planes for the military during WWII, so there's no reason G.M. couldn't retool some of their idled plants and make trains.
Update: I replied to GM's tweet and received the following answer:
@souplady - check out the PUMA http://bit.ly/9UNWx, one of many adv design/R&D proposals to reinvent transportation- annalisa
What a disappointment. The PUMA is a two-seat prototype vehicle that has two wheels and is designed for urban use, and I'm not sold on the PUMA idea. It may work in heavily congested cities like New York, London or Beijing, but it won't sell in Michigan or other states where people have long commutes to get to work (next to huge semi-trucks barreling down the road at 60 mph).
We need to develop high speed rail in this country. Think bigger, GM.
Remind me never to play poker with President Obama. I have a feeling he's good.
After receiving $25 billion in taxpayer-funded TARP funds, greedy J.P. Morgan Chase decided to play hardball with the auto task force when it came time to negotiate over debt recovery before and during the Chrysler bankruptcy. According to the WSJ:
President Barack Obama's auto task force heard a blunt message early this spring from J.P. Morgan Chase & Co., the largest lender to Chrysler LLC. In any deal to remake the troubled auto maker, Chrysler would have to repay its lenders all $6.9 billion it owed.
"And not a penny less," said James B. Lee Jr., vice chairman at the bank, in a call to auto task-force boss Steven Rattner on March 29.
The next day, Mr. Obama called the banker's bluff. The president stepped before a podium to announce that Chrysler could face a disorderly bankruptcy or even liquidation. His meaning was clear: If that happened, the lenders would get nowhere near $6.9 billion.
A few hours later, Mr. Lee called Mr. Rattner back. "We need to talk," he said.
The banker's about-face was a vivid example of the government's tightening grip on a humbled financial industry. Pulling a trick from the hedge-fund playbook, the government used its leverage as the sole willing lender to Chrysler, either in bankruptcy court or out, to extract deep concessions from some of the country's biggest banks.
h/t to Epicurean Dealmaker who explains that the WSJ made it appear that almost all the lenders involved understood exactly what type of game they were playing:
Many of the lenders believed the administration wouldn't let Chrysler file for bankruptcy. "The plan was to call the government's bluff. The game was to game the government," said a manager of a distressed-debt fund.
Gaming the government is essentially the same as gaming the taxpayers. The good news according to E.D. is that the system worked exactly as it should.
The government simply did what any hedge fund driven by fiduciary duty and self interest would have done if it held the reins: it dictated the terms it wanted to see, and it told the creditors to pound sand if they didn't like it. The creditors, on the other hand, seemed to sally forth onto the field of battle without fully considering who was supplying their reinforcements (the Treasury), where they were fighting (in the forum of public opinion, as well as the arena of commerce), and the outside chance that their primary opponent might be smarter than a bag of hammers (and therefore realize and exploit its advantages). In return, they got schooled, but good.
Oh, yeah, he also had a comment for the whiners complaining about the government's involvement in economic affairs:
Deal with it. Buck up, and move on. Find a less lopsided game to play in.
Because I can guarantee you the government and 95% of the people who elected it to power don't give a rat's ass that you're going to lose money on your Chrysler bonds.
...in a blazingly short amount of time, the Administration has forged a deal that could save thousands of jobs at Chrysler--the major banks are on board, the UAW has made more significant concessions. But all that may come crashing to a halt because of a few hedge funds who are holding the entire car industry hostage because, boo-hoo, they aren't getting enough out of the deal. What a spectacle.
Spectacle? Yeah, in a Bonnie & Clyde or Godfather sort of way.
As Tasini points out, the president lived up to his pledge, the UAW accepted concessions...
On top of concessions already given in 2005, 2007 and 2008, the UAW members have agreed to accept cuts in pay and benefits.
And even the major debt holders were on board.
Led by J.P. Morgan, the banks holding 70 percent of Chrysler's debt agreed to a deal that would effectively mean they would have to write-off a health chunk of change.
Everyone sacrificed and the administration even tossed more cash on the table and it still wasn't enough for the greedy hold outs.
