On the Fly: The Auto Industry Hearings

These are the notes I took of the Banking Committees meeting with The heads of the Big three automakers on Tuesday afternoon and evening.

According to the testimony of Sen. Debbie Stabenow of Michigan:

Toyota asked for 56 billion dollars from Great Britain. No talk of if the loan was granted.

The Army depends on a Chrysler engine for power generation in several vehicles. A marine general was quoted as saying the failure of the auto industry could affect the armies ability to operate.

Losses have been across the board in all auto companies. Toyota sales have dropped, as has Hyundai, in numbers, by percentage, comparable to the losses of the American automakers. Korea gave us 700,000 cars last year, we sold them less than 7,000. There are many factors that have made the mess that the auto industry is in.

Failure and bankruptcy is not an option. Even if bankruptcy hits one of the big three, it could cost as much as 2 million jobs. Bankruptcy would cost Americans total 276 billion dollars in revenue, and cost the government an additional 110 billion dollars. Bankruptcy would help through restructuring, they say, but Detroit has been trying to, and it has not worked. They have done all they can. The UAW has cut wages for new employees by 50%. Name one other industry where that has happened.

Labor costs have been cut by 50% at GM. There has already been restructuring. Bankruptcy could well cost millions of people their jobs.

We need to make sure that these companies stay afloat. We have a dependence on foreign oil. I think everyone would agree with that. Do you want to add to that a dependence on foreign manufacturing, for both our personal vehicles, and our military vehicles? That is the price we would pay if we let the big three go bankrupt, and if one goes, the other may well follow.

Ron Gettelfinger, UAW Union President: The UAW, in mid contract has cut out pay increases to help make the industry more competitive. And have cut out cost increases in their contract to help the industry. GM has already lost 47 thousand union jobs in the last 3 years to help be competitive.

Alan Mulally, President of Ford: 51,000 jobs already cut at Ford. Ford has increased production of hybrid vehicles, and is putting out a few new cars that more than compete with the Japanese hybrids. Production has been cut, raises and bonuses have been cut, jobs have been cut. Ford would be hurt by any other of it’s competitors failing. They are interdependent on the other two members of the big three.

Robert Nardelli, Chrysler Chairman: Chrysler has liquidity issues, but says it is part and parcel an issue based on the entire economy. Bankruptcy will cause sales to plummet. When the company told customers it would divest some portion of the company(unnamed), sales dropped by 37%. The industry has no confidence that it will survive through bankruptcy. Cerberus, Chrysler’s owner, will forgo taking any profit that it makes from the bridge loan it gets. Chrysler has dropped it’s fixed costs by over 2 billion dollars, and have cut over 37,000 jobs.

Each company has claimed it has big vehicles out there in the next few years, and Chrysler is no different. They have two new ones coming out in the next two years.

Richard Wagoner, GM Chairman: Gm employees 96000 people, and there are well over 100000 other people who work in ancillary companies. there are 750000 people who have invested in the company. Fixed costs have been cut by 9 billion dollars, and will cut labor costs by 2/3 by the time 2011 comes around. GM has addressed as well as they could the future of the industry, as they see it. Money is being cut across the board as it has been with the other of the big three companies.

GM does not agree that the issue is their long term strategy, it is the credit crisis. Without the credit crisis, they claim they would be fine. They are doing everything they can. The cost of letting the auto industry fail would cost significantly more than the 25 billion that they ask for now.

Pete Morici, the University of Maryland Economist on the panel that is against this loan. He claims that the industry has fallen victim to foreign protectionism. The Costs are not as low as they are in Japan. He thinks that if we give the 25 billion, they will be back and ask for more later. Toyota and GM make the same amount of vehicles, but it costs gm more to make them, so they make less money, so they then have less money coming back.

Wagoner: If They go out of business, suppliers would go out of business, bankrupt, with millions affected. State and local governments would be affected by bankruptcy as well.

Nardelli: Of it’s top 100 suppliers, 96 they have in common with the other two of the big three, they would be hurt by any one of the big three going under. Financial companies would be at risk if any of these companies get liquidated.

Gettelfinger: If one of the big three goes belly up, it will may well take the other two with them.

A question was asked about what mistakes were made. Nardelli says they found 4 cars that were being made for Europe that were being sold here. They immediately stopped making them. They said that the customer wanted the bigger gas guzzler, and simply gave them what they wanted, instead of being more adaptive, and finding what they needed and that is why they had issues. Wagoner says credit was a real issue, as was the structure of GM itself, but they have moved to make changes there. Sales of gas guzzlers hurt them. He seemed less than up front with saying it was GMAC’s fault, but understands that there was a Culture that let these issues pop up. Ford did not offer easy credit, but Wagoner said the low Interest rate and other factors added to the making it easy to get the big gas guzzler.

