Well, kids, our U.S. Senators — having failed on a procedural vote 52 (40 Dem, 10 Rep, 2 Ind) to 35 to bail out the Big Three — now celebrate the season by giving us a much closer view of the Greater Depression. Unless Bush and Bernanke or Paulson do something fast, GM and probably Chrysler too will go bankrupt this month, with Ford not far behind. To the ten percent of American workers — around a million people — involved in car-building, Merry Christmas/Happy Hannukah/Joyous Kwanzaa/Ripsnorting Festivus! To all with whom they trade, Happy New Year!
Though by the end, the Dems and even the auto-workers’ union had agreed that the domestic industry’s wages should reach parity with those of foreign-owned, U.S.-sited plants, the deal-killer was timing. The U.A.W. (and the car companies themselves) held out for a deadline in 2011, Senate Republicans for 2009.
Keeping in mind David Leonhardt’s breakout of the real hourly-pay difference, two things I (also Kevin and Josh) just don’t get: why 18 months one way or the other in this deadline was so all-fired important to the GOPers — especially now — and why Harry Reid couldn’t handle a bunch of lame-duck naysayers. I know the auto executives deserve this, but the consequences won’t stop with them. Once again, hilzoy nails it:
[A]fter years of being willing to spend money on whatever George W. Bush and their lobbyist friends wanted, after supporting Duke Cunningham’s and Tom DeLay’s buddies in the style to which they had become accustomed, now they decide to prove that they care about fiscal responsibility. In the middle of the worst downturn in half a century. Thanks a million.
Here’s my favorite quote from the whole mess:
“”We simply cannot ask the American taxpayer to subsidize failure,” said Sen. McConnell.”
Whyever not? We pay his salary, don’t we?
Yes, and the GOP’s trademark lately being irresponsibility, don’t be looking to The Decider to pull this thing out.
But here’s what you can do: Slide into the Cherokee in Jackson around 7 tonight, and dammit, we’ll do some grade-A sorrow-drowning. See you there and/or all over Oxford tomorrow!
Have fun in Oxford this weekend, and do’nt worry about the economy. Mrs. Wooabby went Christmas shoping last night and will single handedly save it!
Someone stole her credit card and I refused to report it because they’re spending less money on it than she .
What time are cocktails? I’ll join you from here.
Thanks, woo!
Read Benen here and here (he’s got more research time than I do this morning — good stuff). Seeyabye!
You gotta understand that the auto loan/bailout is the first salvo in the union-led Employee Free Choice Act. There is some vote trading in play, and the union (northern) states are not willing to trade money for the right to organize without a secret ballot.
7:30 and after, woo
Aside from other major factors in this bailout, particularly irritating is the fight against environmental “restrictions” made by the Republicans. Though the lack of available credit is a large factor in the troubled auto industry, the sheer inferiority of product, and the resulting uncompetitiveness, looks to be the larger issue that has put us in this situation. Ironically, this inferiority stems from the same laughable CAFE standards and ineptitude within the EPA, among others, that the Republicans have held high as vital requirements for a strong automotive industry. Now, as we look to bail these companies out, these same Republicans are hoping to gut any progress made in fuel-economy standards and state law regulating emissions with the bill, the very things that might force these American companies into being viable and competitive within the industry.
I’m just waiting for the day I can purchase my Mississippi-made Prius.
The auto bailout of $14 billion is equal to only 2% of the amount made available for Wall St. If $14 billion saves 1 million auto jobs then using the same ratio of $14,000 per job,the $700 billion should save 50 million Wall Street jobs. Something doesn’t add up here. Additionally, the call for reduced worker wages was not heard when the banks and investment houses were helped. That would have cut into political donations, no doubt.
“I’m just waiting for the day I can purchase my Mississippi-made Prius.”
I Roger that. The last “innovative” products Detroit produced were 8-track tape decks and vinyl roof covers. It’s hard to believe the American auto industry could be so brain dead, but we have proof-positive.
Look at a few of the developments the European and Japanese industries brought to the automobile world that we now take for granted: ABS braking, electronic traction control, electronic stability control, full-time all-wheel drive, 3-point safety belts, supplemental restraint systems, airbags, crumple-zone engineering, hybrid motor/engine systems (we have one in our Highlander), safety gas tanks (remember the Pinto?—Ford’s answer to the Bic disposable cigarette lighter), cleaner-burning engine systems, dramatically reduced exhaust emissions, better fuel economy. . . .
Detroit quit thinking around 1973, it seems to me. Bring on the new Priuses.
Amen.
You may not have Mississippi built Priuses if the auto bailout does not occur. Ford is not insolvent, but is on Capitol Hill because it knows that the United States automotive industry, including foreign automakers, is very intertwined and the loss of GM and Chrysler would take the entire industry down. Note the sharp drop in the Nikkei upon news of the auto bailout falling through.
“Voluntary” quotas on auto exports from Japan, in order to avoid more formal protectionist U.S. policies, forced Japanese automakers to build bigger and better cars and to build plants in the U.S.
http://internationalecon.com/Trade/Tch10/T10-3A.php
“Since the quantity of auto trade between Japan and the US was limited but the value of trade was not, Japanese automakers began upgrading the quality of their exports to raise their profitability. By the late 1980s, new higher-quality auto lines such as Acura, Infiniti, and Lexus made their debut. Alternatively, Japanese autos assembled in the US were not counted as part of the export restriction – only complete autos exported from Japan were restricted. Thus, after the VERs were implemented, Honda, Mazda, Toyota, Mitsubishi, and Nissan all opened assembly plants in the US.”
Commentor @ 9: OK … I’ll buy one made in Japan.
Researcher @ 10: Here’s a link that sheds a bit of light on the subject:
http://www.cnn.com/2008/US/12/12/american.cars/index.html
If the US automakers go down they take with them the political pressure on foreign automakers to assemble in the U.S.
Don’t imagine that the Japanese would assemble as many cars in the U.S. if the threat of protectionist retaliation went away.
Also, as the article in Ben’s link says,
“The key difference in how the Big Three and foreign brands support jobs in the U.S. comes outside the factories, according to a 2006 study by the Level Field Institute, a group formed by Big Three retirees in Washington.
“‘What’s driving the difference in jobs … is investment in research, design, engineering and management,’ Level Field President Jim Doyle said in a statement on the 2006 study.
“The Center for Automotive Research said the Big Three had 24,000 engineers on U.S. payrolls in 2007. The Japan Automobile Manufacturers Association said its member companies had 3,500 U.S. research and development employees in 2007.
Level Field found that every 1,000 vehicles sold by Detroit’s Big Three in the U.S. support more than twice as many jobs as 1,000 vehicles sold by foreign nameplates.”
“”We simply cannot ask the American taxpayer to subsidize failure,” said Sen. McConnell.”
It seems more like rewarding greed than failure. But it depends which side of the fence your on.
Well … I guess we’re just not smart enough to be in the car making bidness. That’s OK … we still control the whisky-making bidness.