Richard Shelby Wants To Place US Government In Bankruptcy And Eliminate Military Pensions And Benefits

Seriously. He must be saying that, right?

Because here is what Shelby (and many other belligerent Republican union busters) has been spewing in every microphone and videocam he can get his demented Chesire cat grin in front of:

"I think a lot of it will be life support," Shelby, R-Ala., said. "I believe their best option would be some type of Chapter 11 bankruptcy … These leaders have been failures and they need to go."

Let me draw an analogy that will drive Richard Shelby and his fellow mouth breathing bottom feeders nuts. What about military pensions and benefits after retirement? Well, come on, what about it blowhards that are so quick to call for trashing the pensions and benefits of the auto workers, are you also arguing to trash and burn the same for those in the military???

Because, there is a lot of yammering about how the CEOs of the auto companies made bad decisions and are upside down financially; and, based on that, group think that the auto workers ought to be taken to the woodshed. How is that any different than the employer of the military? Their employer, the US Government, makes the auto company executives look like the most brilliant and responsible financial minds on the planet in comparison. Talk about yer upside down and bad management.

Who has been more of a failure in leadership, the auto executives or the Bush/Cheney Administration and their Republican toadie enablers like Richard Shelby and friends?

And speaking about people who take early retirements; jeebus, a lot of military people are retired and taking full benefits at 40-45 years old. Sorry. How do we afford this if we can’t afford a miniscule bridge loan for American auto manufacturers so they can save their auto workers?

You want to bankrupt GM? Then bankrupt the US too; they need the "reorganization" a hell of a lot more.

This is what Richard Shelby and his ilk are advising. It must be. Because, otherwise, they would just be mindless, hypocritical, bloviating bags of hot foul air.

I think we know the real answer.

84 replies
  1. Leen says:

    Let’s keep our fingers crossed and keep pushing the Obama administration to live up to what Obama said during the campaign having to do with our Vets. Access to all benefits promised and more.

    Many of us were against the war in Vietnam and Iraq but that has nothing to do with our Vets having full access to all of their benefits.

    This morning on one of the Sunday shows (I flip between Face the Nation, This Week and Meet The Press) they were throwing out numbers about what the top CEO of Toyota makes…1 million and what the CEO of GM 15 million and the CEO of Ford 27 million makes a year. Damnation. This is criminal

    I worked at Celestial Seasonings in Boulder for a while during the 70’s. Mo Siegel (creator/owner of Celestial Seansonings then) modeled that company after Japanese corporations. Where the middle folk make far more than the middle folks do even in many U.S. Business models and the mostly men at the top make far less in the Japanese corporate model than the U.S. corporate model.

    Those CEO’s of the big three should be sent packing when they are forced to restructure.

  2. freepatriot says:

    I got an Off-topic request

    george will wrote an article about gun control that seems to hover just outside of my comprehension

    (I suspect that’s cuz will don’t know what the fuck he’s talkin bout)

    could somebody with brains and legal experience explain what the fuck will is tryin to say ???

    I understand that the right to bear arms was considered an instutitutional right, and this case changes that. I just don’t understand the relation to Roe V Wade

    and I don’t see how anybody could discuss the right to privacy without mentioning griswald (???)

    I only got a superficial understanding of this topic in the fist place, but will has me all confused an shit …

    so does this ruling tie the second amendment to Roe V Wade or what ???

    • Jesterfox says:

      George is trying to say that the case decided in favor of individual rights to “bear arms”; Heller, was rightly decided because the right to bear arms is at least mentioned in the Constitution. The right to abortion, on the other hand, as decided in Roe v Wade, was not rightly decided because it relies on a “Right to Privacy” which is no where mentioned in the Constitution.

      Please note that this is George’s argument and not mine. Thank you.

    • LabDancer says:

      Apologies if I missed an earlier effort to help you out.

      In the tiny, little confined spaces that Will keeps his columns inside, like miniature sailing ships in complementary bottle of Coke Cool, this column is pretty typical. He simply compares two instances on how the judiciary reading into a ‘perfect’ little 18th century list of aspirations some other aspirations beyond the imagination of any of its authors, and implies a dismissal of both Dems and Repods to the effect of ‘a plague on both your houses’.

      For a long time I imagined that Will intended by such exercises some larger, deeper meaning, because he does have what appears to be way of implying just that.

      Nah – he’s just screwing around. Last week he pulled some ridiculous historical revisionism on the Great Depression and FDR’’s New Deal clean out of his keester, and fortunately Paul Klugman was there to deal with it. This Week Will looked around and – hey! no Klugman! – so he tried the same crap all over again. But thankfully sitting right there was Robert Kuttner, who the public sees way too little of, and BAM! SLAM! down goes George again.

      [Plus I love how Kutter and Arianna – – You go girl! – – tag teamed Wills and Brooks to the point of the Con Concern Troll Due being shown up for the short-sighted cheap shot artists they are. A new standard for This Week? I wish.]

      He’s not going to change. I see him maybe getting a bit more shrewd, in picking his spots for his future cheap shots. One show soon he’s going to have done his research in advance, and come show time he’s going look around and see the coast is clear, and launch this goofy grenade again.

      The Brits, or at least the Monty Python crew, have a great put-down for Will’s type: Upper Class Twit.