And all of this before the major grilling by the Banking committee took place. Time for a little commentary on what has transpired here.

If the numbers each of these companies have given is accurate, and there have been as many cuts in workforce as they say, with over 135,000 jobs cut out in the last 3 years, there isn’t going to be all that much fat to cut. Production has been cut, much has been done to make sure that these companies stay healthy. But with credit just not being there for them, that has hurt them significantly. If the credit crisis did not exist right now, these three industries would be fine, or so it seems. But the credit crisis is here, it is real, and it is crippling the auto giants, and making them less competitive.

The most pertinent question is, how realistic is the need to give 25 billion dollars to all three? Should there not be a way to target more precisely the needs of each one of them individually? I thought it was the best way to go to give them this loan initially, but now I am not entirely sure. If these companies can be saved with specific individual loans when they are actually needed, rather than a large loan to all three at once, why wasn’t this kind of idea floated? But the legislation is already on the floor of the senate. There is no way to change that. I will have to look at the proposed legislation under a microscope and see what exactly it says.

If I have enough time to go through all the legislation and report on it here, I will.

How realistic do you think is the need for a large blanket loan to save the entire industry? How would you handle this particular issue? Would you give them the money? Are they pushing this thing through too quickly? Drop me a Line and Let me know!

Uncle Mikey

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There are voices in the senate and the house that are raising concerns about saving what at least one member of congress has called a Dinosaur, the auto industry, and saying that infusing cash into the system will merely be giving that dinosaur whose day of reckoning is near a few months of life, merely postponing the inevitable. Now, I do not have a problem with calling the industry a dinosaur whose time has come, but to not make the attempt to keep the millions affected by it’s possible collapse, when we have already throw hundreds of billions to save the drowning dinosaur that is financial markets, why not throw 3% of the total amount earmarked to save the wall street dinosaur and save the automotive one?

There is still $410,000,000,000 left in the bailou…err rescue package. Using a mere 6% of that total, you can keep several large contributors in our economy afloat, and all the businesses that depend on or work with the big 3 automakers will be kept going. More on the ripple effect in a few. This bailou…err, rescue package money was meant, on the face of it, to help the financial markets, but in a broader sense, it was meant to help save us from the economic excesses that got us in trouble in the first place. In this instance, Original Intent is trumped by necessity. The areas that the auto industry inhabits would be devastated. You opponents of aid to the auto industry would turn large tracts of America into Ghost towns for your own petty political wants.

It should not surprise anyone that the Senator who made the statement in question, the “Dinosaur” comment, Senator Shelby from Alabama, has several thriving foreign auto makers building cars in his state, Namely Mercedes Benz, Honda and Hyundai. A healthy and robust GM, Ford and Chrysler in Detroit would create more competition for market share, and take a share of Honda and Hyundai’s sales from them. And Sen. Shelby would prefer those jobs stay in his district, so why not stifle competition by cutting off relief to help Detroit?

How much good would you be doing if you left this industry to die, to be liquidated, how many jobs does America lose, at a time it can ill afford to lose them? With Job Losses mounting, opponents of assistance seem to be saying that a few million extra unemployed in America, on top of the losses that have happened, and others that are expected to happen are fine by them. Do they really want to add millions more to that number? Are they TRYING to kill America and American Business?

I can hear the next argument coming. It is socialism to do this. Bankrolling Big Business is tantamount to creating Government run industry, and didn’t we fight and defeat communism? Yes we did, but that matters not one iota here.

Face facts, ladies and gentlemen, we aren’t the 100% free market economy that you think we are. That is a fiction, plain and simple, but we aren’t socialists either. When things are going great it’s winner take all, but as the past actions of the federal reserve, the treasury, and the current administration have shown, we are NOT a free market nation when the chips are down. We are protectionists, not socialists. When it comes down to it, we have as a fallback position, the use of public funds when the well of private funds dry up or freeze. This is not socialist, this is internal protectionism, plain and simple.

Back to the Legislation itself.

The plan here is pretty simple. Take a (relatively) small amount of the Tarp Funds, to help save an industry that has helped shape the face of America for over a century. This industry affects millions of jobs, and has a large effect on the economy, we need to something, and Banking Committee Chairman Chris Dodd thinks this is the best way to save this “dinosaur” and make it relevant again. Yes bad business practices have made the industry falter. Yes oil prices have negatively affected car sales, and they were down even before that. That is no reason to let the industry go the way of the dodo.

There is an alternate legislative direction that can be taken. There is $25,000,000,000 out there, that is earmarked for creating more fuel efficient cars. That money could be funneled to help out the auto industry. I don’t have a problem with this solution, the Bush Administration solution, but this should, to my mind, only be considered if it is certain that the Tarp funds re-allocation will not pass and reach the people in the industry who really need it. We do need more fuel efficient cars, but we need the auto industry in good enough shape to build them before we worry about that. At this point it’s any port in a storm, and if That’s the road we have to take, we take it. It is clearly the second best road to travel, but any road is better than letting the industry rot and die due to mismanagement from within and lack of forethought from without.