Three of the bank-debt holders on the bank-steering committee, Oppenheimer Funds, Perella Weinberg Partners' Xerion Capital Fund and Stairway Cap Management, told J.P. Morgan and the other large lenders on a bank call Tuesday that they wouldn't support the deal and would advise other lenders not to support it.
I'm not a financial expert, but I think that's just dumb. Tasini thinks it's dumb too.
Even if the hold-out hedge funds refuse to make a deal by midnight tonight, forcing Chrysler to file for bankruptcy, they are unlikely to do any better in the swift bankruptcy proceedings envisioned. Do the geniuses at Perella et al. think that a bankruptcy judge, looking at a deal that has the blessing of the U.S. Treasury, the banks holding 70 percent of the debt, and the the union representing tens of thousands of workers (not to mention Fiat, which is waiting in the wings to scoop up Chrysler) will dramatically alter the outlines of the deal? No.
But, here we are: American workers, the Administration and the public generally is being held hostage by a few deal makers who run the very kind of financial firms that evaporated trillions of dollars in wealth. [emphasis mine]
And they wonder why a majority of the public believes corporate America (and particularly the financial industry) needs a new moral direction.
For those of you in the Detroit metro area, you may or may not listen to the D&D show, formerly on 97.1, now on 94.7 from 6-10 AM. These two radio hosts are running a program called "Faces not numbers". The purpose of it is to show the folks in Washington DC that their decisions regarding the auto industry will impact real people, and not just those directly in the auto industry.
Suppliers, manufacturers, and even restaurants and stores where auto workers may spend money can all be impacted by their decision. I myself lost a job for a manufacturer in the auto industry, and have been unemployed since the end of November. I'm not the only one in my company who did. Check out their video for details, and please, if you or anyone you know will be impacted, participate in Faces not Numbers. It's simple, quick, and it could make a difference.
Sen. Debbie Stabenow was on the Ed Show Monday night and Rep. Gary Peters was on last night. They discussed a possible GM bankruptcy, which could jeopardize the pensions of 670,000 retires, with 335,000 seeing benefit cuts.
Both lawmakers agreed that bankruptcy should be a last resort, but Ed characterized Obama's Auto Task Force as throwing workers under the bus when it comes to their pensions. Stabenow had a different perspective:
SCHULTZ: But what about those retirees-senator, I have to ask you, what about these retirees. They didn't vote to have their benefits cut. These are your constituents in Michigan.
STABENOW: No question. If you're asking me, do I think bankruptcy is a good idea? The answer is absolutely not. I don't support bankruptcy as an option. And the reality is that taxpayers shouldn't either, because we're talking about 670,000 people with pensions with General Motors alone that would become potentially a federal responsibility. [...]
SCHULTZ: -- that if it goes to the Pension Guarantee Corporation, and people have to take a cut, I don't know how they are going to be motivated to come back and vote for the Democrats.
STABENOW: Well, first of all, people took a pay cut to get that pension, and they should not be cut in their pensions, period. People took pay cut after pay cut to keep their health care and to keep their pensions. And so there is a way to do this, even going into a bankruptcy.
Northwest Airlines, based out of Detroit substantially, went into bankruptcy, kept their pension obligations. We worked with them to help protect their pensions. They came out of bankruptcy. They kept their pension commitments. So it is possible to do that. And I am strongly urging the administration, whatever happens, to keep those pensions intact, because people have worked hard all of their lives for those.
Bloomberg reports that GM's plan is in relatively better shape than others, because it's about 87 percent-funded, but they also point out that as many as half of GM's 670,000 pension-plan participants could see their benefits trimmed if the PBGC takes over the plan. Jack Dickinson, president of an advocacy group called Over the Hill Car People says, "Nobody really knows" what would happen with GM pensions in a bankruptcy." (The DetNews has more on how bankruptcy could affect workers' pensions.)
One thing struck me in the interview above. Schultz wondered why people would be motivated to vote for Democrats if General Motors files bankruptcy. Is Ed serious? As the Free Press recently pointed out...
Moreover, the government's track record setting policy that affects the auto industry is atrocious. Car companies have been flogged for not producing enough small, efficient vehicles, but the government eschews a national gas tax that would keep demand for such vehicles high. The companies have been derided for exorbitant labor costs, but in too many instances, government trade policy doesn't help them by holding other countries to decent labor standards.