  3. foothillsmike says:

    Would the US bankruptcy also wipeout the pensions paid to former congress critters or would they all receive golden parachutes retroactively?

    • freepatriot says:

      we could pay the golden parachutes off in cash

      all them hundred dollar bills ain’t gonna be good for anything but wiping your ass anyway

      if ya got 5 bucks in loonies, you’ll be a millionaire in george bush amurika

      and in a related topic:

      I’d like to take this opportunity to apologize to all the Canadian readers here who might be offended by any of my past remarks. as a sign of of new friendship, hows about you hosers send me 5 loonies each ???


      • skdadl says:

        Happy to, although it might be easier to sneak two doubloonies plus a loonie through the mail. (Is it legal to transport currency across the border?) I warn you, though: most American merchants look at our currency and decide that we got it by raiding the Monopoly set. Plus it was worth more this past summer. Also.

  4. bmaz says:

    Heh, I dunno, I assume it would axe it all. It was kind of a theoretical argument and I don’t know what happens when you bankrupt a superpower.

  5. Badwater says:

    Pay attention, union members. These are Republics talking. It’s time for all of you to wake up and realize that Reagan was no saint and Republics give less than a damn about you.

  6. foothillsmike says:

    Playing the game, the gov’t would have to follow the corp. model and pay bazillions to wipe out the worker bees pensions etc.

  7. Teddy Partridge says:

    Richard Shelby is an idiot. I have this to say to him:

    “Hey idiot – your ideas suck. Your president has ruined America at home and abroad with his idiocy. The America people have had enough. Go sit in the corner and shut up. No one wants to hear from you any more as the adults now in charge fix up your mess.”

  8. Scarecrow says:

    I really don’t understand why you’ve exempted lifetime retirement and health benefits for Congresscritters, bmaz. You’re such a softie. And why isn’t McCain’s private jet on Sarah’s EBay yet? And all those military flights by Congress to investigate European health care systems?

    What was the total earmark request for Alaska during Palin’s reign?

    • bmaz says:

      Oh I include all that. Well, not Cindy’s jet; her business is actually very healthy and always has been. Of course, if Bush and Shelby had been running it that would not be the case…..

  9. kittykitty says:

    –Those CEO’s of the big three should be sent packing when they are forced to restructure.–

    yes, funny, shelby said that too, and i have to agree. was wondeirng why that couldn’t be part of the deal.

  10. T-Bear says:

    Not having an answer, so much hinges on contract law and the interpretation the courts are willing to support. Since retirement funds are the offspring of valid contracts between the union and the corporation, I suspect it would prove disastrously expensive to the corporations to attempt reneging through the facility of bankruptcy, the standing contract would take precedence over any ownership claims, probably to the extent that ownership is transfered to the union as a consequence. Disclaimer IANAL.

    I cannot see where a government has that option, and no superpower is on record as going bankrupt in this manner. Spain may have been the nearest when the gold/silver of the Americas distorted its economy to the point of failure, a different story.

    • dakine01 says:

      IANAL but my understanding is that is already well established precedent that bankruptcy takes precedence over freely negotiated union contracts and the unions lose.

      I believe it has already been done to get out from under contracts (including pension obligations) in numerous industries including the auto industry.

      • T-Bear says:

        Maybe in a protective Chapter 11 bankruptcy, that was not the form Big-3 were considering.

        In dissolution Chapter 7 bankruptcy, the assets are divided amongst the creditors. That contract for pensions makes the unions mighty big creditors, the others might want the concern to continue to receive their due, possibly agreeing to reform the industry. What will not happen is the current stockholders and management receiving a part of the assets. Again IANAL, depending if the information provided is accurate.

  11. readerOfTeaLeaves says:

    Bmaz, great argument, great post — I hope more people start pointing out precisely what you are saying here.

    This is Shelby, and under GOP control we have had planeloads of $100 bills going to Iraq, claiming that because there’s no functioning banking system there the US had to pay Iraqis in cash. I’m sure that every dollar of those millions was fully accounted for, particularly given the ‘expertise’ in the ranks of those former Heritage Foundation applicants who were operating the US affairs in Baghdad.

    Meanwhile, Blackwater was paid off what set of books from the US Treasury…?
    Good thing the US Dept of Interior addicts (see: DoI, sex scandal; drug scandal) were handling US natural resource contracts so transparently under GOP oversight.
    And the GOP did such a great job managing Katrina…

    I could go on and on, but I hope that I’ve made my point while adding a few pieces of ammo to bmaz’s.

    Where does a jackass like Shelby get off telling anyone the ins-and-outs of management?!

  12. freepatriot says:

    if we declare bankruptcy, who gets custody of the Ohio Class subs ???

    China ???

    Hawaii ???

    do we let the Kennedy’s, Reagans, an bushes keep the carriers ???

    and where can I pick up an M1A1 Abramms tank at auction ???

    my neighbor’s been parkin a little too close to my tree

    fuck it, might as well be practical and go with it …

    • Scarecrow says:

      The excess military infrastructure could be sold off to the Chinese to raise funds to pay Chinese creditors. Since our combined military spending is more than the total for everyone else, it’s about time the slackers bought their fair share.