Supporters of the Automotive bailout package have even offered to make the package smaller to make it more palatable to those whom they are depending for help.

We “helped” Aig. We “helped” Fannie Mae and Freddie Mac. We “helped” wall street. The least we can do is offer that same “help”, in that same spirit, to the auto industry. Millions of Americans are depending on it. Leaving the Industry to die would be proof that government is more interested it’s friends in The financial industry than in “We The People”.

Don’t let The Auto Industry fail.

That’s my two cents. What do you think America? Do you think it makes sense to save Detroit, or do you think it hurts America to make this bailout happen? Drop me a line and let me know!

Uncle Mikey

You may notice a few changes around here as time goes on. Since this is election-coverage.com, and the election is over, it makes sense to me that I move in a different direction. And in that spirit I will go to covering the government in general, be it legislation, supreme court rulings, executive decisions, and news-worthy events that are either affected by, or have an effect on our democracy and it’s governance.

Another thing you may notice is that the regular 5:30 am postings are going to alter a little bit. The constraints of a regular 5:30am posting, with my schedule as it currently exists is a bit much. I will be posting later in the day, and will in all likelihood not post as frequently as I have in past. I may, in lieu of just regular news also post some pieces on political philosophy…I am sure you noticed something of that bent in my character anyway, and I am going to give it more voice. This will make for, I think anyway, longer pieces. I hope my regular readers don’t mind these changes too much.

In that spirit, I am going to go off on a tangent here for a bit. I am going to talk about something near and dear to a great many people, liberals, conservatives, and myself as well. Being a left leaning libertarian, I find the concept of Small government a truly beautiful one, but utterly impossible in this day and age, and i will show you why.

Government, to my mind, is something that should be small enough to not be overly obtrusive, yet strong enough to protect the public from the predations of an unscrupulous world preying upon the people. I am not a true minarchist, a true government minimalist, because I do in fact think that there are things that the government should do for the betterment of the citizens.

But what is a (by and large) Pro-Small government believer to do in this day and age? The fact that our Government is perhaps the largest single employer in The United States, should tell you about what our government believes about “Small Government” Almost 20 million people work in government agencies on one level or another. That is HUGE. To shrink a bureaucracy that large without seriously damaging the economy is to my mind impossible. This is going with the latest figures i can get my hands on, from 2006.

The Numbers themselves are of only slight interest. The government actually employed more people in 2001 than it does now, but it seems the cuts were on the local level, not state or federal. There was no drop in that period for federal or state employees. The numbers were, at that point, approximately 20.9 million total employees. With the exception of those local losses in 2001, and overall that paring down was relatively small, there has been no paring down in any way of the size of government, employee/infrastructure wise, since WWII. In fact it has more than tripled in size since WWII.

But I digress. Numbers themselves are not the point, though they do work effectively to illustrate a point. Numbers almost always skew up, not down. And that makes sense, seeing how a growing population will have greater need of existing programs and government agencies, due simply to increased population, and government, needing to keep up with demand, would, by necessity, need to increase in size to meet demand.

Which brings up a question. What exactly is the need for existing government agencies and programs? Are there not programs that we could do away with? “HELL YEAH!!!” I hear you say. And I would throw a few programs out that would meet my personal idea of what is wrong with government, and I could name several, but i will not….not today anyway. I will argue here that there is no way to just cut a program out without cutting thousands of people from all walks of life deeply and making their lives more difficult, and in some cases unlivable. And what of those employed in the food stamp program? How many jobs would be lost? How much damage to the economy, both on a local and national level?

Sure, cutting programs would minimize the size of government, and reduce the amount of annual expenditure on government, but I must ask you, at what price? Yes cutting (to pick one program at random) Food stamps would no doubt cut billions of dollars in government expenditure, and no doubt force those who cheat the system to find an honest way of getting by, but for every cheat burned by cutting this, how many single mothers do you burn as well? How many widows living on a pension that wasn’t large enough to make ends meet when the “breadwinner” was still alive. For every bad person you burn, you burn 20 people who are simply down on their luck and who have need of such help.

Now I know that, in the view of some, government is not in the business of charity. But I would point to the preamble of the constitution. Do the words “Promote the General Welfare” mean nothing? What do you think they meant by “Insure Domestic Tranquility”? Do you think they gave themselves the power to tax so they could prop themselves up? No. It was meant for the good of the people. All the people, as delineated in the Constitution. And the size of the government is a direct result of the interpretation of these and other concepts within the documents put forth by our founding fathers.

