Blog @ MoreWhat.com

From the White House website and the out of place blog three items are featured. Health care reform is touted as ‘the key to our fiscal future.’ The 2000th transportation construction job located in Michigan is described so cutely as the road to recovery. And ‘a broad array of ways’ the public can participate in government extends the fantasy of transparency and accountability, etc.

And a list along side these items outlines legislation passed this year. The measure on credit card rules demonstrates the not so creative use of words to give the impression new laws are significant. Accountability (there’s that word again), responsibility and disclosure are combined with credit or card to give the cute acronym CARD for this law. Another weapons procurement law, another title suggesting a way to save homes of those at risk of foreclosure, something on fraud and recovery, serving America, managing public lands, extending some small business programs, PORKULUS, DTV and SCHIPS finish out the list with a bill characterized as securing fair pay.

You can conclude that all these things guarantee the spending of more taxpayer dollars. What you cannot conclude is whether or not they will do any good. Every time Congress passes a law and the President signs it money will be spent. But exactly what good it does or the fact that no one in Washington (or really at any other level of government) will do anything to present facts and figures with supporting data to prove the end results or lack of same stands as evidence nothing changes in the executive and legislative branches at the federal level and all talk of transparency and accountability is ludicrous.

Put this in comparison with the biggest issues this past week. North Korea has expanded on its course to collide with the rest of the world on nuclear threats and its reckless actions while the best the White House can do is say it supports the UN resolution that is simply one more impotent act in a series of them from the international community including current leadership of the United States.

Iran is reported to have held elections in which the little Hitler has been kept in power while the opposition is making claims of election fraud. Has anyone offered a helping hand to those making the allegations in an effort to place pressure on Iran to show proof of a valid election? If the world’s rogue state’s can refuse to recognize Israel why can’t the same be said of Iran based on this week’s elections?

A Treasury Dept task force ‘defends’ taking over the automobile industry There is some quiet noise being made about Gitmo and Uighur detainees and China’s opposition to relocating them from members of Congress. Obama plans to push another government takeover in the form of health care reform. The House of Representatives passes a State Dept funding plan to clean up other people’s messes and waste more taxpayer money. But let’s keep accepting the White House PR that progress is being made and things are going to get better. Cuz there from the government and here to help. Right.

It might be fair to say that Russia an China, being two other significant players on the world scene, are doing just as poorly as the US leadership in turning things around and getting serious about what really matters. But this blog is not that concerned about how well other countries are living up to their responsibilities. The US needs its leadership to return to principles that have kept us going all these years. Tearing down what has been and ‘rebuilding the fundamental ways’ this country functions as Obama has suggested is not a recipe for success.

Stanford Matthews
MoreWhat.com

While former President George W Bush has withheld comment on the performance of current President Barack Obama the reverse is not true. As if liberals haven’t bashed Bush enough over the last eight or nine years the liberals’ liberal, Barack Obama has once again resorted to blaming others for how things are. In a report from The Hill below it is mentioned that Senator Obama was more supportive of President Bush when public money first flowed to the auto industry.

Administration blames Bush for GM crisis

By Mike Soraghan
Posted: 06/07/09 11:24 AM [ET]

The Obama administration has a familiar response to criticism of the General Motors bailout – they inherited this mess from George W. Bush.

In his first five months in office, Obama has often said that some of the politically difficult decisions he’s made are the fault of his predecessor, most notably the $1.3 trillion budget deficit.

But he’d previously been more supportive of Bush’s handling of the crisis in the auto industry. When Bush sent $17.4 billion of the $700 billion bailout package to GM and Chrysler in December, Obama issued a statement calling Bush’s move “a necessary step.”

In another current report former First Lady Laura Bush expresses the sentiment or rationale behind the ‘courtesy’ silence on matters Obama from her husband, former President George W Bush. A sensible approach from a man so often criticized by liberals. A reasonable position apparently lost on the current President who at times expressed it was counterproductive to engage in assessing blame for the ways things are when he took office in January of this year.

Laura explains Bush ’silence’

Former first lady Laura Bush said while her husband, George W. Bush, does not think it’s appropriate for a former president to criticize his successor, she understands why former Vice President Dick Cheney has.

“That’s his right as a citizen of the U.S., and I think he also feels obligated and so I understand why he wants to speak out,” Bush said in an interview with ABC’s “Good Morning America.” “On the other hand George feels like as a former president that he owes President Obama his silence on issues and that there’s no reason to second guess any decisions he makes.”

