COLLECTIVE MADNESS


“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Thursday, November 13, 2008

Will Detroit Seduce Congress?


You betcha!

Breaking Down The Bailouts

By Cal Thomas, For The Bulletin
11/12/2008

Remember when Democrats lamented the growing budget deficit and spoke of the burden our children and grandchildren would face if we didn't put our fiscal house in order? That was when Republicans ran the federal government and Democrats opposed tax cuts. Now that Democrats are about to be in charge, concern about the deficit has disappeared and spending plans proliferate, even though the national debt passed $10 trillion in September, and we added another $500 billion last month.


The latest, but by no means the last supplicant at the public trough, is the auto industry, which wants a bailout to save jobs because its cars are not selling. There is a reason for that and it can be summed up in five words: The United Auto Workers Union (UAW).

Half of the $50 billion the auto industry wants is for health care for its current and retired employees. This is the result of increasing UAW demands, strikes and threats of strikes unless health care and pension benefits were regularly increased. While in the past UAW settled for some benefit decreases while bargaining with the Big Three U.S. automakers, according to the Wall Street Journal in September of 2006, "on average, GM pays $81.18 an hour in wages and benefits to its U.S. hourly workers." Those increased costs, including the cost of health care, were passed along to consumers, adding $1,600 to the price of every vehicle GM produced. Last February, after General Motors offered buyouts to 74,000 employees, the Center for Automotive Research estimated the average wage, including benefits, for current GM workers had dropped to $78.21 an hour. New hires pulled down a paltry $26.65. GM, now facing a head-on collision with reality, has taken an important first step toward fiscal responsibility by announcing the elimination of lifetime health- care benefits for about 100,000 of its white-collar retirees at the end of this year.

Contrast this with non-union Toyota, whose total hourly U.S. labor costs, with benefits, are $35 per hour. Those lower labor costs mean Toyota enjoys a cost advantage over U.S. automakers of about $1,000 per vehicle. Is it any wonder that Toyota is outselling American automakers and from plants that have been built on U.S. soil? According to James Sherk of The Heritage Foundation, Japanese car companies provide their employees with good jobs at good wages: "The typical hourly employee at a Toyota, Honda or Nissan plant in America makes almost $100,000 a year in wages and benefits, before overtime."

While many in the Democratic Party have focused on "corporate greed" and "fairness," according to Sherk, "competition, not corporate greed, is the real problem facing labor unions. When unions negotiate raises for their members, companies pass those higher costs on to consumers." Americans used to tolerate those increases, but no more. Competition has brought lower prices for Japanese cars and Americans are buying more of them, taking a pass on those manufactured in Detroit.

The argument made by those favoring a bailout of Detroit is that it will save more than 100,000 jobs in the auto and related industries. But what good does that do if people are not buying cars in sufficient numbers to allow the Big Three to make a profit? This becomes the kind of corporate welfare Democrats decry when it comes to Wall Street. But, then, Wall Street isn't unionized and Democrats want and need the union vote.

What about Chrysler's bailout 30 years ago? It was a loan. Didn't Chrysler pay back the government? Wasn't it worth the risk to save jobs? According to the Heritage Foundation, the $1.2 billion in loan guarantees made by the Carter administration still resulted in a partial bankruptcy for Chrysler. "Most of the company's creditors were forced to accept losses just as they would if Chrysler had gone through Chapter 11, and the company ended up firing almost half its workforce, including 20,000 white-collar workers and 42,600 hourly wage earners. The only people who benefited from the bailout were Chrysler shareholders."

The Heritage Foundation also notes, "If Washington really wants to help Detroit, they could end the regulatory nightmare that prevents profitable, fuel-efficient cars from reaching market." Ford, they say, has begun selling a car that gets 65 mpg, but they're not selling it in America. Why? Because it runs on diesel fuel "and environmentalists in the U.S. have fought to keep diesel taxes high and refinery capacity low."

More government intervention in private industry will bring us closer to socialism. Better to renegotiate the labor contracts, re-train workers for other jobs, or help them get hired at the Japanese auto plants in America than to subsidize a failed economic model for the sake of political gain.

Cal Thomas is a syndicated columnist.



72 comments:

  1. She beats hell outta Waxman's schnooz.

    ReplyDelete
  2. ...it can be summed up in five words: The United Auto Workers Union (UAW).

    The long avoided day of reckoning is here. Will be interesting to see how the union spins this. One thing's for sure, the admin and congress will cover for them.

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  3. Well, bob, you should support the eugenic engineering crew, vote with your wallet, donate to Planned Paranthood, they are operating in an effort to kill Affirmative Action, too.

    FOX News reports
    The revelation a few weeks ago that Planned Parenthood employees had encouraged telephone donations from callers hoping to facilitate abortions of black babies...

    The callers contacted Planned Parenthood's vice presidents of development and marketing in Idaho and Oklahoma, other officials at their Ohio and New Mexico offices and officials in three other (so far) unnamed states because the UCLA group suspected that Planned Parenthood was specifically targeting minorities and minority neighborhoods for abortions.

    The donor and a representative of New Mexico Planned Parenthood were recorded as saying:

    Donor: "I really face trouble with affirmative action. I don't want my kids to be disadvantaged ..."

    Planned Parenthood representative: "Yeah."

    Donor: "... against blacks in college. The less black kids out there the better."

    Planned Parenthood representative: "Yeah, yeah, it's a strange time to be sure."


    Those Planned Paranthood folk help to teminate a third of all pregnencies amongst blacks, bob.

    Celebrate! Celebrate! Dance to the musice!!!