      I suspect the Afgan and Paki governments might want to purchase our entire Predator fleet. It would probably pay for itself in reduced property damage and health care costs. The US Embassy in Baghdad could probably fetch a billion or two and be turned into a world oil exchange and resort hotel.

  13. CalGeorge says:

    An auto bailout is just kicking the can down the road. Even Krugman says that.

    And the executives could give a shit about the workers. They care about their own asses.

    Toyota and Honda are not failing for a reason. They make cars that people want. They care about fuel efficiency.

    Crap car companies that make crap cars should die.

    Replacing them will be better car companies.

    Our country will be better off in the long run without the constant bailout of companies that are “too big to fail.”

    Companies have to know that the government won’t save them – and operate accordingly.

    • bmaz says:

      That is an inherently ill taken statement about the nature and direction at this moment of General Motors, and the others too to a lesser extent.

      But, mostly, you miss the point of the article. Since you have the gall to say this about the auto manufacturers, you have no problem doing that to the US Government and eliminating all the pensions and benefits do you, including the military?

  14. readerOfTeaLeaves says:

    Just to add more fuel to this bmaz fire, I note the rank hypocrisy of Shelby and the other GOP fools who were willing to bail out Wall Street, but can’t bail out the Big Three automakers.

    In other words, the GOP is willing to bail out imaginary ‘financial contracts’ that were created by computer programming called ‘derivstives’ and produce zero tangible products.

    Repeat: a ‘derivative’ is a piece of paper (or a set of them). As near as I can ferret out, a ‘derivative’ is a series of algorithms that produces no visible, tangible ‘product’ other than bank transactions, paper contracts, and results in phenomenal ‘bonuses’ on Wall Street. But GOP will bail out paper and computer code.

    Auto makers produce a whole network of employed Americans: mechanics, dealers, finance employees, service and parts jobs — to produce functioning vehicles. But God forbid that the GOP actually help out people who produce actual goods and services!

    I have my issues with Detroit, but compared to Wall Street and it’s obscene bonuses, at least Detroit produces tangible goods. Wall Street’s really good at inflating egos, the sale of extremely luxurious goods, and a sense of privilege.

    And Shelby evidently can’t think clearly enough to distinguish between bailing out imaginary paper and algorithms, and bailing out actual manufacturing and services.

    No doubt that places him in the top 20th percentile of the GOP Mensa ranks.

    • ThingsComeUndone says:

      We need your ideas given to dem media talking heads as talking points. I swear the media and political classes have no understanding of anything outside washington.
      But the GOP is always willing to wing it on the facts and the Dems let them because they don’t study the issues either.

      • readerOfTeaLeaves says:

        Thanks for your kind words, but all I really have to do is look at Chuck Schumer, and I figure he’s going to cover Wall Street’s sleazy, greedy ass if it’s the last thing he ever does.

    • bmaz says:

      Exactly! And by the way, when Shelby and the mouth breathers clamoring for BK treatment for GM figure out that there are now no more suppliers for the Toyota and Honda factories in their little backwater swamps, and that those have to be shuttered and all production moved back to Japan, what are they going to say then?

    • 19genco says:

      FYI here is what we could have done with the TARP money. There are about 51 million first mortgages in the United States right now — but only about 1.4 million of them are either referred for foreclosure or in foreclosure, according to the Mortgage Bankers Association chief economist Jay Brinkmann. In other words, fewer than 3 percent of American homes with mortgages are in foreclosure. See:…..d=94921465 (here are some of the latest but dated government figures from Oct. 2007, which are a little lower than the Brinkman numbers

      The average first mortgage on a home is around $225,000.00 with payments of $1780.00 principal & interest for a period of 30 years. Here is the math:

      If the US TARP program paid 100% face value for each one of the 1.4 million mortgages in foreclosure or about to go into foreclosure average $225,000.00 the cost would have been 1.4 million X $225,000.00 = $315,000,000,000 or $315 Billion dollars. In other words the US could have paid the lending industry 100% of the value of each of its bad loans, and stopped every foreclosure on every homeowner that was in foreclosure or about to be foreclosed for less than half of the $700 billion TARP program. The US could then have gone to each homeowner and renegotiated the debt to keep a large majority of the people in their homes.

      This not only assumes the US would have had to pay 100% face value for each loan, but that each loan it purchased had no value, which is not true. Assuming that the average loss would have been 50%, or stated another way, that the US modified each loan with each homeowner so that it was affordable and the loan was still secured by equity in the property, say at an average loss of 50% (or the average value of each home in foreclosure was 1/2 of the mortgage debt), this means the US would have written down 50% of the $315 billion cost. So saving each homeowner in or facing foreclosure would have cost a little less than $160 Billion. Throw in another $40 billion to set up and administer the program similar to the depression era HOLC program and some unexpected costs and liabilities, the US could have saved almost everyone in foreclosure at a cost of around $200 Billion. It would cost even less when you think of the interst that these now performing loans generate and throw in a small equity kicker on sale or refi as a condition of the restructured loan. The other $500 Billion in the TARP program that people like Shelby are quiet about is going to pay off the credit derivative losses I suspect, other losses, or buying other banks.

      • readerOfTeaLeaves says:

        Thank you very, very much for this!
        It’s a great collection of data — plus sourcing (!) — that I’ve not assembled myself, so I’m very grateful.