A brief look back at how we got here may not match the current criticism emanating from the Obama Administration on the topic of a government takeover of the American auto industry. The House auto bailout bill passed and of the 237 votes in favor of it 205 were from Democrats. The bill died in the Senate and as the last line below indicates GOP members opposed it. Other reports suggest the ‘tough love’ measures were not strong enough.

Obama, who will inherit the problem next month, even if bailout billions are handed over in the meantime, said, “My hope is that the administration and the Congress will still find a way to give the industry the temporary assistance it needs while demanding the long-term restructuring that is absolutely required.”

In a letter to Bush, House Speaker Nancy Pelosi urged the president to demand “the same tough accountability” and taxpayer protections from the automakers as was contained in legislation that cleared the House at midweek.

The Dems were liking an auto bailout…..

In the days between then and now, the White House and congressional Democrats agreed on a $14 billion measure that would have extended short-term financing to the industry while establishing a powerful new “car czar” to make sure the money was used to turn the Big Three into competitive companies. That bill passed the House on Wednesday but immediately ran into opposition from Senate Republicans who said it did not go far enough.

Whatever the reason, the effort stalled when Republicans voted en masse against advancing the original House bill to a final vote late Thursday night.

The point is there is always enough blame to go around when things go wrong. Obama blaming Bush will only take him so far. Every President inherits the way things are when they take office. It is time for the current President to prove he is worthy of the office and set aside meaningless political bickering.

Stanford Matthews
MoreWhat.com

from AP via Forbes….
BMW, whose brands include Mini, Rolls-Royce ( RYCEY.PK - news - people ) and BMW, said sales in the first three months of the year totaled 277,264 compared with 351,787 a year earlier.

from Car and Driver…..

The automotive world has been waiting for BMW’s response to the Mercedes-Benz R-class since the debut of that crossover/minivan curiosity for 2006. For a while, a pseudo minivan in the same vein as the R-class was expected from Mercedes’ German rival, but the R’s dismal sales may have caused BMW to chart a different course of action.

This blog recently published reports about US automakers and a couple of their concept cars targeting new ideas prompted by bailouts and political insanity (sorry, redundant) to force consumers to adopt the liberal global warming and other eco-frenzies. While one example featured on an article on the main site presented a partnership between GM and US national labs the other example was Chrysler’s GEM or global electric motor car. At least the post on Tesla Motors presented what appears to be a reasonable example of a practical electric car.

Add to this a column by George Will linked to on this blog regarding consumer reluctance to accept ‘choice’ mandates from elected representatives and the fact that two trucks are still this year’s best selling ‘cars’, the BMW story certainly adds to the mix in as yet undetermined ways.

But the video was entertaining.

Stanford Matthews
MoreWhat.com

Besides the thumping given to Ariana Huffington by George F Will on ABC’s This Week (Sunday April 5, 2009) another column by Will ‘drives’ home the point that government meddling in the private sector or attempting to force the public to do what it doesn’t want to do is as ‘feckless’ as other liberal dreams held by those like the HuffPo Queen. (referring to harmony as being inevitable from the roundtable discussion)

Public isn’t buying into auto policy
By George Will
Washington Post Writers Group
Sunday, April 05, 2009

The stunning shift in consumer preferences that should make the White House’s freshly minted auto experts feel vulnerable has been reported under headlines such as “Like a Rock: Hybrid Car Sales Plummet” (Wall Street Journal, Dec. 9) and “Hybrid Car Sales Go from 60 to 0 at Breakneck Speed” (Los Angeles Times, March 17). Absent $4 gasoline, customers do not want the vehicles the politicians want them to want, even with manufacturers now offering large rebates and other incentives. The two best-selling vehicles in America this year are large pickup trucks. (click here to read the rest)

Through Nixon, Ford, Carter, Reagan, Bush (41), Clinton and Bush (43) nothing has been done to address the initial ‘heads up’ that oil is vulnerable or that other energy policy and use could benefit from having more options. Beyond the common criticism or debates on who is to blame or why alternatives have not been pursued effectively is the stubborn reality of bringing a product or service or commodity to market. It must be economically viable to succeed.

Just like peace on earth and goddwill toward men, it’s a nice sentiment but won’t happen until enough people want it. The same goes for alternative fuels, hybrids, electric cars or, to borrow a pet phrase from Obama, ‘a host of’ other issues.