    Send 'em some money, bob, they'll put it to your "good works"

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  4. Now, in light of the election, many are asking: What is the future of the Republican Party?

    But that is the wrong question. The proper question should be: Where is our country heading? There's no doubt that a large majority of Americans believe we're on the wrong track. That's why the candidate demanding "change" won the election. It mattered not that the change offered was no change at all, only a change in the engineer of a runaway train.

    Once it's figured out what is fundamentally wrong with our political and economic system, solutions can be offered. If the Republican Party can grasp hold of the policy changes needed, then the party can be rebuilt.

    In the rise and fall of the recent Republican reign of power these past decades, the goal of the party had grown to be only that of gaining and maintaining power -- with total sacrifice of the original Republican belief in shrinking the size of government.

    ...

    The Republican Congress never once stood up against the Bush/Rove machine that demanded support for unconstitutional wars, attacks on civil liberties here at home, and an economic policy based on more spending, more debt, and more inflation -- while constantly preaching the flawed doctrine that deficits don't matter as long as taxes aren't raised.

    But what the Republican leadership didn't realize was that ALL spending is a tax on middle-class Americans through price inflation and that eventually the inevitable consequence is paying for the extravagance with a financial crisis.

    ...

    During the debates in the Republican Presidential primary, even though I am a 10-term sitting Representative Member of Congress, I was challenged more than once on my Republican credentials. The fact that I was repeatedly asked how I could be a Republican when I was talking a different language than the other candidates answers the question of how the Republican Party can slip so far so fast.

    My rhetorical answer at the time was simple: Why should one be excluded from the Republican Party for believing and always voting for:

    • Limited government power

    • A balanced budget

    • Personal liberty

    • Strict adherence to the Constitution

    • Sound money

    • A strong defense while avoiding all undeclared wars

    • No nation-building and no policing the world

    How can a party that still pretends to be the party of limited government distance itself outright from these views and expect to maintain credibility? Since the credibility of the Republican Party has now been lost, how can it regain credibility without embracing these views, or at least showing respect for them?

    ...

    To ignore the political struggle and only "hope for the best" is pure folly. The march toward a dictatorial powerful state is now in double time.

    All those who care -- and especially those who understand the stakes involved -- have an ominous responsibility to energetically get involved in the battle of survival for a free and prosperous America.


    Ron Paul

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  5. Paul's points. Worth repeating for more than mere discussion, but that's what I'm up to.

    • Limited government power

    • A balanced budget

    • Personal liberty

    • Strict adherence to the Constitution

    • Sound money

    ------

    • A strong defense while avoiding all undeclared wars

    • No nation-building and no policing the world


    The first five stand, needing no qualification.

    I'd add to them border controls and enforcement of immigration laws within the borders. Dealing with the illegals already here is a thorny problem, but not unsolvable, possible only when the border is controlled.

    A strong defense capability requires for me the will to respond instantly to threats, perhaps preemptively, declaration of war or not. Once committed, there's only one permissible outcome; total victory as it's been defined here before.

    I'd agree with no nation building, but find the 'no policing' doctrine too confining. I'd need to think on that.

    Overall, Paul's got my attention. It seems to me the Republicans should, and can, rebuild within a framework closely patterned on such an outline. Those who've discredited the Republican Party are those who have strayed from the core values. They should be purged. I'd wish it to be done without the coaching from the sidelines by the media and half-assed punditry, but that seems unavoidable. I think a case could be made that the media, by design, helped manipulate the selection of McCain. It's that kind of interference I'm thinking of.

    This posting focuses some thoughts I've been struggling with for a while.

    Thanks, rat.

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  6. Nothing to it, lineman

    But ultimately, whether GM is dead or alive, the taxpayers are on the hook for billions, for everything from lost tax revenues to higher unemployment costs to taking over GM's pension obligations. The decision that Washington has to make is whether we pay for GM's survival or for its funeral.

    Is General Motors Worth Saving?

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  7. November 12, 2008

    GOP Vote Declines Less Than NYT Profit

    By Ann Coulter


    ...They adored McCain at the Times! Does anyone here not see a cluster of bright red flags?

    ...

    But now Brooks presumes to lecture Republicans about what to do next time. How about: "Don't take David Brooks' advice"?

    ReplyDelete
  8. "Will Detroit seduce Congress?"

    Not if I get there first.

    ReplyDelete
  9. Is that lady's name 'Detroit'?

    That beautiful leg and that high heeled shoe have my attention.

    But if she says 'yes' either get some condoms, or some birth control pills, or get married.

    Don't mess it up.

    ReplyDelete
  10. Linearthinker

    You said it. The common thread running thru the big 3 automakers, the airlines, and the major trucking companies is a cancer called UNION. It's the 800 lb. gorilla in the room no one wants to talk about.

    ReplyDelete
  11. 2164th said,

    "Should the government keep the shares in social security and sell them at a later date for a profit"

    The underlying premise to this is that a particulars stock price will always eventually rise. This is, of course, not true on a individual stocks basis nor not necessarily true on an aggregate basis. Booms and Busts have been part of the business cycle since, well, forever. The governments role seems to be one of trying to mitigate the amplitude of that cycle. By wading in and buying stocks, as you suggest, may increase the period of the cycle but would most likely increase it's amplitude. If the government simply bought and held for ever you'd never see the the profit you propose. If they actively traded the stocks, well, they'd be just another player looking to make a profit thus contributing nothing but liquidity. If they were a player unconcerned about profit but rather in goosing the market, as you seem to wish them to do, then they'd most likely simply book losses.