True, their is in no place within any of our great documents which say government must insure the health and well-being of all it’s citizens except in the spirit of it, as I previously mentioned. But should the government be heartless? How long would those voted in to lead us last in office if they were? They like their jobs and know it is a popularity contest, and will not fight the will of the people unless they know that can win. And I don’t think they can win a fight like this, and by their actions, neither do they.

As much as it pains me to say it, there is no way that I can see that a major and effective paring down of the government can happen in this day and age. The needs of the people, mixed with the will of the government to help those in need, to be humane, while keeping themselves in their jobs, has brought together a toxic, yet necessary largess to government.

If you want smaller government, you will have to legislate it in. You could try to pass laws forcing the government to keep to a particular size and strength, or outlawing some particular type of entitlement, or all of them, but I am not sure you would get any legislator to pass it. Every program you cut would kill of thousands off jobs, and further damage an already damaged economy. The only way I can see to do it is to have a constitutional convention, as stated in article five of the constitution. This is something that could be a remedy to this particular situation, but only if enough dreamers like myself and other minarchist-types who have been set adrift in a sea of large government would populate the convention.

Good luck with that. I would like to see it, but I won’t hold my breath.

I’ll See you all on Monday. Tell me what you think of the changes. Tell me what you think about the size and effectiveness of our government. What would you change? Cut out? Leave in, and maybe even grow? Drop me a line and let me know, America!

Uncle Mikey

Why, You of Course! I’m sorry, I should not give away the ending like that, but since you knew the answer before I told you what money I was talking about, I decided to not beat around the Bush/Cheney.

There seems to be no end in site for America’s financial woes. Since last Friday, two banks, including one run by the man who created the Mortgage backed security (there IS justice, see?!) have been bought out by the FDIC, and Circuit city has gone belly up, declaring bankruptcy, and there is much talk of General Motors going the same route. The banks were the 18th and 19th to need such a buyout by the FDIC this year. AIG has needed an additional infusion of cash, above and beyond what was needed initially, due to having to pay off credit default swaps, which ate up most of the money they were initially handed by the Feds.

We the people signed off on one stimulus package to stimulate the economy, to no avail. We the people, signed off on a $700,000,000,000 bailou…err rescue package, and the economy has seen almost no real benefit. In Fact the economy seems to have worsened since this Forced “generosity” of the public was brought to the fore. And now not only is the fed not telling us about an additional 2 trillion dollars in funds that has been handed out, but there is talk of a second stimulus package, and another bailou…err rescue package, this one for the Automotive industry.

One wonders exactly how much affect the countermeasures are having or can really have.

This is how it looks from this writer’s perch. I’m not sure that anything they do will fix the economy as a whole, even if they manage to catch pieces of it as it falls apart. They saved AIG, it was “Too Big to Fail”. Nice, there goes $150,000,000,000. I do not know how much it would have cost to simply let it fail, and let the market pick up the pieces, but i cannot picture it costing much more than that. I would not mind talking to a financial expert or two about this subject here, the more minds weighing in on this the better. The Jobs saved were important, but where was the fed when Lehman went belly up? And what help can over 1,000,000 people who lost jobs get?

The Stock prices on everything are getting positively KILLED, and the bailou…err, rescue plan hasn’t helped, no stimulus plan will make that better anytime soon. The volatility is only amplified by governmental interference, because the market sees that the government, despite it’s best efforts, is just not knowledgeable enough here to do any real good. Sure, they’ll take the money, wouldn’t you if someone offered you a free bank vault full of cash? Why do you think American Express decided to become a bank? It’s because of the FREE MONEY, that’s why!

If the government had only played a more limited role here, i think things would be less volatile now.

What we need is a small but consistent governmental role in this economic crisis. Save GM, like you saved AIG, because 2,000,000 jobs lost and millions of pensions up in smoke if GM goes the way of the dodo would be too large a strain on an already weakened economy. But AIG doesn’t need all the extra cash free and clear from us. The one variable no one thinks of is the strain on the General Public.

If AIG is too big to fail, What about the United States of America? Aren’t we “To Big to Fail” too? Who’s gonna Bail Us out? Who’s going to rescue us? China? The Republicans? The Democrats? Can our government help us, and do they really know what they are doing?

Tell me what you think America! Is the government making things worse through sheer mismanagement? Do they have a clue? Is Big business taking advantage of us? Drop me a line and tell me what you think!

Uncle Mikey

This is the Question du Jour in the days after the Election Of Barack Obama as our next President. There are a few names that are bouncing around, and since this person, whoever it is, will be guiding our fiscal ship through some really choppy waters, I think we all need to take a close look at the possibilities for this post closely.