Government rarely considers that the millions of people in this or other countries have millions of varying needs and problems to solve on a daily basis. And that government actions and their one size fits all mentality fails to impress. What’s worse is that whatever meddling politicians choose to be interested in is always paid for by the people that do not want it.

Stanford Matthews
MoreWhat.com

One of the excuses given by the federal government, aka President Bush and his Democrats as well as Treasury Secretary Henry Paulson, for providing bailout money on behalf of failed corporations like the auto industry was to restore investor confidence on Wall Street and consumer confidence on Main Street. While most consumers oppose the bailout frenzy, last check showed 60% or more oppose it, Wall Street is apparently no more confident than Main Street.

Dec. 23 (Bloomberg) — General Motors Corp. Chief Executive Officer Rick Wagoner said the biggest U.S. automaker got “what we asked for” with $9.4 billion in U.S. loans over the next 24 days. Investors bet that it’s not enough.

So why are investors growing more pessimistic about the auto industry bailout? One reason might be the following information from the same Bloomberg report. GM tumbled the most in more than a month yesterday in New York trading, while credit-default swaps on the company’s bonds jumped 2 percentage points in a sign of increasing concern that the Bush administration’s bailout may end in a default.

You have to just love the assortment of derivatives and other schemes available on Wall Street. Credit-default swaps or collateralized debt obligations or any number of derivatives available on Wall Street do complicate keeping score. Which by the way is really what investors using these products are doing. Not really investing, just keeping score and betting on the outcome. What do you mean it sounds like Vegas? An article surprisingly enough from TIME magazine has an interesting take on the subject. You can read it here.

“It’s almost impossible for a management that invested in the assets, that hired the people, that put forth the strategy, to change so dramatically in such a short period of time,” That quote from Edward Altman, a finance professor at New York University, may best describe much of what the rest of us have been thinking. If GM, Chrysler and/or Ford cannot avoid bankruptcy under normal circumstances, what good is a huge taxpayer funded bailout going to change?

Here’s the take at this point from GM’s CEO. Wagoner said last week that having secured the federal loans, GM’s biggest challenges would be working with debt holders on debt-for-equity exchanges and negotiating cost-saving agreements with unions. What he is really saying is what we all know. Everyone else will have to give something up or lose something for GM to possibly avoid bankruptcy. Something Wall Street and Main Street are convinced will happen anyway. All the numbers point that way.

Another item that stinks according to the view on this blog is that Ford is the only one of the three described as not in as much trouble as the other two. Yet their American competitors are being handed public money to delay the inevitable. Maybe if the likely outcome was not being interfered with by politicians Ford could survive by being slightly smarter than the other two companies. More evidence that the auto industry is in trouble comes from the foreign competitors.

Toyota has expressed it may be facing its first ever operating loss. That is big news and another indication of systemic problems for manufacturing in the turmoil that is the global financial crisis. Japanese car companies are typically considered leaner and more efficient than their American counterparts but whether true or not it gives credence to the notion that whatever the condition of this industry, harsh economic reality in terms of a global recession may be the straw that breaks the camel’s back. Dec. 23 (Bloomberg) — The worst U.S. auto market since the early 1990s may force Toyota Motor Corp. to do something that was once unthinkable: cut its North American payroll. Read the rest of the article to view the losses and negative forecast. This thing may just be heating up.

Even Russia is in the auto industry loop with concerns and money for fixing what may be unfixable. Russian citizens are protesting tariff increases on imported ‘used cars’ while the Russian government is offering assistance to car buyers. It is always a little different in Russia. But what is the same is auto industry troubles.

All over the globe car makers are retreating. The South Korean car makers yesterday said they will reduce output in December by an average of four hours a day per plant as the global recession saps auto demand. Toyota also joined Honda Motor Co. in cutting its earnings forecast because of the slowdown. And it just keeps getting worse for the automotive manufacturers and related business.

So the frequently expressed concern is again directed at those in Washington who push the bailouts with taxpayer funds. What the hell are you thinking?

Stanford Matthews
MoreWhat.com

Well President Bush, if you are looking for public approval of bankruptcy for the auto industry you can start here. Yes, bankruptcy however viewed and the difficulties attached to it is a long standing method for repairing failing companies as well as an option for individuals who find themselves in critical financial failure. There are more than several forms of bankruptcy and Chapter 11 is common and has been used many times to restructure failing companies and have them emerge later stronger for the effort. Certainly there have been those who have failed even with the option of bankruptcy. But if the auto industry is sincere in their expressed interest to save jobs and the businesses they represent as well as having an honest and practical plan for restoring the companies they operate, bankruptcy is the answer.