Democrats and Republicans are responsible for that track record, but Republicans have been in control of the White House for the past 8 years and in control of Congress for almost 20 years. They were the ones actively pushing their free trade, anti-tax, kill the unions, drill, baby, drill rhetoric all that time. And when the chips were down last fall and the auto industry needed help, it was Republicans who pulled the plug on the industry and voted no.
If McCain had won the election, I have no doubt GM and Chrysler would be history already and the Republicans and their US Chamber of Commerce cronies would be giving one another high-fives.
And I won't soon forget how Republicans voted on minimum wage, SCHIP, equal pay, etc. They don't even feel we should have universal health care.
A vote for any member of the GOP is a vote against the middle-class, and General Motors filing for bankruptcy won't change how I feel about them. The lawmaker who does the most for the middle-class gets my vote, and the majority of the time that's a Democrat.
An auto bankruptcy could cost one-third of the three million people employed in the industry and shave four percentage points from our GDP according to a Deutsche Bank analyst. I guess that's why Obama called it a "surgical bankruptcy" in his address on Monday. Losing that many people would be like losing a limb in order to save your life. That's the bad news.
There is some good news though, at least for GM. An article in the NY Times reports the "government may seek to ease General Motors into what it calls a "controlled" bankruptcy, somewhere between a prepackaged bankruptcy and court chaos, by persuading at least some creditors to agree to a plan that would cleave the company into two pieces."
This is how it would work:
Under a plan being worked out by the administration, G.M. would file for prearranged bankruptcy, according to these people. It would then use a sale authorized under Section 363 of the bankruptcy code to quickly sell off the desirable assets to a new company financed by the government. These good pieces might include Cadillac and Chevrolet, as well as assets the company needs to run the business.
Less desirable assets, brands like Hummer and underperforming factories, would be left in the old company. Proceeds from the sales, including stock in the new company, would be given to the old G.M., helping to settle claims.
I mentioned Section 363 bankruptcy the other day. The goal the administration seeks is to create a new, healthier, competitive G.M. by leaving behind its liabilities and less valuable assets, which is also similar to the way the government handled Lehman Brothers last year.
The administration would also have to win support from some of G.M.'s creditors, "notably the United Automobile Workers, which would be forced to pare its health care benefits and whose pension obligations would probably remain in the old company." That's bad news, but...
There will be pressure to keep plants open, to keep employment in communities high, he said, "because typically G.M. or Ford or Chrysler are very substantial contributors to the local tax receipt flow."
They're telling us something we already know all too well. Experts are also saying history offers almost no precedent for a G.M. bankruptcy simply because no other company ever matched their size and interconnectedness.
The news for Chrysler isn't as good. Obama is prepared to let Chrysler go bankrupt and be sold off piecemeal if they can't form an alliance with Fiat.
Bankruptcy is only at a possibility at this point, but it's looking likelier by the day - or at least within 30-60 days, and there's no doubt Michigan will suffer more pain if it happens. All we can do is trust Obama. He said he would direct a comprehensive effort to lift the hardest hit areas "by using the unprecedented levels of funding available in our Recovery Act and throughout our government to create new manufacturing jobs and new businesses where they are needed most - in your communities." He also said he would fight for us and help put us back on our feet. Things look bleak now, but not hopeless. With Obama helping us, we can come through this and be made whole again.
Like DJ, I'm feeling a combination of anger and fear about our auto industry's future, but I also feel a sense of resignation. How much longer can we continue this way? We're dying slowly, one excruciating job loss at a time, and it's like torture. I'm beginning to think maybe it's time to call in the triage team, or in this case the restructuring team.
Michigan native Jonathan Cohn expands on the "surgical bankruptcy" Obama mentioned yesterday. He believes the administration is serious about that possibility, and he also notes that people involved in the debate see Section 363 of the bankruptcy code as a way for the company to continue operating without the burden of their huge debts. (Fritz Henderson was quoted yesterday as saying a "strategic" bankruptcy supported with government money would be less risky than traditional Chapter 11 protection too.) Cohn provided a link to Harvard Law Professor Mark Roe that basically explains it like this...