The First name I heard for Treasury Secretary I heard only a few hours after I watched Barack Obama win the Presidency. He is current New Jersey Governor, Former senator and CEO of Goldman Sachs Jon Corzine. Corzine has been something of a free spender in his political campaigns, is a liberal democrat who saved Goldman Sachs after it nearly collapsed in 1994 Later in Corzine’s tenure as CEO of Goldman he was asked to help compose a rescue package Long Term Capital Management, a large hedge fund that nearly collapsed in the fall of 1998. When he decided to help this company, which the Treasury department had decided was too big to fail (sound familiar?) He was replaced at the head of Goldman, leadership at the firm was actually seized from him by…. Hank Paulson.

Small World. He has in past served on the U.S. Treasury department borrowing committee as well.

The Next Big Name on the List is award winning economist Larry Summers. Larry has actually had the Job before, from July 1999, to Jan, 2001, the final Treasury Secretary of the Clinton Administration. He has also been the World Bank’s Chief Economist. Summers is on record as saying that he thinks the Economy will get back on track by late 2009, but it won’t be in any way near as good a shape as it was when he was Treasury Secretary. Much of what Mister Summers has said is in line with the beliefs and stated goals of President-Elect Barack Obama.

One other name to look at is Timothy Geithner, The Current President of the Federal Reserve Bank of New York. He has served with both Robert Rubin and Larry Summers, and has also worked as Director of the Policy Development and Review Department in the international monetary fund. Rather than give you a biography of the man, I think it best to just let you read about him yourself right here.

Since this may be the most important position the President-Elect will have to fill, it is important for us to know something about them. Do you think these men can do the job that is necessary to fix the economy and set the right policies in place to make that easier? Tell me what you think about our financial future in an Obama Administration with any of these men at the helm of the Treasury, America! Drop me a line and talk to me!

Uncle Mikey

What are the Priorities of the next administration? Money, Money, Money.

First, President-Elect Obama should pare down the debt and balance the budget while keeping the promises he made on the campaign trail. This will Involve a few things. He has to make sure that the tax breaks for the the middle and working classes that he said he would put through go through. He has to make sure as well that the other end of that, the Tax increases for the rich goes through as well.

Balancing the Budget may, insofar as getting America out of debt, be impossible. You can’t just cut out $10,000,000,000,000 in debt in one fell swoop, but with a little belt tightening and cutting out some poorly put together programs we can pare down the debt over time and put the nation on a more stable financial footing. There are tens of billions of dollars we can save by simply streamlining some programs, like medicare.

Increase in Capital gains taxes will also have to occur, and the IRS should disallow deferment of Capital gains taxes, from 1031 exchanges to structured sales. I do not, it must be told, know enough about the tax code to know how this would work exactly, but the need to build up the amount of money the government takes in is as large as the need to pare down the size of government, and every revenue stream that could provide funds should be looked at seriously.

Next up, National Security and money:

A Combination of things have to occur, simultaneously. The Increase of force strength in Afghanistan, while bringing the forces in Iraq home. We will save money when we start bringing the troops home from Iraq, and the faster we kill off al-qaeda the better for all of us in both the short and long run. We also need to decrease defense spending. That much is absolutely necessary.

I know, there are plenty of people who saw that and flipped out. But it is necessary. This nation has seen it’s defense spending go up by 75% over the last 7 years, and frankly it is the single largest drain on funds in America. The Defense Budget is now larger than at any time, ever. Not even when America was at the height of the cold war were we spending as much as we are now, and it is just too damned much. Half a trillion dollars for Fiscal 2009 is far too much. That is what Dubya has saddled us with. More in any measurable way than even LBJ, who was a big spender, the biggest spender in the last 45 years than any president EXCEPT Dubya.

Oh, yeah, we have to CLOSE THE ENRON LOOPHOLE. President-Elect Obama has proposed the repeal of this loophole, to curb speculation when Oil prices spiked earlier this year.

What do you think P.E. Obama should do? Do you think the economy will stabilize? Do you think anyone can balance the budget? Drop me a Line and let me know America!

Uncle Mikey

    Man of the Hour, tower of power, or so the media seems to think.  This race is going to end a lot closer, I think, than most people do, but I see this man pulling this victory out.  How?

       First off, The Polling just seems a bit… well… off.  I am a democrat, so i don’t have an issue with the democratic parties candidate pulling off a big win, but I just do not see, with the fractious nature of the campaign, this being anything but a hotly contested race.  And when you see poll numbers that are as disparate as they are, with Battleground having Obama with a 3 point lead, and CBS/NYT having him up by 13, there is no way to get a really coherent fix on exactly where the electorate stands….

     …With one clear exception.  The Economy.  John McCain has clearly made a mess of the biggest issue in politics today, and the Obama campaign has successfully made the label “Weak” to his economic policies, and John McCain has hurt himself in this regard.  From his admission that he doesn’t really understand economics early in the year, to his statement the day the Market Imploded that the “Fundamentals of the economy are strong”, he has painted the picture of himself as entirely hapless on this front.