To receive public funding and risk taxpayer’s money with the probability they will not honor their obligations or be required to by the federal government, a bailout would do more harm to consumer confidence and to that of the markets if they are allowed a free pass on their dismal records at other’s expense. There should not be this much discussion on the subject which indicates the whole matter has become political and should be concluded with bankruptcy.

As for the article below, President Bush is right. The warnings were given and ignored. The subprime mortgage mess was the prime mover in the financial meltdown. Much needs to be repaired and the bailout frenzy is part of that. No one is as concerned, Mr President, about your legacy as they are the economic strength of the nation. Please use your remaining time if office to help fix the economy in a prudent manner. By default that will help shape your legacy in a way you will like as well as the rest of us.

Stanford Matthews
MoreWhat.com

Bush Says Economic Meltdown Forced Aggressive Intervention

President Bush says the ongoing financial crisis has forced him to endorse aggressive government intervention in numerous economic sectors in spite of his core, free market principles. President Bush restated his desire to prevent the U.S. auto industry from going bankrupt, while stressing that federal intervention should be temporary.

President Bush came into office eight years ago with an agenda of low taxes and limited government. But, in a wide ranging discussion in Washington, Mr. Bush admitted that the economic meltdown of the last year has forced him to set some of those principles aside.

The latest example is a rescue package the administration is contemplating for troubled U.S. automakers. An earlier attempt at a rescue plan passed the U.S. House of Representatives, but the measure failed in the Senate.

Mr. Bush noted that the U.S. auto industry employs millions of people, and that it is on the brink of collapse. “I am worried about a disorderly bankruptcy and what it would do to the psychology and the markets,” he said.

Mr. Bush said he intends to act, but has yet to decide how best to do so.

Earlier this year, Congress approved a $700-billion financial rescue package. Mr. Bush said he disliked the idea of such massive government expenditure and intervention, but that he had been warned of a possible economic catastrophe worse than the Great Depression if no action were taken.

The president was speaking at a gathering of the free market policy organization, the American Enterprise Institute. He was asked to respond to accusations from Democrats that his economic agenda sowed the seeds of the financial crisis.

“I’m looking forward to the true history of this financial crisis being written,” said Mr.Bush. “No question part of the crisis came about because of excesses in lending in the housing market. My administration early on expressed concern about implicit government guarantees in the mortgage industry, in Fannie and Freddie.”

Fannie Mae and Freddie Mac are government-sponsored mortgage insurers that have benefited from the financial rescue package.

Mr. Bush added that he understands the frustrations of ordinary Americans whose tax dollars are propping up corporations because of what he described as the “excesses on Wall Street.”

The president, whose term ends next month, also expressed disappointment that free trade pacts with Colombia and Panama have not been ratified during his time in office.

from White House Press Secretary Dana Perino:

It is disappointing that while appropriate and effective legislation to assist and restructure troubled automakers received majority support in both houses, Congress nevertheless failed to pass final legislation. The approach in that legislation provided an opportunity to use funds already appropriated for automakers, and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds go only to firms whose stakeholders were prepared to make the difficult decisions to become viable, competitive firms in the future.

Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms. However, given the current weakened state of the U.S. economy, we will consider other options if necessary - including use of the TARP program — to prevent a collapse of troubled automakers. A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time.

While the federal government may need to step in to prevent an immediate failure, the auto companies, their labor unions, and all other stakeholders must be prepared to make the meaningful concessions necessary to become viable.

# # #

Does anyone else smell the White House caving to the auto industry?

Stanford Matthews
MoreWhat.com

Dear White House: No means no (Michelle Malkin) 

The U.S. Senate has failed to reach agreement on an aid package to shore up the U.S. automobile industry. Despite intense negotiations this week, Democrats and Republicans could not bridge their differences over several issues, including Republican demands for wage cuts for unionized workers. Congressional leaders have decided to put off further consideration of the legislation until next year. VOA’s Deborah Tate reports from Capitol Hill.

In a procedural vote, the Senate voted 52 to 35 to advance a House-passed bill that would provide $14 billion to General Motors, Chrysler and Ford. The vote was eight short of the 60 necessary to move the legislation forward.