GM files for chapter 11. The company puts together the automotive operations, and leaves behind the legacy obligations to retired workers and the bond obligations. It takes the auto operations and sells them intact. Section 363 of the Bankruptcy Code provides for these kinds of sales. This would leave behind restructuring the bond debt and the legacy claims. Whatever GM gets from the automotive sale will go to pay off the bonds and pay off the legacy claims. That part is in some ways straightforward. If it can be completed, consumers would be looking at a viable GM that has exited bankruptcy. Then the claims-the legacy claims and the like-will be resolved.
Is Section 363 what Obama has in mind? It does have some benefits. GM would continue operating without the burden of their legacy debts, or what we call pensions and lifetime health care benefits. That would help free up cash and strengthen the company, which could end up protecting jobs that would be lost if they were allowed to completely fail. But what about the thousands of retired employees? Does that mean the PBGC would assume GM's pensions and people would lose their health care? Maybe someone familiar with bankruptcy laws could fill us in and help alleviate our fears.
(CORRECTION: It's been brought to my attention that Littman did not recommend nationalizing the Big 3 as I stated below. That was the opinion of the editorial staff at dbusiness.com. Sorry for the error. Littman's free market, limited government ideology is well-known and I should have known better!
The link in the 2nd paragraph from the bottom does take you Littman's report and those are his words. I assume he still stands by his earlier statement that "we're better off if government keeps out" of the business of business. Considering the enormous value the domestic auto industry has contributed to our economy, I prefer the recommendation of dbusiness.com's editorial staff, "If all else fails, the federal government must nationalize the Big Three (as bad as that might be) before they allow a bankruptcy.")
It appears that David Littmann - senior economist with the Mackinac Center and board member of the Taxpayers Alliance - is contradicting what he said about the Big 3 a month ago. This is what he told the Oakland Press in February.
"More people would be employed if they (GM, Ford and Chrysler) went out of business because the resources could be used elsewhere, people would spend money elsewhere and save money," he said. [...]
"Without a doubt, we're better off if government keeps out" of the business of business, Littman said.
And this is what he [the editorial staff] wrote in the latest issue of dbusiness.com.
Since 1900, the U.S. auto industry has contributed more than $60 trillion (in today's dollars) to the nation's economy, single-handedly creating the American middle class and ushering in a standard of living unrivaled in the history of civilization. ...
Considering the massive contribution the auto industry has made to the national economy over the last 109 years, coupled with the national military defense issue, the loans the federal government has dispensed or may yet dole out are trivial compared to the funds it's spent on the war in Iraq ($600 billion to date) or the Wall Street bailout (up to $2 trillion).
We cannot allow the Big Three or their supplier base to go down; it's simply not an option. If all else fails, the federal government must nationalize the Big Three (as bad as that might be) before they allow a bankruptcy. The automakers deserve that respect.
I'm curious Mr. Littman. If the government nationalizes the Big Three, how is that keeping out of their business?
His full report is available here and he actually does a good job of showing how the auto industry has added value to our nation's GDP, and how the wealth created in the process has "endowed universities, art museums, engineering and medical research centers, libraries, countless community foundations, symphonies, opera houses, and other eleemosynary activities."
Littman failed to mention one thing I think is important. Just imagine how much tax revenue cities and states across our country took in because of the auto industry and related spin-offs. For that matter, just imagine how much tax revenue the industry contributed to the federal government, who in turn used it to strengthen our military, educate our children, provide for our senior citizens, etc. Without our domestic auto industry and the middle-class they helped create, we would all be worse off.
OK, I have no idea what this actually means, and it's obviously WAY too early to be too encouraged, but this is certainly a long-overdue positive bit of news:
General Motors has just announced that they will no longer need the $2 billion in government funding that they had previously requested for March. The good news comes in tangent with the announcement that GM Canada has ratified a competitive agreement with the CAW.
GM states they no longer need the US funding due to an acceleration of company wide cost reductions and "pro-active deferrals of spending previously anticipated in January and February."