        Here’s how I read what you wrote:
        1. Yeah, we could have paid off the mortgages; it would have cost plenty, but would have been worth it socially and fiscally.

        2. However, the Powers Behind the Scenes (i.e., Wall Street, hedge funds, banks, options markets) aren’t interested in the COST of the houses — they’re interested in the (huge) ‘INTEREST assets’ they’ve recorded on their ledgers. They don’t make a dime from the cost of the actual home — their ‘profit’ is 100% from the interest payments over 30 years.

        3. Therefore, paying off the mortgages was never, ever the agenda of the Wall Streeters, nor the hedge funders, nor the bankers. That’s the LAST thing they want, because it would vaporize their ‘assets’ (i.e., financial inventions created out of ‘contracts’ for mortgages….). Their assets are not tangible; they never were. Their assets were always risky, and they knew it, which is WHY they created derivatives.

        4. There was almost no way that a Chuck Schumer (or Hillary Clinton) of NY was going to vote for a package that paid off mortgages; they don’t represent homebuilders, they represent the people who ‘make money off money’ via interest and banking ‘transactions’. Their constituency is not asking them to pay off mortgages. Their constituency is pleading with them and bleating to have the rest of us pay off what are essentially gambling debts, made respectable by the patina of Wall Street and fancy offices. (Like so much in life, it was 90% bullshit and bluff, but they really hate to be exposed as such.)

        Note that GOP Mensa Richard Shelby doesn’t represent Wall Street, is from a non-union state, and voted against tougher energy standards for the auto industry. In addition, he is a stellar member of the Global Warming Deniers Club, kept the lid on the GOP/Bush intelligence failures and shenanigans, and chaired the Sen Committee on Banking until the Dems won in 2006, IIRC.

        Like Schumer and Clinton, Shelby is about covering Wall Street’s sleazy ass — because doing so covers his own sleazy ass.

        As for Clinton, however, given her record on health care and her courage the past two years, I cut her slack.
        And I cut Schumer slack for digging into the DoJ firings.
        But I don’t think any of them realize the depth of rage that I’m seeing from ‘ordinary people’ where I live.

        In the past week, it turns out that two more people I am acquainted with are in foreclosure, and one will fire for bankruptcy. FWIW, it just doesn’t seem realistic to expect people who are foreclosed (or who know people who are foreclosed) to bail out Wall Street.

        But these people can understand bailing out manufacturing a whole lot more than they can understand bailing out the very people who sold them bad paper and bullshit promises.

        I don’t have a crystal ball, and I’m sure not omniscient.
        But that’s what I see from my tiny view of the world this week.

  15. kittykitty says:

    Here’s my question of the month: Which of the many thieves is going to have his ah ha moment, step up and give it all back to the people whose money he stole?

  16. 19genco says:

    I do not know the math or the mechanics of this idea, but instead of giving the money directly to the automakers, how about the US buying a controlling share of stock, voting for an emergency stockholders meeting which will then vote to replace the management with new management, including the union in the management and selling/returning all or most of the stock to the workers on some sort of repayment plan so the workers now run the company on the condition that the automakers start meeting higher CAFE standards and create fuel efficient cars.

    • ThingsComeUndone says:

      It could work but we would have to buy enough stock at a higher price to make sure the car companies got the money they needed. Chrysler is owned by a hedgefund though we can’t buy the stock.
      On the other hand Chrysler has access to hedgefund cash they should not need any bailout money.

  17. muleboy303 says:

    kudos bmaz,

    on a historical/analagy scale this argument “goes to ELEVEN”
    (on the proverbial ten scale)

    outstanding work

  18. ThingsComeUndone says:

    Can we get rid of top management as a condition of a bailout for both cars and banks?
    Can we get previous CEO’s to return stock they sold in the last 5 years voluntarily or should as a condition of a bailout we investigate their books for the last 10 years?

  19. Jukesgrrl says:

    If our media actually WAS controlled by liberals, they would never put a microphone in front of Shelby and his ilk. Instead, they would be searching for video of him/them singing the praises of their president George W. Bush. I’m sure there were cameras running when his Congressional supporters were campaigning for his reelection in 2004. That’s what should be reported alongside ANY suggestions that these Republicans might make for correcting our current ills.

  20. foothillsmike says:

    I can’t believe the Auto manufac. are so stupid. First there is the corporate jet thing and then the ads for their stuff on tv. All I have seen for the past seceral weeks is Hummer ads and ads for big cadilac SUVs Lets advertise how stupid we have been. Geez

    • readerOfTeaLeaves says:

      Clearly, there are plenty of problems with the Big Three.
      Clearly, much needs to be done.
      However, the difference between bailing out Wall Street and/or autos is huge, and by conflating the two economic sectors AND then also focusing only on auto exec pay and planes, we all miss the critical issues at work here.

      There are other — predatory — parties who’d love to get their hands on US patents that are currently owned by the Big Three. That’s nothing to mess with, and although I totally understand (and share) your contempt about the planes and the ads, there are other factors at work that we really need to see more clearly.