    I think the government should play a strong role as a regulator. An entity which ensures transparency and limits risk taking. Greenspan's realization that organizations do not act like individuals (i.e. banks didn't take sufficient risk avoidance measures to protect themselves) is a key reason for the need for government regulation (the same applies for corporations). This is very different from the government becoming an active player in the economy through direct investment and management and begs the question of what to do in the short term to deal with the current crisis. I would suggest that expanding the rescue/bailout from the current targeted sectors to the stock market in general would be a mistake and ultimately futile.






    Blogger trish said...

    "Colombia: I'm depending on Gates and the Chiefs to make the case."


    Which case is that you wish them to make trish? The free trade case? If so, what does the military role have to do with the free trade case? Wouldn't that not be Empire Lite but rather Empire?





    Bobal said,

    "You can't blame Bush anymore. He's outta there."

    Bobal, for the most part you seem to be losing it and your rants absurd. Simply not worth reading or responding to but that above quote stood out and is, on its face, simply not true. Bush and team are still in power and he must accept his fair share of the blame for a good deal of time after he retires to his Texas ranch. He still is likable guy though, just a bad decision maker, and the consequences of his decisions will reverberate for years to come.

    ReplyDelete
  12. I'm gonna puke.
    Ford builds a car in Europe that gets 65mpg on its little turbo-diesel engine. The thing is made in the UK.

    Of course, according to Ford "it can never be made here" for a variety of really stupid, spineless reasons.

    Bankruptcy is the only option for the Useless Three. As a fellow on another board so eloquently stated: "GM is a hospital that makes the occasional good car."

    The Boards of Directors of these zombie companies need to fire all management and bring in fresh minds from Honda, Nissan, Toyota, Silicon Valley and all of the start ups (like Bright Automotive) that are developing the cars for the 21st century and create entirely new cultures to develop cars.

    The risk management departments from all three companies should be sent to the North Pole to hand dig for new oil to run SUVs. Those assholes are paid to see constraints that will harm their businesses and they totally failed.

    The Useless Three need to restructure themselves, tear up the UAW contracts, the supplier contracts and the pension funds and build a new culture that says "Si se puede" to getting the 65mpg buzzbots on American roads.

    The useless cocksuckers were given $25B of our money to retool to build such cars, but in the usual dance of the economic fascist / socialist-lite US system between huge business and huge government, nothing is moving on that end yet.

    Since we're talking socialism (and screw it, I'm going to join them here because this time they certainly beat the shit out of anyone that likes liberty), put all the healthcare and pensions into a separate entity in receivership. Get all the eggheads from Wall Street to structure a new private enterprise to manage them or sell them off to HMOs and institutional investor houses. See, I'm compassionate just like the guy that racked the national debt to $10 trillion. That felt goooood.

    Get the car makers back to the business of making cars with no excuses.

    Kill the three things that made Detroit suck. The management, the unions and the obligations that have nothing to do with carmaking.

    I anticipate congress will whore up as ususal, with massive republican support, to preserve the status quo. Money down a rathole of corruption and ineptitude.

    ReplyDelete
  13. Steiger Tractor Company was born in Minnesota. I would have said North Dakota, but the article says otherwise. I had a Bearcat II and have driven some of the other newer models. Steiger has gotten absorded into the great corporate world, but those guys had a really good idea.
    They created a tractor that was ideal for out here. You couldn't tip one over. They'd slide, but not tip. They had a Cat engine, and would swing in the middle. The only fault I found was the steering wheel was a little too big, and wore you out after a day of it. My John Deere 8440 which was basically the same idea, was a lot more comfortable to sit in all day. And quieter.

    I don't know what we ought to do about the auto makers, but I think we ought to reward invention and ingenuity.

    ReplyDelete
  14. You can't make a leg like that in a factory.

    ReplyDelete
  15. Ash, Bush has no power at all anymore.

    We've gone through this whole conversation about Fannie Mae and Freddie, and what we have found is we loaned a whole lot of money to people that couldn't pay. And, we've found the democrats were mostly behind it.

    Beyond all these economic arguments, I think the country had a real choice here, between a woman that knows not to kill her own children, and a guy that votes for letting the little abortion baby die in the laundry room.

    You've chosen one way, I another.

    ReplyDelete
  16. "As GM goes so does the Nation"

    ReplyDelete
  17. As GM goes so does the Nation

    A deep thought, indeed.

    ReplyDelete
  18. GINGRICH: Well, if you go to Americansolutions.com we listed the platform of the American people, and to be in that platform, an issue has to have an absolute majority of Democrats, an absolute majority of Republicans, and an absolute majority of independents.

    When we launched Drill Here, Drill Now, Pay Less that was in the platform because 79 percent of the American people believe we ought to be drilling for American oil and gas rather than buying it from foreign dictators.

    Now, I noticed in the "Washington Post" exit poll, 50 percent of the people who voted for Senator Obama believe we should be drilling offshore. So even among Democrats, there's a solid majority -- we had 100,000 people sign the petition as Democrats for more energy at lower costs, and I think that there's a solid base there.

    Eighty-seven percent of the people, Alan, believe English ought to be the official language of government. 87 percent. Absolute majority of Democrats, Republicans and independents. If you look at that platform, there are over a hundred issues on which you can get an absolute majority, a red, white, and blue majority, in stead of a red versus blue.


    On Murdock News

    ReplyDelete
  19. Eighty-seven percent of the people, Alan, believe English ought to be the official language of government.

    Yes, indeed, we need to have a common language.


    We have enough other divisions among us. Let us have a common language.