I am just dying to hear reactions to President Obama's comments regarding the auto industry. I know this Michigander was hanging on every word as Obama said,
As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink. We should not, and will not, protect them from their own bad practices. But we are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win. Millions of jobs depend on it. Scores of communities depend on it. And I believe the nation that invented the automobile cannot walk away from it.
None of this will come without cost, nor will it be easy. But this is America. We don't do what's easy. We do what is necessary to move this country forward.
I was surprised at how proud and even a bit emotional I felt when I heard him say, "the nation that invented the automobile cannot walk away from it."
I think Michigan is suffering from a loss of pride, and I am hoping that the President's words can be the beginning of some hope for our state.
All the talk in Washington is about Nationalizing the Banking industry, or at least a few Banks. While just a couple weeks ago, GM and Chrysler had to jump through hoops just to get help from the Federal Government. If you are like me, something is wrong with that picture.
Let's face it, GM and Chrysler have not even asked for 10% of what the Banks have gotten, and yet Washington is willing to go out of it's way, even to the point of Government control to save the banks. I think this tells us who our Senators and Congressmen are indebted to.
GM and UAW officials are holding meetings because, under terms of the bailout approved by the Bush administration, GM must bring its own hourly wage costs in line with those of Toyota and other Japanese automakers that operate nonunion factories in the United States. Aside from the fact that I find it outrageous foreign companies have been allowed to push our wages down in this country, I'm also outraged by Congress.
I'm not the only one. Check out this editorial from The Livingston Daily: FEDERAL PAY RAISES: Pay hikes show what Congress thinks of American workers
Remember, during the whole debate over a bridge loan for auto companies, how members of Congress kept saying autoworkers are overpaid? Some U.S. senators and representatives claimed United Auto Workers members were knocking down $73, even $75, per hour.
That led federal lawmakers, like U.S. Sen. Bob Corker, R-Tenn., to call for a cut in pay for auto workers as a condition of the "bailout."
It turns out the figure was wildly wrong. You can only get to figures that high if you include all kinds of things not typically considered wages - health care, benefits, vacation time, pension costs, retirees' health care, etc.
The paper did the math and pointed out that full-time workers actually earn between $58,240 and $61,942 annually, which they point out is a decent living but won't make a person rich. Compare that to our lawmakers in Washington.
Still, it is a far cry from the $169,300 that U.S. senators and representatives were paid this year. If Congress members really work 40 hours a week for 52 weeks out of the year (and they don't), it is well over the $73 per hour rate they so objected to. It would in fact be more than $81 per hour, and that's not counting their benefits, their health care or their pension costs.
What's more, lawmakers are going to get a raise. Yup, that $81 an hour isn't good enough for them. They deserve more. Come January, U.S. senators and representatives get an additional $4,700 in their yearly paycheck, bringing their annual haul to $174,000. Assuming again, a 40-hour week for 52 weeks, that pay rate comes to a whopping $83.65 per hour.
They drew the following conclusion:
So let's make sure we have the logic correct - people who actually build things, in this case automobiles, deserve a pay cut from their $29.78 an hour ... it is lawmakers who deserve a boost in pay to $83.65 an hour ... for getting their facts wrong when they debate issues, like how much autoworkers get paid.
Yep, that pretty much sums it up. Lawmakers get raises when they make mistakes and spread lies. They even get them in the midst of the worst recession since the Great Depression. That's a sweet deal.
Hypocrisy aside, higher pay was supposed to translate into better government when Congress voted to raise their pay in 1989 from $89,500 to $135,000 annually. So much for that theory. We're fighting a war based on lies, inequality is at levels not seen since the Depression, our economy is in a deep recession, unemployment numbers could be 10% or higher by summer, millions of people have lost their homes to foreclosure, and millions more live in poverty and/or without health insurance.
In the real world, they'd be fired for such gross negligence.
I don't know where this originated, but my friend in South Carolina e-mailed this to me.
From the Desk of Santa
An important letter from Santa Claus to all children:
In preparing your letter to Santa, you must submit a 100-page turnaround plan documenting how you expect to be good.
If approved by the Grinch from Alabama, you will receive half your presents at Christmas and the batteries to run them in March.
Note that all end-of-year allowances must be forfeited, and current parents must be dumped, even though previous parents may be responsible for your bad behavior.