      Focusing on ads and exec planes and pay blinds us to acting wisely.
      As for Wall Street… glorified financial hookers that they are… they’ll claim that without them, no one can buy a car. I call bullshit — we’re not so stupid that we can’t figure out ways to buy cars without selling our souls to Wall Street or AIG.

      Richard Shelby and the other GOP Mensas are among the least qualified people to make these decisions, IMHO. These aren’t exactly innovative thinkers calling the shots; we’re in scary territory.

      • bmaz says:

        Bingo. And everybody keeps talking about “restructuring under Chapter 11″. This is a fallacy. Nobody will give financing for the company during the process, which most businesses have always been able to obtain. The credit freeze is preventing this. Keep in mind that but for the credit freeze, GM could just bet interim financing on their own now. Okay, so, say the the government agrees to back the debtor in possession GM during a Ch.!! restructuring. The problem is still that 80% of America will not buy a car from a company in that position (yes, it has been studied).

        The BK process needs to be avoided if you want to save the auto industry and the entire economy as we know it.

        • LabDancer says:

          I could just as well have linked this to freep, or reader.

          In earlier thread, I posted a way-too-long, probably way-too-basic response on what bankruptcy actually means, as opposed to what it means in the legislation as it now stands. I don’t propose to revisit that. Instead, I think this might fit better:

          The moment the Big 2.5 receive a government proffer of a ‘clear’ bailout, Chapter 11 is made irrelevant. Indeed, one could argue the same as to the entire legislative scheme.

          That is so simply because at that point the government would become the ranking, and for that and related reasons, the CONTROLLING interest in the orderly disposition of the US auto makers.

          We all agree that

          [1] Shelby doesn’t give a rat’s tiny behind about the workers and their pensions and other benefits; he’s simply the moron [Sorry – to morons – you have it right as the designated mouth-breather.] sent out or who volunteered for this zombie version of Cassandra he’s putting on [To the extent it’s at all compelling speaks as much if not more to the size and efficiency of his brain as to the degree of his conflict.]

          [2] One of the most compelling arguments for bailout is the fate of the workers due to the effect of orthodox legal bankruptcy on their pensions and other benefits.

          [3] It’s counterintuitive that our King of Incompetence will do squat in this regard, especially given he’s workin’ so hard on his legacy and his pardon list.

          [4] Subject only to the possibility that the highly interdependent framework on which the 2.5 continue to operate collapses like a house of cards before they can get to it, and to the somewhat lesser risk that the Senate will screw up the whole thing, the Obama executive and the 111th Congress will proffer a bailout.

          Linking [2] to [4], that means that when the time comes, Obama is going to be in the position of in essence empowering two interests: labor and a green future. The former is one we’re interested in more at this point. As a practical matter, it means that the UAW becomes a player in the decision as to who will be the Auto Czar –

          because we’re going to need one –

          because putting the 2.5 back under the 2.5 over-upholstered nitwits who showed up to testify before Barney et al amounts to resigning to Shelby’s Doom.

    • bmaz says:

      They have them in inventory from before the financial collapse (which is not particularly their fault). In order to move forward with all the stuff all the brilliant non-auto people want, they actually, you know, need the income from selling the things that were already produced.

      You think they shouldn’t do that?

  21. nahant says:

    Daniel Mitchel of Cato institute is on CNN saying let big three die along with the Unions… He also says there is too much regulation and that government should regulate the market use lazaire faire markets.. What an ass He must just love uncle Miltie Friedman!

  22. freepatriot says:

    upon further review, bankrupcy in the auto industry just might be the crisis that causes the US monetary system to fail

    I read some where that if the auto industry goes under, Social Security would lose $17 billion a year in reciepts. The total income tax loss on the federal level was figured too

    basically, you would be taking about $100 billion in anticipated revenues from the federal govt

    what’s the budget, $1 trillion ???

    $100 billion is 10%, right ???

    could be the straw that breaks the camel’s back

    and that isn’t figuring the losses at the state and local level

    we should lock Krugman and Nate Silver in a Hotel suite and let them figure all the possible ramifications of killing the big 2.5

    should take them about a day …

  23. DBfromPNW says:

    The big power struggle over Detroit involves some key players that are easy to identify: Unions, Management, Anti-Union politicians and allied organizations, Communities in the midwest whose economies are tied to Detroit (suppliers of glass, rubber & plastics, etc.), Pro-Union / pro-Worker Democrats & progressives, Financiers, Investors.

    Shelby is mouthpiece for those who would love to destroy Unions. Anything they say otherwise is a smokescreen. Bankruptcy 11 or 7, doesn’t matter… Bailout, doesn’t matter… Goal is consistent: Eliminating Unions will make the US “competitive”.

    The elephant in the room is China. They could cough up $10 Billion, or $20 Billion (to placate investors whose Detroit Big 2.5 is nearly worthless).

    What do we lose in this scenario: Unions, patents, infrastructure, control over a large manufacturing sector, millions of highly paid workers get Wal-Mart style wages, – anything else to add?

    The biggest concern should be the loss of our ability to compel Detroit to get on board with the emerging green energy economy. Without this manufacturing base it will be very difficult for Obama’s team to create new green jobs – jobs that support families, jobs that conserve resources, and jobs that add value to our communities.