      This Economic weakness, both in the economy and in John McCain, has left  the Junior Senator from Illinois finding footholds in states normally considered Republican territory.  Ohio, which has only twice in 30 years vote for a democratic President, is leaning towards Obama.  Colorado which has voted only Once in 40 years with the Dems, looks like it may well go Democratic this time around.  Florida, which has gone Dem only two times during my life, which began when dinosaurs roamed the earth, looks like it is inching towards the Democratic side of the ticket.

     There are a myriad of scenarios out there that would lead to an Obama electoral victory, but I think the most plausible is one where most, but not all of the states I just mentioned go Blue as well as the normally reliable Democratic Voting states.  The States I think Obama will win are as follows.

    Hawaii, California, Washington, Oregon, Colorado, New Mexico, Minnesota, Iowa, Wisconsin, Illinois, Michigan, Ohio, Virginia, Maryland, Pennsylvania, Delaware, The District of Columbia, New York, New Jersey, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire and Maine.

    And that would be a win 293-245 victory for The Obama-Biden Ticket. I am being generous here I think, but I believe this can happen, given current circumstances.

     What do you Think, America?  Think The Obama campaign has what it takes to make this scenario, or something similar, happen?  Think Ohio will Go Blue?  Missouri? Drop me a your idea of what’ll happen Next Tuesday! 

       Uncle Mikey

One piece of news to share with you this day.

As I write this piece, The Senate has just passed the “Financial Markets Bill” 74-25. It is not a surprise that the bill passed by more than the Prerequisite 60 votes. I was a little surprised at one vote in particular, but only one. The vote of The Junior Senator from North Dakota, someone who I’ve seen talk on the senate floor seemingly backing the bill, I have heard this man wax poetic for a number of days about the need for voted no. Find out how your senator voted here. Only one senator did not vote on the bill, and he had good reason. Sen.Ted Kennedy (D) Massachusetts, was unavailable because he is still out because he is being treated for brain cancer. Those on the far right and some on the far left, most notably Jon Tester and Russ Feingold, voted against. Otherwise this bill had a solid majority, including both Presidential candidates and V.P. candidate Joseph Biden. I don’t believe mister Biden gave a speech on the floor, and I know that Sen. McCain didn’t, but Senator Obama was one of a flood of Senators who spoke on the passage of this bill. He said it was regrettable but necessary to pass this bill.

For those interested, there were only a few states that had both senators vote against the bill. In alphabetical order they were: Alabama, Kansas, Louisiana, Mississippi, and Wyoming. Is there any surprise that all these states are solidly red? Not for me. If I remember correctly, the bulk of southern and Midwestern republicans in the house voted against this bill as well. I’m wondering how much of that will play out on Friday. Whatever the case, the bill, with added candy in it, including the FDIC insurance limits increase from $100,000 to $250,000, and the rollback of the Alternative Minimum Tax, should (hopefully) have an easier time passing the house when the vote is pushed through sometime Friday afternoon.

With the exception of those few pieces of candy, the bill going back to the House is the same bill that they voted down a few days ago. Hope Nancy Pelosi is, as Barney Frank put it after the first bill fell through “Uncharacteristically nice” to the house republicans. But the word I’m hearing is that there is, because of the bells and whistles added in the Senate, more support from the republican side. The only issue there is that the support on the republican side may come at the expense of the “Rank and File” democrats. What I have heard is that there are a number of democrats who voted for this bill the first time who are unhappy with the tax breaks added by the senate to ameliorate the house republicans. Let’s just hope that enough democrats stay on board to keep this bill afloat.

Personally I hope Nancy Pelosi gives the same speech on the floor of the house on Friday before the vote as she did prior to Monday’s vote. I just want to see how many republicans and angry democrats use it as an excuse to vote against the measure.

Hopefully, whatever theatrics happen in the House Friday, the bill passes, I care not by how many votes.

A video before I end this: Robert Reich talking about Henry Paulson, Ben Bernanke, Banks, and Trust at the World Affairs Center. 6 minutes in length.

That’s It for me. I’ll have a little something for everyone tomorrow. Debates, Polls, and the joys (or something) of Poverty.

Any Comments? Drop me a line!

Uncle Mikey

(Sung to the tune “wipe-out”) HAHAHAHAHAHAHAHA! FAILOUT! No bailout for America. In a move that seemed more trying to save their skins instead of America, the house voted down the $700,000,000,000 bailout resolution. 95 Democrats Voted No. 133 Republicans voted no. I find this absolutely stunning, i’ll get into that in a minute. But what’s more stunning is the simple fact that in response, the Markets lost more than the proposed bailout was for in total. $1,000,000,000,000 lost in one day, 777 points. LET THE FINGERPOINTING BEGIN!