    ReplyDelete
  20. Old saying that GM/Nation one. Think it is true?

    ReplyDelete
  21. Newt speaks about the American Platform

    And here it sits to be read by one and all.

    As it could be a useful tool. To know where the majority of the people of the United States stand, on a wide range of issues.

    Interesting reading, to say the least. Informative, as well.

    ReplyDelete
  22. How about, a baby is a baby, a living thing, a being.

    As the baby goes, so goes the nation.

    You had a choice, Ash, between a woman that knows not to kill her own children, and a guy that voted to let the little babies die in the laundry room.

    Live with it or die with it, I don't care.

    We are not the same, you and I.

    I would not want to go fishing with the likes of you.

    ReplyDelete
  23. The majority of citizens will support the Obama civilian corps, if marketed correctly

    The Department of Homeland Security and other government agencies should develop
    programs to teach Americans what they can do as individuals to help in the fight against
    terror. (82 to 13)

    ReplyDelete
  24. bobal you have fun playing by yourself with your straw men.

    ReplyDelete
  25. "As GM goes so does the Nation"



    Horse puckey.

    Honda, Toyota, Nissan, KIA and VW will fill the gap.

    There are as many - if not more - blue collar workers bolting together cars for these makers as there are (were) for the Useless Three.

    Demand for cars is still there. Demand for Suburbans and muscle-cars has vaporized.

    The Useless Three ignored oil supply signals for decades. DECADES. This is what they get for it.

    ReplyDelete
  26. You actually voted for the guy,
    Ash.

    You are a real voter.

    Not a straw man.

    Though that describes you pretty well.

    ReplyDelete
  27. Climate change and global warming are probably happening. (82 to 13)

    We support building more nuclear power plants to cut carbon emissions. (65 to 28)

    ReplyDelete
  28. The American people favor legal immigration, control of the border, ending illegal immigration with an emphasis on employer responsibility, immediate deportation of felons who are here illegally, a requirement to return home to become legal temporary workers, assimilation of those who sincerely want to become American, and a sophisticated, technologically advanced temporary worker system.

    ReplyDelete
  29. There is a really good American short story written by an American doctor, whose name I can't recall, getting older you know, about how he tried to treat this nasty little white girl. He was trying to help her, and she would not cooperate.

    Let them live in their own stink.

    ReplyDelete
  30. Government should offer intensive English language instruction to all who need it,
    including stipends to help immigrants attend the programs. (83 to 15)

    ReplyDelete
  31. Which case is that you wish them to make trish? The free trade case? If so, what does the military role have to do with the free trade case? Wouldn't that not be Empire Lite but rather Empire?

    - ash

    The case for the continuation of Plan Colombia. It's set to expire at a moment when the country is at a tipping point.

    Chavez calls it Pax Romana, if that makes you feel better.

    ReplyDelete
  32. Hugo and mat, brothers in intellectual terminology.

    ReplyDelete
  33. Marginalrevolution:

    Now is the Time for the Buffalo Commons
    Alex Tabarrok

    The Federal Government owns more than half of Oregon, Utah, Nevada, Idaho and Alaska and it owns nearly half of California, Arizona, New Mexico and Wyoming. See the map for more. It is time for a sale. Selling even some western land could raise hundreds of billions of dollars - perhaps trillions of dollars - for the Federal government at a time when the funds are badly needed and no one want to raise taxes. At the same time, a sale of western land would improve the efficiency of land allocation.

    Mapowns_the_west

    Does a sale of western lands mean reducing national parkland? No, first much of the land isn't parkland. Second, I propose a deal. The government should sell some of its most valuable land in the west and use some of the proceeds to buy low-price land in the Great Plains.

    The western Great Plains are emptying of people. Some 322 of the 443 Plains counties have lost population since 1930 and a majority have lost population since 1990.

    Now is the time for the Federal government to sell high-priced land in the West, use some of the proceeds to deal with current problems and use some of the proceeds to buy low-priced land in the Plains creating the world's largest nature park, The Buffalo Commons.

    Hat tip to Carl Close for the pointer to the map.

    November 13, 2008 at 07:41 AM in Economics, History, Science, Travels

    ReplyDelete
  34. Under the category of shits and giggles. Cal Thomas, meet Socialistworker.org:

    From bailout to boondoggle

    Lee Sustar looks at how the government's bailout has become a handout to Corporate America.

    November 13, 2008

    THE MUCH-HYPED $700 billion bailout for the banks has become a grab-bag of policies and giveaways to corporations of all sorts as the Bush administration reels under the pressure of collapsing stock prices, frozen credit markets and skyrocketing unemployment.

    Treasury Secretary Henry Paulson announced November 12 that he'll use the second half of the $700 bailout fund for direct government investment directly into U.S. banks, abandoning his original plan to use the money to buy up bad mortgage-related debts from financial institutions.

    Meanwhile, the lame-duck Congress, under pressure from president-elect Barack Obama, wants to use that fund to prevent the possible bankruptcy of General Motors. And with other corporate bankruptcies looming, many big corporations and entire industries are lining up to lobby for a rescue by the government.

    If government funds are funneled to GM and other automakers, it would only be the latest in a series of sweeping government efforts to counteract the world financial crisis.

    The $200 billion nationalization of mortgage companies Fannie Mae and Freddie Mac, the $150 billion takeover of insurance company AIG and the $700 billion bank bailout fund together constitute the most aggressive government intervention in the economy since the 1930s. And that doesn't count an estimated $140 billion in tax write-offs allowed by the Treasury Department to encourage bank mergers, or the extra $1 trillion in liabilities that the Federal Reserve Bank has taken on its books since September.