    • readerOfTeaLeaves says:

      The biggest concern should be the loss of our ability to compel Detroit to get on board with the emerging green energy economy. Without this manufacturing base it will be very difficult for Obama’s team to create new green jobs….

      Ominous, and important, point.
      Am I willing to support more plane rides for auto execs? Nope.
      Am I willing to support keeping these companies alive until the Dems can get in there and make the shifts to green? Yup.

      So assuming that there are very powerful forces who:
      (1) have zero interest in the US going ‘green’, because they like selling oil, munitions, ‘contracting services, etc, it looks like things are going to be very, very dicey the next two months, and
      (2) given the desire of some to get their hands on the Big 2.5 patents, it looks like the next two months are going to be very, very dicey.

      Wonder if Randy Scheunemann is pimping himself out to Russian oiligarchs, or who he’s selling his ’services’ to these days, but it wouldn’t surprise me one bit to discover that he and his GOP lobbyist-strategist ilk are working on behalf of foreign ‘clients’ to sell out the US auto industry.

      Harry Reid and Carl Levin must surely be walking a tightrope, and the auto execs didn’t exactly help things along. Here’s hoping the Dems find the political mojo to keep this thing alive till Jan 20th, because it’s quite clear that this is the prime moment for those who want to cannabalize the auto industries and grab the patents will put the push on for the Big Collapse probably a week or two after Thanksgiving.

      • DBfromPNW says:

        Lab Dancer and Reader of Tea Leaves;

        Spot on.

        Given that Obama is not President until Jan. 20, under “commonly accepted” rules what can he do, and what can we do, if the next to the last jewel in our ‘value added’ crown (Hi-tech being the fragile remaining gem)is tossed into the torrent between Thanksgiving and Christmas?

        We’ve got to create something new. We must define what new, clean, green, renewable economics means. We owe it to ourselves and to all humanity.

        Because, as has been said of democracy, “It’s the worst thing, except for all the other options.”

        Let’s put on an all out assault on those who have falsely claimed that they care about freedom, democracy, and the market. This country will survive, let alone have a chance to prosper, if fair rules and a level playing field that offers equal OPPORTUNITY is reinstated.

        Otherwise we will answer to successful tyrants from the Middle East to the Korean peninsula, who care for the bottom of the balance sheet, and care little for the tragic consequences to any community.

        Detroit, Katrina, New Orleans, Big 3 / 2.5, are only our last shouts to Wall Street – they came for those communities and we said nothing. Then they came for us.

  24. bell says:

    everything hinges on ‘confidence’ in the us$… this is backed up to an important degree by usa’s changing military clout… any facade suggesting us superiority is being challenged at the moment.. how long it lasts and where this is going is anybodies guess..

    if you are going to make cuts to union workers, may as well cut off the same for politicians, congressmen, the military and etc. etc…boneheaded moves are copyrighted by none of these areas more then any other, although politicians and wall st. bankers need to be given a special prize for using this move so regularly… everything ‘financial’ is being held up thru confidence in the us$ with all world ‘fiat’ currencies in tow… interesting times…

  25. Radmul says:

    The flaw in your reasoning boils down to the fact that no entity will lend money to the idiots at GM but there are still people dumb enough to finance the governments debt. You are not bankrupt until you cannot borrow any more.

  26. DBfromPNW says:

    GM’s FUTURE?:

    (from Climate Progress)

    # Steve Bloom Says:
    November 22nd, 2008 at 4:28 pm

    .. speaking of cars (and a good subject for a post IMHO):

    According to this article,…..ng_ch.html a Chinese company is just now rollng out a plug-in hybrid with an 80 mile battery range (double that of the Volt), and wll bring it to the U.S. in 2010. It sounds as if the asking price will be substantially less than the Volt’s $40K. They plan to launch a full electric next year. I’m no judge of technology or business plans, but Warren Buffett just bought a 10% stake in the company.

    ‘”We are experts in the battery market,” Li said. “We have the know-how and the process down. We make the safest batteries in the world. We have never had a recall.”

    ‘This expertise in batteries is at the heart of BYD’s strategy for taking over the auto industry, which it entered in 2003 after purchasing a government-owned auto plant. In a short time, BYD has become a top seller in China. Currently, BYD makes five models of fuel-powered sedans and hatchbacks, ranging from $8,000 to $20,000.

    ‘For its electric cars, BYD developed a lithium-ion battery that uses iron. Using iron brings down the cost of the battery and offers a life cycle of up to 10 years — five times a cell phone battery, Li said. The F3DM, BYD’s plug-in electric hybrid, will allow drivers to run on electricity and gas, seamlessly switching between the two. It boasts extremely low emissions, plugs into a household socket and can go 300 miles on a full tank and a full charge. The company has yet to set a price, but estimates range upward of $20,000.

    ‘The company is developing a purely electric vehicle that it plans to launch to Chinese consumers in 2009, Li said. It will be a matter of time before the E6, a full-size sedan that seats five, arrives in the U.S. In the company’s glossy showroom, a sign calls the car “Faddy, Faithworthy and Futuramic.”

    ‘”The hybrid is a good introductory product,” Li said. “Until electric vehicles are more popular, the charging stations don’t exist. This will allow people to drive farther without worrying about it.”‘

    According to this NYT article (whose author seems to be completely unaware of the Chinese company), GM is staking everythng on the Volt. I’d say they’re toast.