Asian stocks immediately began falling after the vote, which came late Thursday night after negotiations broke down on a Republican-sponsored compromise.

Senator Chris Dodd, a Connecticut Democrat who had played a key role in the negotiations, said the main stumbling block in the talks was a Republican demand that unionized autoworkers accept a wage cut next year to match the salaries at foreign automobile manufacturers.

The Bush administration issued a statement describing the collapse of the talks as “disappointing,” and saying it is evaluating its options. Senate Majority Leader Harry Reid expressed disappointment. “We’re not going to get it over the finish line,” he said.

Efforts to reach a deal were unsuccessful despite warnings from many Democrats that millions of jobs could be lost if one or more of the automakers go bankrupt.

White House spokeswoman Dana Perino echoed the concerns:

“We believe the economy is in such a weakened state right now that adding another possible loss of one million jobs is just something our economy cannot sustain at the moment,” she said.

But many Senate Republicans said the House bill was the wrong approach. Senator Richard Shelby is an Alabama Republican.

“Unless these companies are materially reconstructed, we’re wasting our time to try to keep them alive,” he said.

Lawmakers are now urging the Bush administration to help automakers by using funds from the $700 billion rescue package approved earlier this year for the financial industry - something the White House had opposed.

from MoreWhat.com:

Some say the auto industry bailout is dead at least until the new Congress is convened in January 2009. Now Reid, Pelosi and others are again calling on Bush to use TARP money to bailout the big (loser) three. Labor and management in the auto industry seem to be saying the same things they have said for years. Those in the public not directly affected by the auto industry troubles have been asking where their bailout is. Are the Dems and GOP at odds over this topic for the usual reasons of party politics or is it something else? How’d that go? Bear/Stearns, yes. Lehman Bros., no. Banks, other financials, yes. AIG, yes. Auto industry, no?

The details with each bailout provided or rejected certainly don’t simplify the analysis. Has to make you wonder what is going on behind closed doors. But in terms of the auto industry bailout alone, there does not seem to be a reassuring response from the industry that public money would solve anything. They have not presented a convincing argument that they are capable of saving their own industry with or without public bailout funding.

The public, aka voters, need to maintain a full court press on those in the federal government responsible for overseeing the transfer of massive amounts of public money to the private sector in an effort to guide public officials to actually deliver that which was promised at the beginning of this mess. Banks, corporations and any other beneficiaries of the bailout fiasco need to be held to the terms of the transactions. Get your house in order and repay the public money through sale of assets or other provisions of the deal. If the public goes to sleep on this one too it will become the disaster everyone wants to avoid.

Stanford Matthews

The GOP through the voice of Senate Minority Leader Mitch McConnell does not provide a convincing argument that Republican leadership supports bankruptcy for the auto industry rather than a taxpayer funded bailout. Simply arguing over the details of a bailout does not protect the American taxpayer. If the auto industry is unable or unwilling to formulate a radical approach to solve the industry’s problems no amount of taxpayer money will succeed in solving the problem.

As for others who may be affected by an auto industry failure what is different about that then all the past failures of other businesses. Are businesses that tied themselves to the auto industry incapable of transitioning to a different industry? Are workers displaced by failure in the auto industry incapable of doing what others do when they lose a job? Isn’t labeling a business as too big to fail just rhetoric for believing you have enough political influence to have someone else pay for your mistakes?

When animals dominated the American landscape of transportation in the ‘horse and buggy’ days what happened to all the people and jobs involved in that arrangement when the internal combustion engine and mechanically powered vehicles arrived on the scene? Did the government bail someone out then? Or did people adjust to changing times and develop their own solutions?

A more recent McConnell response on video is only currently available in Windows Media at republican.senate.gov won’t be linked here as this blog will not promote MS products. But the text version is here. (click)

Stanford Matthews
MoreWhat.com

Another classic situation of two competing arguments vying for taxpayer money.  Those who claim the sky is falling and not bailing out the auto industry will offer chaos to the American economy and the other argument which says ‘not so fast’.  The typical ploy of describing impending doom as a method to gain support for a dumb idea is once again at the heart of the discussion in Washington DC.

Rather than spending more taxpayer dollars and then trying to get them back if the auto industry continues to fail, forcing them into bankruptcy, take bankruptcy now. The auto industry would certainly not be the first business to accept such a fate.  And if successfully emerging from Chapter 11 at some point in the future they would not be the first to do that either.