    - - - - - - - - - - - - - - - -

    YET FOR all the money spent, the results are negligible. Loss-ridden banks are hoarding their bailout money and refusing to make loans. Fannie and Freddie continue to lose tens of billions of dollars.

    Incredibly, AIG has even had to be rescued from its original government rescue: The Treasury Department is lowering the interest rate on the company's government loan, investing $40 billion in AIG stock, and spending another $50 billion to create off-the-books holding companies to buy up the toxic securities that the company owned. (It was just these off-the-books operations that allowed the banks to hide their bad assets in the first place, which set the stage for the financial meltdown.)

    Still, the credit squeeze drags on, choking off consumer spending that's already constrained by falling real wages and rising joblessness. The biggest impact of this pullback by consumers is in the auto industry, with the three Detroit automakers reporting their worst sales figures in decades. As a result, the Democrats are attempting to use the lame-duck session of Congress to pass an economic stimulus bill that may include an emergency loan for the auto industry.

    Treasury Secretary Paulson says the $700 billion allocated to the Troubled Asset Relief Program (TARP) shouldn't be used to bail out the car companies.

    Beyond that, though, pretty much anything goes. In a November 12 press conference, Paulson announced that TARP funds--originally slated for buying up bad mortgage-related securities from banks--will now be used almost exclusively for direct government investments in banks and financial institutions.

    This flip-flop--the latest of many by Paulson since the financial panic began in September--comes under pressure from Europe, where governments have partially nationalized their biggest banks. The U.S. had to follow suit or see money flow across the Atlantic to take advantage of foreign governments' financial guarantees.

    So Paulson, a free-market Republican and former CEO of the investment bank Goldman Sachs, suddenly announced last month that the U.S. would spend $250 billion to buy up the stocks of some of the biggest U.S. banks. Now, he wants to spend the second $350 billion installment in the same way.

    Already, the first $350 billion of the TARP fund is committed, with just $60 billion left to spend. And competition for those remaining funds is fierce. Insurers Allstate and MetLife have asked for bailout money, and American Express got federal regulators' approval to transform itself into a bank holding company, which makes it eligible for TARP. "The biggest surprise was how quickly it went from 'I don't need this,' to 'How do I get in?'" Michele Davis, head of public affairs at the Treasury Department, told the New York Times.

    "Then," the Times continued, "there is the National Marine Manufacturers Association, which is asking whether boat financing companies might be eligible for aid to ensure that dealers have access to credit to stock their showrooms with boats--costs have gone up as the credit markets have calcified. Using much the same rationale, the National Automobile Dealers Association is pleading that car dealers get consideration, too."

    - - - - - - - - - - - - - - - -

    WHILE LOBBYISTS turn the TARP into a piñata for Corporate America, the U.S. economy appears to be in freefall.

    The big jump in unemployment from 6.3 percent in September to 6.5 percent in October means that more than 10 million people are out of work--a figure that doesn't include those forced to settle for part-time work or who have dropped out of the labor market altogether. The plunge in consumer spending--the worst since 1980--reflects not only rising unemployment and shrinking real wages, but the wipeout of $5 trillion in wealth since the housing bubble burst last year.

    The U.S. economy is likely to get worse--much worse--before it gets better. According to one widely watched measure, manufacturing is at its lowest level since 1981. And the continued refusal of banks to lend to one another, let alone to profitable companies and creditworthy consumers, is jamming the gears of the U.S. and world economy, further suppressing demand.

    Thus, what seemed to be a shortage of raw materials just a few months ago now appears as a glut, with the price of oil, for example, at about half the level it was at in July.

    In the short term, the problem of overcapacity is most acute in the auto industry. "Blame will fly as the damage deepens, but the unhappy fact is that the market really doesn't need three big U.S. automakers any more," wrote U.S. News and World Report columnist Rick Newman.

    "Compared with peak sales of nearly 17 million vehicles in 2006, sales in the U.S. market are likely to decline by at least 20 percent this year and possibly next year, too. The Detroit Three had too many factories during the boom times, and their overcapacity seems vast now that Americans are poised to buy 3 or 4 million fewer vehicles."

    And with U.S. demand cut back, countries that depend on exports to the U.S. market--most prominently China but many others as well--are struggling with slower growth. Even China's $587 billion economic stimulus package to build new infrastructure--a spending plan that is far bigger, proportionately, than the U.S. bailout--is unlikely to absorb the industrial overcapacity in that country, let alone give a lift to the world economy.

    "This package alone will not be able to turn the global commodities markets around," said Frank Gong, a China analyst for JPMorgan Chase. "For infrastructure spending, you probably need steel, cement, heavy machinery and a lot of cheap labor, but China is still going to see a big slowdown in exports and industrial output."

    The deepening crisis will be the focus of a November 15 summit of the Group of 20 nations--the seven industrialized countries plus rising economies like Brazil, India, Russia, China and others.

    The meeting, hosted in Washington by the outgoing and hapless Bush Administration, was hastily planned and won't accomplish anything other than giving world leaders a chance to try and boost confidence in the financial system.

    What's presented as coordinated efforts to boost the world economy are in fact competitive measures by rival nations, each intent on using the power of the state to shore up their financial systems and main corporations. The aim of each is to avoid the worst of the crisis by passing its cost on to others.

    It's only in this context that Paulson's various bailout schemes make sense. Making up policy as he goes along, his priority is to protect his former fellow Wall Street CEOs and to shore up the banking system, not to help the workers who are bearing the brunt of the crisis.