….predictably the republicans blamed the democrats and the democrats blamed the republicans. In a press conference after the vote failed, Nancy Pelosi was blamed for giving a partisan speech just before the vote. This seems a bit of legerdemain, seeing as how there isn’t a day that goes by that there isn’t a partisan speech on the floor of the house before voting. Here is a case where the every Republican who buys into this stupidity gets saddled with the nickname I’ve given to John Boehner. I call him “The Complainer”, because he’s always botching about something, a whiny little thing, he is. Complainers all. The best part about this is that Boehner spoke out at the press conference afterwards blaming democrats and speaking against the bill, even though he voted for passage of the bill!

Oh and to BLAME Nancy Pelosi for this is something that I think works in her favor, because NO ONE in America really wants this damned thing, and If that speech made it possible, it may just bolster the public’s viewpoint of the congresswoman in some people’s eyes, in a backwards and roundabout way.

For your Viewing pleasure, the final vote results for HR. 674 AKA. The Bailout

The Democrats were no less blame filled, casting partisan aspersions at the republicans for not holding up their end of the bargain. The Democrats say they were planning on delivering at least 130 vote on the floor and asked the Republicans to deliver the rest, to make it a truly Bipartisan bill. The dems in fact delivered 140, but, as previously noted, the Republicans only put up 65. The Republicans were chided for not ponying up and putting their fair share.

To be honest there is lots of anger at this bill and a view in this country that the people who made the mess aren’t being asked to clean it up. And I have to be honest, I agree, but I also think there isn’t much of a choice here. You all saw what happened today after the news came through. The markets froze up, everybody panicked. I heard that the people who didn’t like this bill thought there were serious issues with it. That the Dems who didn’t vote for it thought Henry Paulson got too much authority and that there was not enough oversight, and the Republicans thought the entire thing was just a pile of crap. But all these issues are fixable, all of them.

So….Who do you blame for this? For the Fail-out and the mess itself. One word Answer.

You.

That’s right, YOU. YOU, Mortgage Industry, made these insane loan offers that were too good to pass up. YOU, Investment Banking industry, created mortgage backed securities based on loans that you KNEW were flawed. YOU, The average American, for buying into this manure, and listening and buying it because it looked too good to be true, a steal of a deal. But look at it now. Who got robbed here, and who did the robbing? You know the saying about stuff that looks too good to be true. You got the No doc Mortgage because you thought the American dream meant having that home, and the price on that mortgage was high but, so what, the rates are low, and they’ll stay that way, right?….

WRONG.

You knew they were greedy swindlers but you bought into it anyway. Here’s a question. Do you buy stupid crap that people sell at 3 a.m. in those infomercials? No, or you shouldn’t if you do. Why? YOU DON’T NEED IT. Think about it, how much did you NEED that house that cost all that money and in the end put you out on the street because it costs too much to pay for? Thinking about it now, would you do it again? NO. <—-do you see that word? THAT’S what you’re supposed to say when that offer that’s too good to pass up comes to your door. But you said the wrong thing.

You said YES. And because you couldn’t control yourself, America, we all have to pay for it. Thanks.

You said yes when sense and your paycheck told you no. And now we ALL have to pay for YOUR mistake. Hell, I live in a one bedroom apartment and I’m pretty happy here. I could have bought a place, but I didn’t. Didn’t seem the prudent thing to do. Wanna know why? It’s a thing which America seems sorely lacking in these days.

Discipline.

That’s what you’re going to need now America, by the bucketful, because this mess is only going to get worse.

The only thing about the Candidates I’m gonna add here is that Sen. Obama said this is just congress being congress, while Sen. McCain said this is the fault of the Democrats and Barack Obama injecting Politics into this.

In those two statements, tell me, Who injected politics?

One Final Point. I watched a news conference held somewhere on the lawn of the White House held by Henry Paulson. The man looked scared, nervous, and almost at the breaking point. I have never liked the man before, but I tell you, I actually feel sympathy for the man now. It’s as if the entire financial mess is landing squarely on his shoulders, and it looks like he’s about to break. Good Luck Henry, with this bunch, you’re gonna need it.

Wanna rant and rave and rail about this? Drop me a line!

Uncle Mikey

This is a long one, and the first of three installments.

The beginning of the debate was quite cordial, both men shook hands prior to going to the dais to speak. The first question asked, after a short quote of former President Eisenhower by Jim Lehrer was “Where do you stand on the economic recovery plan?”

Barack Obama spoke first. He called this a defining moment in history and then launched into his four point plan: Oversight, potential of making money on this expenditure, no golden parachutes, and help for the homeowners involved and not just the companies affected. He Also interjected that this crisis is a “final verdict” on eight years of failed economic policies, and tied John McCain to George Bush.

John McCain then spoke. He said he wasn’t feeling good about things but that things were looking up because Republicans and Democrats were working together to fix the crisis. He said the plan needs transparency, oversight and accountability. He said he met with “My Republicans in the House of Representatives” He said that they weren’t part of negotiations but they decided to be part of it.