Enough with the frenzied approach to use taxpayer dollars to bail out everyone who has failed.  Stop the insanity now.  Let those who are failing or those who have failed use standard measures to fix their problems rather than making those problems ours.

Good for you, Senate Republicans opposing the auto industry bailout.

Stanford Matthews
MoreWhat.com

Senate Republicans Vow to Block Aid to US Automakers

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Congressional Democrats say they have reached agreement with the White House on a deal to give U.S. automakers billions of dollars in loans and require the companies to restructure to stay competitive in the global marketplace.  Although the deal has wide support in the House of Representatives, but its fate remains unclear in the Senate, where Republicans say the measure does not go far enough to force the industry to reform.

The proposal would make $14 billion in loans immediately available to General Motors, Chrysler, and Ford to help shore up the beleaguered automakers through March. The loans would come from already-appropriated money.

In return, by the end of March the companies would have to submit a restructuring plan to achieve long-term viability and international competitiveness.

Some Senate Republicans were quick to express their opposition to the plan. They argue that giving automakers money first and then demanding that they restructure is the wrong approach.

Senator Richard Shelby of Alabama is among several Republicans who are vowing to block the bill from advancing in the Senate.

“Unless Chrysler, Ford and General Motors become lean and innovative and competitive in the marketplace, this is only delaying their funeral,” he said.

But Democratic Senator Debbie Stabenow of Michigan, the state where the automakers are based, warns that if one or more of the companies go bankrupt, millions of jobs would be lost - further harming a U.S. economy, which is already in recession.

“This is more than just penalizing a company that you are mad at. This is about the underpinnings of our economy, and fundamentally whether we are going to compete with every other country and make things in an advanced, manufacturing economy,” said Stabenov.

At the White House, Deputy Chief of Staff Joel Kaplan says President Bush would be in touch with individual Republican lawmakers to win their support for the plan.

“We wanted to make sure that it was tough and that this was not a bridge financing to nowhere, that we could look these members in the eye, and we could look the American people in the eye and say that this measure gives these companies a chance and their stakeholders a chance, but its not a lifeline to continue with bad management and a bad business plan,” said Kaplan.
The plan also calls for the president to appoint a so-called “car czar”, someone to oversee the loans and monitor the companies’ progress toward reforming.

Congress and the American automobile industry’s CEOs from GM, Ford and Chrysler continue their kabuki dance in Washington. In public view it would appear that politics and business as usual are responsible for avoiding a sensible approach. From concerns about an initial bailout of 25 or more billion taxpayer dollars being offered as an early Christmas present for automakers the latest figure in the press seems to be 15 billion with oversight. Is that the Congressional effort to make the whole thing more palatable to the general public? Lowball the front end offering and when things quiet down hand them more money when no one is looking? Why are the carmakers not being required to use the typical restructuring plan of bankruptcy available to all troubled businesses?

Senator Bob Corker (R-TN) stopped just short of advocating bankruptcy for the automakers. His plan concludes with the following statement. “These are the same types of conditions a bankruptcy judge might require to ensure that these companies become viable and sustainable into the future, and if they will agree to these terms then we have something to talk about. The process I have suggested would allow them to avoid the problems and stigma that accompany a formal bankruptcy, while forcing them to do the things they need to do to be successful companies.”

The ‘problems and stigma’ Senator Corker states pale in comparison to the refusal of automakers to accept the fact they have done little to remain competitive over the last few decades. Bankruptcy is exactly the course that should be taken. It requires the same entities who were involved in this failure, the automakers and their creditors, to arrange for salvaging the situation they all contributed to without involving the American taxpayer. The same could be said for other bailouts on the public dime but it is probably too late for that but no reason for allowing the insanity to continue.

Progress made in bailout plan for Big 3 automakers
By JULIE HIRSCHFELD DAVIS – 6 hours ago

WASHINGTON (AP) — Congressional negotiators continue hammering out legislation that would dole out billions to automakers — but promises to yank back the money if a government-run board and overseer decided the companies weren’t taking steps to overhaul themselves.

The plan would draw the emergency aid from an existing loan program meant to help the automakers build fuel-efficient vehicles. The size of the package hasn’t been finalized, but it is expected to be about $15 billion, several congressional aides said.