    The Democrats may prevail in their effort to include the auto industry in this ad hoc effort to keep the U.S. industrial base from unraveling. But unless and until working people are organized enough to fight for different priorities, the benefits of government intervention will go the same business chiefs who created this catastrophe.

    - - - - - - - - - - - - - - - - -

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  35. Daniel Ikenson makes the case for...consolidation:


    There's Nothing Wrong with a "Big Two"

    by Daniel J. Ikenson

    Daniel J. Ikenson is associate director of the Center for Trade Policy Studies at the Cato Institute.

    Added to cato.org on November 11, 2008


    The "Big Three" auto producers - Ford, Daimler-Chrysler and General Motors - want the public to believe their industry faces an existential threat. It doesn't. They want the public to believe they are innocent victims of circumstances beyond their control. They're not. They want the treasury secretary to authorize a fresh $25 billion bailout for the industry and the President-elect to pledge support for their parochial cause. Neither should (though Barack Obama apparently did this week, in his meeting with President Bush).

    The auto industry doesn't need a bailout. It needs a shakeout.

    Yes, it's true, some iconic firms - with General Motors at the top of the list - are in serious financial trouble and could fail. But why should those firms be bailed out by the taxpayers? While there is some merit to the suggestion that the industry's woes are attributable to the credit freeze, that's just a small part of the story.

    Many of the Big Three's problems are self-made. The contraction of demand is just the latest dark cloud, and a problem that affects all industries, not just autos. Thus, if Detroit should get a bailout, why not help America's home builders, coal miners and masseuses, too?

    Detroit's problems predate the financial meltdown. Management and labor consigned the Big Three to a future of troubles when they agreed to preposterous work rules, requiring management to pay workers at 90% of their salaries when they were laid off. Those rules compelled General Motors in particular to keep pumping out vehicles in the face of shrinking demand earlier in the decade, ushering in the period of "0% financing" for five, six and seven years. Because labor costs were locked in, it made more sense to keep producing and selling at below the full cost of production.

    Management also gave labor the "Cadillac platter" of health and retirement benefits, all of which substantially increased the cost of producing vehicles at unionized plants in America. Management and labor always assumed that the U.S. government would come to the rescue when the chickens came home to roost over this inefficient, uncompetitive cost structure.

    The auto industry doesn't need a bailout. It needs a shakeout.

    Those were only the beginning of the industry's economic sins. On the demand side, Big Three management demonstrated an egregious failure of imagination, if not downright dereliction of duty, in assuming that large pickup trucks and SUVs would never fall out of favor. When SUVs and trucks are excluded, Big Three offerings barely make the list of the country's top 10 selling cars of the decade. None has been a top five seller. Shouldn't producers try to make things that people want to consume before scapegoating their failures and seeking bailouts?

    But here's the equally important thing to realize: If GM fails - or even GM and Ford both fail - we are not facing the loss of the U.S. auto industry. There are plenty of profitable operations, particularly those operating outside of Michigan. In 2008, the Big Three accounts for roughly 55% of light vehicle production and 50% of sales. To speak of the U.S. automobile industry these days, one must include Honda, Toyota, Nissan, Kia, Hyundai, BMW - and other foreign nameplate producers who manufacture vehicles in the U.S.

    Those producers are the other half of the U.S. auto industry. They employ American workers, pay U.S. taxes, support other U.S. businesses, contribute to local charities, have genuine stakes in their local communities and face the same contracting demand for automobiles as does the Big Three. The difference is that these companies have a better track record of making products Americans want to consume and are not seeking federal assistance.

    If taxpayers are forced to subsidize automobile producers, they should at least be able to subsidize the successful ones.

    If one or two of the Big Three went into bankruptcy and liquidated, people would lose their jobs. But the sky would not fall. In fact, that outcome would ultimately improve prospects for the firms and workers that remain in the industry. That is precisely what happened with the U.S. steel industry, which responded to waning fortunes and dozens of bankruptcies earlier in the decade by finally allowing unproductive, inefficient mills to shut down.

    In 2001, 12 firms accounted for 75% of U.S. hot-rolled steel production. In 2007, three firms accounted for more than 80% of hot-rolled steel production. The consolidation has afforded the steel industry an alternative to requesting bailouts in the face of declining demand.

    Following the steel industry's lead to an auto industry reckoning makes more sense - to the taxpayers, to the country, and ultimately to the auto industry - than another bailout.

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  36. Instead of giving these companies loans, and loan guarantees which will probably amount to just giving them the cash in the end because they'll eventually go bankrupt why not give them gov. contracts to build things like a government fleet of hybrid vehicles, public transit vehicles ect.?

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  37. ...natural gas trucks, bio-diesel vehicles, flex-fuel vehicles...

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  38. I guess on a larger scale then - assuming one is buying into the notion that they need saving by the taxpayer.

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  39. October Auto Sales: Toyota
    Associated Press 11.03.08

    TORRANCE, Calif. - Toyota Motor Corp. said Monday its sales in the U.S. plunged 23 percent in October, as the venerable Japanese automaker posted double-digit declines for almost every vehicle in the tough auto market.

    Toyota (nyse: TM - news - people )'s U.S. unit said sales fell to 152,101 vehicles from 197,592 in the same month a year earlier.

    The zero-percent financing deal that Toyota offered through the month was unable to halt the steep decline.

    Sales at its Lexus luxury division plummeted 35.2 percent, in a sign that wary consumers are shunning high-end items.