For the next several minutes there was haggling over whether each man would vote for the package, each making side points, and John McCain saying he would vote for it, and Barack Obama saying he was in favor of it.

The strongest point of the exchange during the first question came from Barack Obama, simply pointing out that Sen. McCain had made the observation that the fundamentals of the economy are strong.

Question one and it’s responses were neither crisp nor powerful, but each man made the points he thought he needed to make. One thing started to become clear here. John McCain would not look at or address Senator Obama directly. That to me seems a tactical mistake. The man could have been stronger and more forceful but seemed to shy away.

Question two: Are there fundamental differences between your two approaches to lead this nation out of this financial crisis?

John McCain First. He spoke of runaway spending, of Washington changing the Republicans, of Tom Coburn calling earmarks a “gateway drug”, he mentioned a $3,000,000 earmark to study bear DNA in Montana, and tried to make a joke. Then he got to the meat of his argument and said that he will do away with earmarks and will veto every spending bill that comes across his desk. Also brought up the fact that Sen. Obama has had almost $1,000,000 in earmarks for every day he’s been in the senate.

Barack Obama. Agreed that the earmarks process has been abused. Agreed that lobbyists often introduce requests for earmarks. Brought up the point that Senator McCain wants to spend $300,000,000 in tax cuts for wealthy corporations. Mentioned that John McCain’s tax plan would give Fortune 500 company CEO’S an avergae of $700,000 in reduced taxes, while leaving 100,000,000 out. Brought up his tax plan, which gives 95% of working families a tax cut.

The back and forth after this question was stronger than after the first question. And things got a little silly, to be honest. Plans were discussed and dissected. The business tax, which currently sits at 35% was discussed, as was Barack Obama’s $800,000,000,000 in new spending. Obama countered by saying that he could pay for his new spending, and made it clear that loopholes that currently exist make American business taxes among the lowest in the world. Neither point was countered. there was talk of tax credits and health care money that bounced back and forth. John McCain did not fare well in these exchanges, though he kept punching throughout

The silly stuff was The “sheriff” quote by John McCain ,that an as yet unnamed person had called him a sheriff, and that he hadn’t won miss congeniality in the Senate. He also tried to pass off a lie about Barack Obama voting to raise taxes on everyone who makes more than $42,000 a year. I have touched on this before, as have several other publications, notably politifact.com and Factcheck.org.

In context he was talking about how he has fought pork barrel spending and the like. But it still, to me, came off a bit dumb sounding. He did try this tactic several times, to play to the audience and get a laugh. It failed each time. It did not look good when he did it. I hope the man learns from this.

Question Three: What are you going to have to give up, in terms of the priorities you would bring as President, as a result of the Bailout?

This question both candidates waffled on, speaking in generalities instead of focusing on what exactly would have to go. Obama initially focused on what he felt he had to keep, while McCain spoke in terms of cutting spending in general, but did mention cutting a particular type of contract that the military enters into, a cost-plus contract, that should go.

When pressed, Barack Obama said that portions of his energy plan may have to be put off, not shut down or stopped, but put off, and that there is a $15,000,000,000 subsidy that goes to insurers in Medicare that can go the way of the dodo.

It was here where McCain became bold. A spending freeze on everything but defense, veterans affairs, and entitlement programs. Barack Obama made this sound like it was too much. The words he used were “using a hatchet where you need a scalpel” Effectively cutting McCain’s boldness down.

There was much more here, Sen. Obama pointing out that Sen. McCain’s $300,000,000,000 business tax break and his health plan would crush Americans, and would be a bad decision. John McCain made a point about sending $700,000,000,000 to countries that don’t like us very much for oil (the actual number is $536,000,000,000 and fully 1/3 of that goes to Mexico and Canada) and said that he wants to greatly expand our nuclear program, opening up 45 new nuke plants.

The exchanges were more tense and terse here than before, and I have to tell you this part was entertaining. Not the Fireworks that were expected, and not the strongest exchanges of the night, but there were some fairly sharp words here on both sides.

So far in this debate, it has been fairly smooth sailing for both men, but the advantage that I saw here went to Barack Obama, simply with the ease of manner, and his willingness to speak to John McCain, where John didn’t seem to want to acknowledge Barack Obama’s existence. That and the fact that every point McCain made, Obama countered, but McCain did not do the same.

Some have noted Sen. Obama’s continual agreement with John McCain as a negative. I do not. It was not a simple “yes you were right john” It was “yes, as far as it goes, but it doesn’t go far enough” or more bluntly stated “Yes, but….” Agreement in part, but not agreement in whole. A semi-subtle point lost on some, I think.

In tomorrow’s Installment, coverage of the next 3 questions asked in the debate.

Uncle Mikey