The unnamed Congressional negotiators and aides as well as the attempt to convince the public their money will be carefully utilized to save the auto industry provide little comfort based on Washington’s track record for decision making to date. It would not be a surprise if the politicians and business ‘leaders’ in this particular scenario employ the time tested tradition of dragging this out until the average citizen loses interest and they have no fear of public outrage to do what they planned from the beginning. Let the public pay for the fiasco. Perhaps that is why they always express concern for the ‘middle class’ as that is the group who shoulders the burden of paying for politics as usual.

Not that the general public shares no responsibility for the current economic problems and the bailout frenzy active in the nation’s capitol but they are not in as strong a position as those who control government and corporate America when it comes to influencing the outcome of public affairs. If the current problems and their implications for the future strength of the American economy are not sufficient to cause the public to change that fact it is likely nothing ever will.

(A Monday report from Reuters suggests a deal may be completed today. Wonderful, just wonderful

Stanford Matthews
MoreWhat.com

The lame excuses provided by the head of the UAW for bailing out the US auto industry proves once again organized labor has no shame and even less credibility which demonstrates its waning role in American life for decades. Most people may have held this view since it became difficult to distinguish organized labor from organized crime. From noble beginnings as a champion of the plight of ordinary workers to holding the country hostage with nationwide strikes and a string of financial scandals featuring pension funds and mob bosses, unions have rendered themselves just another corrupt special interest group clinging to self-serving agendas.

With one Democrat quoted in the article below supporting the most recent in a long string of bailouts and the history of ‘labor’ support for liberal politicians, specifically Dems, it is clear the socialist tendencies are alive and well on the left. The one Republican quoted expresses the practical viewpoint that the auto industry should seek the protection of Chapter 11 as is customary in such matters to restructure debt in an effort to turn the industry around rather than receive a government handout.

It would be better to hear the auto industry either emerged from Chapter 11 in a stronger position or has failed and been sold off to competitors than more news of the taxpayer being stuck with another Washington ripoff.

Stanford Matthews
MoreWhat.com

U.S. Auto Union Chief Pleads for Government Aid

Democratic leaders are demanding blueprints from Chrysler LLC, Ford Motor Co. and General Motors Corp. before they will schedule votes on any new federal aid.

The head of the United Auto Workers union made a public plea Sunday for government help for U.S. carmakers as the Big Three put the final touches on stabilization plans to submit to Congress.

“We cannot afford to see these companies fail,” said Ron Gettelfinger, the UAW chief, calling on Congress to approve the aid during a special session the week of Dec. 8.

Gettelfinger said a $25 billion rescue plan for the carmakers is “not a bailout, this is a loan — a bridge loan — that will get us through until we can take a longer-term look at exactly what needs to be done in the industry.”

Democratic leaders are demanding blueprints from Chrysler LLC, Ford Motor Co. and General Motors Corp. before they will schedule votes on any new federal aid. The plans, due Tuesday, are to be scrutinized at a Senate hearing Wednesday and a House hearing on Friday.

If lawmakers like what they see, Congress may reconvene the following week to consider the auto bailout.

While the payback for the greed in the subprime market continues to punish US financial markets and some of the perpetrators’ businesses, co-conspirators around the world are experiencing a similar fate. While liberal politicians in America love to criticize the Bush Administration for what they call failed policies including China’s practice of holding America’s debt, Asian financials are beginning to bleed just like those in the US. On news of money troubles in the US, markets in China, Japan, Korea, Australia and elsewhere across the region are duplicating stock market losses on Wall Street.

HONG KONG (MarketWatch) — Hong Kong stocks tumbled Thursday as panic-stricken investors sold off shares across-the-board amid a raging global financial crisis, forcing the benchmark indexes down for a seventh straight session and to levels not seen in more than two years.

The market in China lost 7% after the American taxpayer bailed out AIG and it lost more than 15% in the previous two sessions. As much as other countries enjoy bad mouthing the US when it comes to finance and greed nations of the world share this common bond of human vulnerability. Markets in Japan, South Korea and Australia lost between 3 and 4% mimicing US losses that exceeded 4%. As far as credit markets are concerned, if those comparing current money woes to the Great Depression look around they will find the entire planet poised to take a beating on past and current practice in investing and lack of discipline.