    Toyota's light truck sales continued to fall sharply in October. However, sales of its Sequoia was a rare bright spot, rising 20.8 percent to 1,829 units. It was one of three models to see an increase in sales during the month.

    So far this year, Toyota has sold 1.9 million units, compared with 2.2 million at this point last year.

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  40. A strong defense capability requires for me the will to respond instantly to threats, perhaps preemptively, declaration of war or not. Once committed, there's only one permissible outcome; total victory as it's been defined here before.

    I'd agree with no nation building, but find the 'no policing' doctrine too confining. I'd need to think on that.

    - linear

    The distinction is really arbitrary, but you are going to find out what 'no nation building' looks like in Iraq as we unload it.

    Boy, I can't wait for those editorials.

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  41. For example Trish, instead of plowing 25 Billion into these sick Auto makers you offer up a 15 billion contract to make Natural gas Buses and 10 billion contract to set up a Natural gas distribution system and provide the buses to Urban public transportation systems for free (or expand the the program and charge a reasonable rate for the buses).

    Anyway the idea is that instead of handing out cash you institute a public works program that actually improves the nation. Sorta like infrastructure investments. Krugman and others have noted that WWII was just a giant public works system which dragged US out of the great depression. We could do something similar without the population cull.

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  42. They'll probably descend into civil war trish but the status quo doesn't appear to be sustainable. Freedom, Liberty, it's up to them to decide.

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  43. Judgements on the success of six years of effort and the expediture of hundreds of billions of dollars will be drawn, and proclaimed, some truth to that.

    As an Islamic Federal Socialist Republic.

    Wonder how it'll turn out?

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  44. Niall Ferguson would probably argue that we should exercise the prerogatives of Empire - exploit the oil resources while applying top down nation building using a flotilla of our best and brightest dealt out with a strong military hand.

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  45. hmmm, the markets seem to be testing my projected market floor around DOW 7900. I hate to see them go to trish's predicted 6700 (if memory serves me right).

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  46. Krugman and others have noted that WWII was just a giant public works system which dragged US out of the great depression. We could do something similar without the population cull.

    Thu Nov 13, 01:09:00 PM EST

    Well, if that's the case (one that numberless econ professors have been peddling for at least a couple of generations) then I propose A REALLY BIG WAR. Something fucking awesome, like China. I would call this Carrying the Banner of Huge Public Works Over There, To Keep It Out of Here.

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  47. Wonder how that'll turn out?

    - Rat


    I can tell you where it's going to end up: In the shitter. Not much to be done about it now. The money's evaporating.

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  48. Biting off more than they wanted to chew has simply turned into biting off more than they can actually afford to chew.

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  49. The goal would be to do it without the killing, if at all possible dear trish.




    Mind you a cull of the herd, men aged 17 to 40 with some modern females thrown in, and all that spending would probably alleviate the jobless problem pretty quick.

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  50. hey, how about a single payer health care system? Now there is a place the government could throw billions of dollars!! Schools for doctors and nurses and techs and jobs jobs jobs fixing up Americans.

    Naw, much more fun shoveling truck loads of money to Wall Street and Detroit.

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  51. gotta keep those hedge fund managers in their Hampton vacation homes!!

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  52. The goal would be to do it without the killing, if at all possible dear trish.

    - ash

    That kind of sucks all the danger, excitement and medals out of it.

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  53. This comment has been removed by the author.

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  54. we could still have a parade...

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  55. Been sayin' that for three, four years now, ash.

    We just gotta have that Parade.

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  56. LOL, you have been, Rat, you have.

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  57. Those $100.00/hr assembly line jobs are "going away." Either, slowly, bit by bit, to Mexico, or Quick, by way of Bankruptcy Judge. But, They ARE going away.

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  58. If we are going to have a national health service, is this going to include affirmative action in heart surgeons? Because it does look like we will have some kind of national health system. Are we going to have quotas at the medical schools, or just let the tests say who is the most qualified?

    Most people might say--have said, really--that they are in favor of some kind of national health system because they see it as lowering their medical bills, but do they want affirmative action in the care givers?

    The old relationship between a man and his doctor might be going away.
    I'll miss it.

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  59. Even worse would be a national system of lawyers, which might be next on the agenda.

    If you have a dispute with American Express, you'd have to go try and get somebody from the national lawyer system, instead of the guy you relied on for decades.

    I'd don't like the sound of that.

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  60. Then when your national doctor mucked up, and killed you, your wife would have to go to the national lawyer syetem to try and get some redress, but he'd just tell you, nothing to be done, and, by the way, you owe everything your husband worked for all these years in estate taxes.

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  61. And, in charge of all this system would be---Ash!

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  62. Real progress is being made in medicine. There is so much progress going on, even Alzheimer's might be overcome. I'm all for it, but I don't know where it really leads. Does anybody really want immortality in the flesh?

    My old aching body doesn't.

    I'm a believer in the idea that to really, finally overcome the 'human condition' you have to die away from it. Finally, totally, as in Sparagmos where the meaning is, I think, finally getting rid of the past by tearing it all apart.

    A hard lesson.

    But, the dying light of today is the rising light of tomorrow.

    And, all will be well. As it always has been.