An appointed czar, who once read a blog on child-rearing, will make your life decisions for you.
Bicycles are not allowed; more expensive hybrid tricycles will be substituted, whether you fit one, or not.
If you do not comply with your plan to be good, you and all the people you know will have their homes foreclosed, and you will be replaced by a child from Asia, who gets to keep your toys and send your allowance back to his or her home country.
Kids from Wall Street are exempt from all of the above.
Conservative Pat Buchanan had a few choice words for The Toyota Republicans who voted against the automaker's bridge loan. [all emphasis added]
What are Republicans thinking of, pulling the plug, at Christmas, on GM, risking swift death for the greatest manufacturing company in American history, a strategic asset and pillar of the U.S. economy.
The $14 billion loan to the Big Three that Republican senators filibustered to death is just 2 percent of the $700 billion the Senate voted to bail out Wall Street. Having gone along with bailouts of Bear Stearns, AIG, Fannie, Freddie and CitiGroup, why refuse a reprieve to an industry upon which millions of the best blue-collar jobs in America depend?
Wow! Buchanan actually breaks Republican ranks and sides with blue collar workers. It gets even better.
Do the Republicans not yet understand how they lost the New Majority coalition that gave them three landslides and five victories in six presidential races from 1968 to 1988? Do they not know why the Reagan Democrats in Pennsylvania, Ohio and Michigan are going home?
The Republican Party gave their jobs away!
How? By telling U.S. manufacturers they could shut plants here, get rid of their U.S. workers, build factories in Mexico, Asia or China, and ship their products back, free of charge.
Republican globalists gave U.S. manufacturers every incentive to go abroad and take their jobs with them, the jobs of Middle America.
And, for 30 years, that is what U.S. manufacturers have done, have been forced to do, as their competitors closed down and moved their plants abroad in search of low-wage Third World labor.
It's Herbert Hoover time in here, Vice President Cheney is said to have told the Senate Republicans -- as they prepared to march out onto the floor and turn thumbs down on any reprieve for General Motors.
In today's world, America faces nationalistic trade rivals who manipulate currencies, employ nontariff barriers, subsidize their manufacturers, rebate value-added taxes on exports to us and impose value-added taxes on imports from us, all to capture our markets and kill our great companies. And we have a Republican Party blissfully ignorant that we live in a world of us or them. It doesn't even know who "us" is.
Buchanan has had an on again/off again relationship with Republicans so his words may fall on deaf ears. That's okay. Sooner or later voters get the last word on jobs - and theirs will be the first to go.
This letter comes from the Monroe Evening News here in Monroe, Michigan. I really think this letter puts into perspective what is really going on with the auto bailout.
As news of the Bailouts stay on center stage at all of the major networks and print media outlets recently, perhaps a few comments are in order. Politicians, especially those from the Southern states are having a field day in front of the cameras. The proposed 14 billion dollar loan to the Big Three has brought them from obscurity to center stage for the first time since they were elected. We witness the hypocrisy and mind numbing displays of their ignorance about the American Auto Industry and the Big Three in particular.
Where was their concern and outrage when the Feds were doling out Billions to Financial Institutions on Wall Street? The following statement was in the Bloomberg News on December 12th. The Federal Reserve refused a request by Bloomberg news to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral. Now you might ask, and rightly so, where does the $700 billion come in? The Feds stepped into a rescue role that was the original purpose of the Treasurys $700 billion Troubled Asset Relief Program, (TARP). The central bank loans don't have the Oversight Safeguards that Congress imposed upon the TARP.
Now if that doesn't make your brain explode, all of the above adds up to a figure much closer to $3 trillion of Taxpayer funds for the thieves on Wall Street. These political hacks sit up on their thrones berating the American Auto Workers for their high wages while they were giving taxpayer funds to CEO'S of these failing companies. Richard Fuld, CEO of now-dissolved Lehman Brothers, in his 8 years as honcho, took home nearly $500 million dollars, including $70 million he got last year while the company was collapsing. Goldman Sachs gained access to federal funds while three of their top executives drew around 56 million last year. Then theres AIG, the insurance giant. As it cost the taxpayers over 85 billion in taxpayers funds, the CEO got AIG's board to waive pay guidelines so top executives could grab an extra 5 million in bonuses.