As the US Fed punishes Lehman but props up Bear, Fannie, Freddie and AIG, Japan and Australia injected billions into the money markets while Chinese money pundits claim their is liquidity available. Now that one of the usual suspects in the subprime scandal puts itself up for sale, WAMU is being looked at by the likes of Citigroup and others who have had their own problems with holding too much bad paper. So much for those predicting the bottom of the financial crisis across the planet. Even though the US has weathered similar predicaments in the past and calls for measures duplicating the response to the S&L debacle of the eighties abound the common concern finds the growing panic focused on how bad, how long and what will this do to me.

One sensible approach suggested in current reports was the need for ailing banks to merge in an effort to shore up weak balance sheets. Misery may love company but the wisdom of this strategy still requires all players to abandon excesses of taking on unlimited risk and returning to practices that resemble the Puritan ethic of hard work and discipline as well as the old fashioned notion of simply doing what’s right. The odds seem very long on that probability.

Bank of America and Barclay’s withdrew interest in aiding the AIG bailout when the Fed refused to guarantee them against failure. But no one seems to mind risking the American taxpayer’s money in times like these. The classic example of Lee Iacocca and Chrysler being balied out by the Fed in the late seventies and eighties cites everything worked out and no one lost. It’s a nice fairy tale but according to the Heritage Foundation, ‘ And so is the myth of the Great Chrysler Comeback of the once dying automaker has become the favorite example cited by proponents of national industrial policy who call for massive and costly federal efforts to revive what they describe as a des perately ailing American economy.’ Sham stock certificates were eaten by holders of record, creditors took losses just like a normal bankruptcy, thousands of workers were laid off and in general the bailout was not a bailout or the perfect story often reported. This may be part of the public opinion guide to be used by observers of the current strategy of government intervention supported as usual by taxpayer funding.

As for the millions facing foreclosure some of the homeowners may not be of the speculator variety. Not that it si possible or even advisable in all cases but there seems to be some wisdom in attempting to right the ship of many borrowers and allowing the chance to repay debt even in the shadow of recent defaults. Besides, the typical scenario of liquidating foreclosed properties to the vultures in waiting may only exacerbate an already tenuous mirage of a remedy. As REOs are unloaded at auction real estate prices of the surrounding properties may also take a hit placing more pressure on falling home prices. The properties as collateral for outstanding mortgages on the remaining stock of homes across the nation are then at least changed in loan to value ratios causing more problems for the banking industry.

But with banks hoarding cash in an attempt to weather the storm finding sources for restructuring home mortgages may just be a pipe dream So like the FED bailing out AIG, allowing the remaining problems to sort themselves out or offering government assistance in the form of taxpayer subsidies or guarantees really offers no insight into how this whole mess will play out. But it would not be a surprise if all the little guys get crushed by the outcome while fat cats like the CEOs and their golden parachutes skate the justice of paying for their sins. Life’s not fair and whatever the final verdict there will be plenty of casualties and plenty of examples of those who were enriched at other’s expense. Maybe more a case of survival of the most sinister rather than the fittest and the whole thing will take longer than we would like to play out.

Stanford Matthews
MoreWhat.com

Another fantasy is revisited in Detroit this month with the opening of the North American International Auto Show displaying the pathetic decline of the American auto industry. Similar to the unholy alliance between the medical community and Big Pharma plus the FDA, there is the auto industry and Big Oil and the requisite government agencies, politicians and lobbyists. The United States was given a big wake up call regarding energy and oil shortages 30 years ago and the cavalier attitude of those not interested in noticing generated terms like tree hugger and belittled initial attempts to develop alternative energy sources. And now Detroit is promoting electric cars. That would simply prove how bleak the future looks in the motor city. In addition, the marketing strategies of the past, the public’s insatiable appetite for gas guzzling muscle machines and status symbols and the auto industry caving to the demands of once powerful labor union is responsible to the fix they are in now.

All of that plus getting in bed with the competition over the last 20 or 30 years will surely produce little or no sympathy from the public over the auto industry’s plight. The CEO of GM baking a cake and the claim of a car that gets 640 miles per tank is too stupid and too late to salvage an industry too ignorant, too lazy or too greedy to adjust to market forces or the reality of energy developments and difficulties. It must look incredibly easy to Toyota as they close in on becoming the top dog. This sad saga applies to more than the American auto industry. Change is necessary but won’t happen soon enough or solve the myriad problems allowed to continue within American business. The once dominant force in the world had better wake up. Simlar to what Yamamoto said, the sleeping giant had better wake up.

Stanford Matthews
MoreWhat.com