    • bmaz says:

      They may have great batteries, but they are going to have shitty cars. The Volt is a good car. GM can buy their stinking batteries or, better, get the same or better from their ally in Korea cheaper.

      • DBfromPNW says:


        Agreed!! Crappy cars. Koreans can do better, as can Detroit if they’d focus on making a few quality models instead of spreading themselves all over the map and diluting their best talent.

        Poor Oregon if they get the Chinese version of the Trabant – doors falling off but… on the bright side… at least no cloud of smoke.

        DB (from too close to Oregon if they get Chinese autos.)

        • bmaz says:

          That is really where US automakers were already headed. They, especially GM, are huge; they cannot turn on a dime. They waited too long to start the revolution, but were slooowly, but quite solidly, on their way there when they (especially GM) got caught up in this credit crunch. There is a viable and good entity there worth the saving though. They are headed in the right direction.

          • LabDancer says:

            “They are headed in the right direction”

            I think that is true enough – so long as you don’t include the Boards, the CEOs, the upper management and the divisional managers. Below them are several battalions of mid-management lovers of all things automotive, who have closer contact with the worker bees, and between the last two there are an awful lot of folks filled with “the vision thing” – that mix of realism with idealism that provides the only route the industry has to getting competitive. The more established components of the even bigger military machine industry have the same deadwood-on-top problem, but with the distinct advantage of being reflexively subsidized out the public purse.

            It’s not as easy as some think to just blow off the deadwood, because they’re who’s been on the front lines in responding to the various classes of creditors, shareholders, dealer-partners, parts-associates and other such stakeholders. And those folks are people too.

            If you add up all those folks in a right-side column and the roll-up-the-sleeves types in a column to the left, you get the distinct impression of a zero-sum game. The general impression from what Paulsen et al have been doing with the Bush half of the pre-election bailout is that they’ve been ‘bargaining’ between those two interests in another zero-sum game, but with the left side having no actual voice. No one here I would think imagines Paulsen is actually capable of reflecting Main Street concerns with any critical accuracy.

            [And I think he realizes it; it would explain why he seems so nervous, as if with every word he’s adding a particular to the eventual indictment.]

            This is why I actually think the impending auto bailout has a chance to work out better than whatever the hell Paulsen et al have been doing. But only to the extent it provides a voice to the worker bees.

            That isn’t necessarily inconsistent with the idea of a Car Czar, and not at all if that person gives them not just a fair hearing but a public voice.

  27. Kassandra says:

    I thought the article Shelby was talking about the auto industry??? which is certainly bad enough, Boris!

    “The senior Republican on the Banking Committee said Wednesday he doesn’t believe there will be a turnaround in the troubled U.S. auto industry until its top management is ousted and its manufacturing operations are revamped.

    “I don’t think they have immediate plans to change their model, which is a model of failure,” Sen. Richard Shelby said, a day after the top executives of General Motors, Ford and Chrysler came to Congress to plead for a $25 billion “bridge loan” to avert layoffs and plant closings.”

    I didn’t see where you got that the entire government should declare bankruptcy?

  28. Hmmm says:

    Pure fantasy I realize, but since the pension & healthcare obligations sound to be the largest debts the auto companies hold, why not?:

    1. Auto companies declare Chapter 7. (Yes, obviously this launches the Great Bush Depression. As I said, this is all pure fantasy.)
    2. Court awards the most liquid assets (trademarks, patents, copyrights, etc.) to the auto workers past and present. (Other creditors split the rest of the assets, tangible stuff mostly.)
    3. Auto workers sell and/or license those IPRs to highest bidders.
    4. Proceeds of sale and/or license fund auto workers’ pensions & healthcare going forward.

    • DBfromPNW says:

      Dear Hmmmm; (Did I get enough or to many ‘m’s’ in there?

      Re. 3: This is where ‘highest bidder’would benefit from specifics – Who might the high bidder be?

      At this juncture a number of European banks that have been closely regulated by their ’socialist’ governments (Spain, France to start) and China (estimated cash on hand $2 Trillion +) are likely to be in the mix.

      Who else can do that? US Govt. How to overcome the cry of ‘Socialism!’ from the chattering elite?

      China has wanted to have a foothold in the US auto market for decades. Europe already owns a big share of its auto production and is less likely to be interested in greater US market penetration when there is no demand and a likelihood that their companies will be ahead of the carbon tax game.

      It keeps looking like our robotics and trillions of dollars of Big 2.5 research going overseas, following IBM.

      If Detroit, once the queen of US industry, is relegated to being a Rook it’s easy for China to take her.

      We need to keep in mind that an international shift in power is likely to be the consequence of a bad bailout of Detroit (weak terms and insufficient reorganization / greening) or a Chapter 11 turning into a Chapter 7 firesale.

  29. bmaz says:

    If you are worried about the stability of the company overall, this probably is not a a bad use for a measly billion dollars. You want the company to stay alive and be able to take care of its workers and everything else or don’t you? GM has had multinational components for many decades. Their international operations are profitable. The company as a whole must survive.

  30. LabDancer says:

    This is OT though aimed at bmaz –

    Still appreciative of our truce [? or understanding anyway] over Holder re: Chiquita, could it be that one of Sunday’s posts by Glennzilla, particularly the part referring to an Ambinder post, may capture the difference in our perspectives?