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  67. 酒店工作-台北酒店專業經紀人周刊報導:2020.11.17台北市警方近年積極查緝轄內涉毒酒店、旅社,雖今年3月酒店因疫情停業,但5月後又有酒店涉及毒品;警方經埋伏蒐證,10月再次派員突襲搜索,查獲毒品K他命、酒店上班8人酒店經紀持有、吸食毒品,詢後除依法送辦外,也結合第三方警政,對涉毒酒店處罰緩及命令停業處分,展現強勢執法作為。台北市警局表示,台北市為經濟活躍地區,夜生活型態繁複,警方為避免不肖業者以合法掩飾非法,自2018年起運用大數據資料,分析易涉毒品案件的酒店、夜店加強蒐證,2019年間將6間旅館、2間酒店等涉毒營業場所查緝到案、依法送辦。其中業者強逼女大學生酒店兼差吸毒逼迫還債,位於台北市林森北路289號大樓內的「元富」酒店也曾被蒐證列管,因今年3月新冠肺炎疫情爆發,停業2個月後,又傳出涉及藏有毒品,再次被警方盯上。警方指出,因不肖業者屢遭查緝,早已熟稔警方查緝作為,不僅設置許多監視器盯哨,加強過濾客人身分,還在出入口加裝難以破壞的「天地鎖」,強勢破門至少也需要花上20分鐘才能進入,時間足以讓店內人員想辦法銷贓滅證。警方經數月蒐證,10月21日凌晨6時許派出大批警力前往埋伏,雖知攻堅不易,仍準備好強勢破門「賭一把」;但正當要下令攻堅時,突然有店內人員要外出移車,現場員警見狀立刻衝入店內,當場查獲用剩的毒品K他命4公克、殘渣袋。警方當時將現場酒店打工30餘人帶返偵辦後,確認21歲賴姓少爺等8人涉嫌持有毒品,其中【酒店小姐】【酒店公關】有7人毒品尿檢呈陽性反應,詢後依涉毒品危害防制條例送辦。台北市政府也於11月12日依法處「元富」50萬元罰緩,命令停止營業1年6個月。據悉,此次查獲的「元富」酒店涉毒已不是第一次,其前身是在開設在錦州街上的「寶愛」酒店,因屢屢涉毒遭警查緝,業者為避風頭,移轉到林森北路289號大樓內,改名「永利」酒店經營,仍因涉毒被警方盯上,嚴加查辦。近兩年業者將酒店原地改名「元富」,卻重操舊業,同樣「毒」影幢幢。此次警方在疫情過後再次查緝該店,已將專案列管的涉毒營業場所全數掃蕩,中山區內今年毒品案件發生數也較3月酒店停業前下降28%,顯見有效防制「五木特區」及周邊毒品案發生。警方表示,2017年至2019年間,台北市警局查獲供毒藥頭數分別為752、832、894人,偵查成效逐年上升;今年1月至10月查獲848人,也較去年同期784人增加64人,查緝成效成長率為六都最高。警方強調,查緝毒品為警局重要執行政策,凡有涉及不法,均會全力查緝,呼籲市民及業者,發現不法應立即通報警方,警方將與市民共同防制毒品危害,將台北市打造為「無毒家園」,讓市民安居樂業。

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  68. 有女陪侍酒店11月16日解封營業,豈料因疫情停擺半年,公關小姐大多另謀出路,包括出國打疫苗陪酒、轉戰傳播、飯局妹或私人招待所,酒店大鬧「小姐荒」,到班率不到復業前的一半。為此台北市酒店業率先提高坐檯費來「搶小姐」,帶動全台酒店聯漲,幅度約1成。業者盼價格戰奏效,重回百花齊放的榮景。
    5月中旬新冠本土疫情爆發,全台酒店停業半年,復業後儘管上門尋歡要攜帶疫苗接種紀錄「小黃卡」,報復性消費酒客仍絡繹不絕;尷尬的是,店家普遍沒有足夠的陪侍小姐能接待。
    缺錢公關 轉戰傳播、酒店兼職飯局以北市中山區目前最大的一間禮服店來說,上周末有100名酒店上班公關上班,僅疫情前一半;另家高檔便服店,則酒店工作只有15人到班,只有之前的2成。張姓業者形容,他有18間包廂,晚上7時營業,預約酒客10分鐘就客滿了,但酒店應徵
    小姐根本不夠,只能說抱歉。
    業者分析指出,酒店公關家裡缺錢,哪能忍受半年沒收入,在經紀人牽線下,都往傳播酒店兼差、飯局跑,甚至出國陪酒。酒店業者因此提高檯費抽成,讓小姐重新考慮回酒店打工,但半個多月下來,仍不見成效。
    業者提高坐檯費 漲約1成
    抬高坐檯費,加上部分酒商以國際疫情導致貨運成本增高,調漲酒錢,反映在酒客身上,就是漲價約1成,原本1個小時消費1500元的酒店,漲到1680;2100元的高檔酒店,更是漲到2310。加上酒錢,一群人喝數小時,埋單動輒近10萬,早已非正常上班族能花得起。
    業者更不諱言,只要調漲,價格就回不去了。雖然北市酒店最多,衝擊最大,但全台都鬧小姐荒,這波調漲是全台聯漲。桃園酒店業者就說,台北市對酒店PT酒店小姐最有誘因,連北市都缺,其他地區怎可能不缺,一定跟著漲價留人。酒客只能大嘆:「油價都沒漲這麼快!」
    除小姐荒之外,北市原本與龍亨、巴塞隆納並稱3大高檔便服店的麗園酒店,酒店經紀受疫情影響,原本大股東不願經營,在上月並未申請復業,留下的包廂暫時租用給業幹做招待所。松江路一家陸客最愛的制服店,也和同集團其他店整併。
    業者說,目前觀察農曆年後疫情是否再起,否則不僅酒店小姐卻步,資金不夠雄厚的店家,可能也撐不下去,紛紛轉做招待所,有牌酒店版圖將大洗牌。

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