The hypocrisy stinks to no end. They are so far out of touch with reality that they actually believe what they are saying. Their lives are consumed with Fundraising. Apparently Wall Street gave them more money than the American Big Three Auto Companies.
Author and Free Press columnist Mitch Albom wrote a response to the senators who killed the auto loan deal last week and it's generating a lot of attention here in Michigan. (It's been recommended more than 1,000 times so far.) He pretty much expresses the collective outrage most of us have been feeling since Friday, starting with the title - Hey, you senators: Thanks for nothing.
Here's a sample of what Albom had to say. Click over to read the rest.
Kill the car, kill the country. History will show that when America was on its knees, a handful of lawmakers tried to cut off its feet. And blame the workers. How suddenly did the workers - a small percentage of a car's cost - become justification for crushing an industry?
And when did Detroit become the symbol of economic dysfunction? Are you kidding? Have you looked in the mirror lately, Washington?
In a world where banks hemorrhaged trillions in a high-priced gamble called credit derivative swaps that YOU failed to regulate, how on earth do WE need to be punished? In a bailout era where you shoveled billions, with no demands, to banks and financial firms, why do WE need to be schooled on how to run a business?
Who is more dysfunctional in business than YOU? Who blows more money? Who wastes more trillions on favors, payback and pork?
At least in the auto industry, if folks don't like what you make, they don't have to buy it. In government, even your worst mistakes, we have to live with.
Ain't that the truth. Remember Iraq, senators? That was supposed to be cheap, and quick too. The only thing cheap about that mistake was the way you tried to cut corners and save money at the expense of our troops. From inadequate bullet proof vests and armored trucks to the horrid conditions at Walter Reed Hospital, you turned your backs on the soldiers just like you turned your back on middle-class jobs last week.
Over the last decade, General Motors has given $1.50 to Republican candidates for every $1 it has given to Democrats. That same pattern has been followed by Chrysler and Ford, which year after year have favored the right side of the aisle, sometimes by more than a 3-to-1 ratio in dollar terms.
Since 1990, the auto industry as a whole -- including suppliers, dealers and manufacturers -- has cut $100 million in checks to Republicans, compared with just $34 million to Democrats. [...]
"Carmakers have always leaned Republican," said Larry Sabato, director of the University of Virginia's Center for Politics. "But it'll be interesting to see whether what happened this week changes that pattern."
Tom Walsh has a very thoughtful column at the Free Press that reminds certain GOP senators of the Big 3's response after Hurricane Katrina:
...the automobile companies of Detroit did not harrumph that the Gulf Coast should have been better prepared.
They didn't sit back and wait for New Orleans to submit a detailed plan for future repair of the ruptured levees.[...]
Between them, the three Detroit auto companies gave more than $18 million in cash and vehicles to the Katrina relief effort in the ensuing months. No strings attached.
That's just one example. Detroit's Big 3 are known for their charity and generosity in communities across our country. Now its their turn to ask for help. Before you just brush them off and say no, consider what else Walsh had to say:
If you see a fellow American is drowning, gasping for air, do you quiz him for awhile about whether he's drunk or why he never learned to swim better? Or do you throw him a lifebuoy and ask questions later?
That, it seems to me, is where we are with America's car companies.
You can do nothing and watch them die, senators.
Or you can rush in immediately with emergency aid - as GM, Ford and Chrysler did in the case of Hurricane Katrina, and after the Sept. 11 terrorist attack, and during countless other disasters.
And you can hold their feet to the fire afterward, empowering a strong auto czar to make sure they do what's needed to withstand future shocks.
Millions of lives are hanging in the balance, senators, including those of children, seniors and others who rely on the workers for their incomes. Please consider them when you make your decision. This is about more than unions or poorly managed companies. This is about families. They don't deserve to have their feet held to the fire.
"The quality of mercy is not strained, It droppeth as the gentle rain from heaven, Upon the place beneath: it is twice blest, It blesseth him that gives and him that takes." - William Shakespeare's The Merchant of Venice.