    I’m not saying I necessarily accept the strategy as fool proof [if that’s what it is; I admit that I’ve partly assumed and partly hoped this to be the case since his capitulation on the FISA immunity amendment], not by any means; and I’ve been reading posts lately that question whether Lincoln’s ‘keep your enemies closer’ strategy actually worked to benefit his administration or the country.

    But it’s certainly not rational to bet that it definitely will NOT work in the capitol, and the perspective of US Senator may be better than our own as to that question.

    It turns out that for whatever reason there aren’t too many progressives in the Celebrity division of the Establishment class, and even less have been in power positions in the Beltway for a substantial period of time.

    I suppose the question is whether you actually need more than a few, when one of them is the leader – and especially so given how the Water Boy and Dick have beefed up the leader’s power; and if the leader is one, as Ambinder is confident [more than us!], we’re apparently going to find out.

    Again, assuming the Ambinder surmise is true [I think it’s characteristically audacious AND conciliatory, if that makes sense.], then that certainly doesn’t mean liberals and progressives necessary will NOT be empowered – just not at the top, or not yet, or both.

    Moroever, the guy’s not beyond throwing trouble under the bus – to say the least: I really quite like and respect Jeremiah Wright, despite, and maybe even a bit because of, the Village Idiot act at the end of his 15 minutes; and the more I hear and read of Bill Ayers, the more I think THAT’s the guy to have a beer with – so if Holder were to stumble in some way that betrays his failure to rise above his past, well, buses come along pretty regularly in WDC.

    Maybe this is better done by e or g mail.

    • bmaz says:

      This clap trap doesn’t mean squat to me. Holder still completely sucks and there should be a far better person installed as AG. I hoped for better out of Obama, but never really expected it. Well, here we are. Holder is a pitiful choice and Obama is a chump for naming him. Greenwals and Ambinder are free to think whatever they want; I’ll stick with what I have said.

  31. klynn says:

    We need to continue the national security point and “hammer it” to the point that Shelby looks to be the selfish moron he has managed to be up to this point.

    Continue to make the point that there will be nothing to keep the industries in the south moving to Mexico or China.

    Continue to make the point this will hit the whole country in a difficult way and weaken our whole country.

    He needs to stop fighting the Civil War.

    Getting the big 2.5 would destroy our military industry and kill our intellectual properties developed and being developed through the industry and UAW backed corporations. I wonder does Shelby have Russian, Chinese, North Korean…national threat based relationships?

    I am deeply surprised Arnold has not been out in front lobbying for the auto bailout. His state is at a terrible rate of unemployment ad it is a huge state. My understanding is that the state unemployment could jump another 2-3% if the 2.5 tank. And that does not include those sectors hit by reverse stimulus from unemployed citizens. So that 2-3% is probably higher.

  32. sunshine says:

    bmaz, Sorry if I get wordy again. I assume if the Big 2 1/2 go down Shelby thinks his state would benefit greatly. Did Gettlefinger’s Press Conference get covered this weekend?

    Thursday 11:45 I heard there would a noon press conference from UAW head Ron Gettelfinger. Detroits channel 7 carried it and I believe CNN carried part of the it. About 8 or 9 minutes into the press conference Detroit’s channel 7 news I noticed scrolled on the bottom of the screen that a message from Mi Senator’s Carl Levin’s office said that a bipartisan agreement had been reached. Later we heard there would be an announcement at 2:30 regarding the agreement. Then at 1:30 we heard the speech from Reid and Pelosi about show us the plan we’ll show you the money. This put Gettlefingers speech off the headlines and into the back burner. As it happened I thought someone was in a big way trying to stop Gettlefinger’s message from getting out. Here’s what UAW head Gettlefinger said about Alabama’s non union auto jobs. I could not find a transcript so I did it myself, “g” was that work.

    But, lets go to the competitive piece of it first of all. Since 1992 states where we have transplants located have put in over 3 billion dollars in incentives. And I would point out that that’s the money that the state settled for. And I want to go specifically to Alabama if I could for a minute. We have

    Hyundai Motor Company that got $252.8 million in incentives
    Toyota there got $29 million in incentives
    Honda $158 million
    And Mercedes $253 million in incentives

    It just seems odd to us that we can help the financial institutions in this country. That we can offer incentives to our competitors to come here and compete against us. But at the same time were willing to walk away from an industry that is the backbone of our economy. And while I read these figures to you which is the actual figures that we’ve been able to dig up I want to go to one particularly. And this is the plant, the Mercedes plant in Alabama. As it turned out as I’ve said Alabama offered $253 million dollars. But the state offered to train the workers, clear and improve the sites, upgrade the utilities, buy 2,500 vehicles and it’s estimated that incentive package totaled some where around $175 million dollars, oh excuse me $175,000. per employee to create those jobs there. And on top of this the state gave this auto maker a large parcel of land around $250 to $300 million dollars that was the same price or cost to them of building a facility.

    So we can support our competition but we can’t support an industry that’s in need. And this need was not brought about because of what the industries done.…..ructuring/

    Here is Gettlefinger’s press conference.…..b482c1e594

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