Dan Quayle and Cerberus Holding American Economy Hostage


(Graphic by twolf)

Chris Dodd has signaled that he will let Dan Quayle’s Cerberus hold GM–and the American economy– hostage to get out of its crappy gambling bets.

Senate Banking Committee Chairman Chris Dodd said General Motors Corp. Chief Executive Richard Wagoner should be replaced as a condition of federal aid and Chrysler LLC may have to merge to survive.


“Chrysler, is, I think, basically gone, probably ought to be merged,” Dodd said. Ford Motor Co. is the healthiest domestic automaker, he said.

Chris Dodd is right: Chrysler undoubtedly has to merge to survive. That’s partly because it does not have the global reach of GM and Ford. Because GM and Ford have significant sales in China and India and other quickly growing markets (which have been netting much higher profits), they can offset lower profits or even losses here in the States. But Chrysler doesn’t have that, so it can’t become profitable–across all its operations–as quickly as GM or Ford can. 

Chrysler also doesn’t have the product development pipeline its domestic competitors do. Ford has had increasing success of late offering either new US models on Mazda or Volvo chassis (like the Fusion, which competes well in quality and safety with the Accord and Camry), or bringing successful European models to the US (Focus in the past, and Fiesta and Mondeo in the near future). GM has the new Malibu (which is also gaining market share in the sedan segment), with the Cruze and Volt in the works (as well as any Opel models it decides to bring to the US, though the threats to shut down Saturn don’t bode well on that front). Chrysler’s got nothing equivalent. 

But understand: GM acquiring Chrysler–which is the most discussed option–offers little benefit to GM. Sure, the merged company would get to sell either the Renaissance Center in downtown Detroit or Chrysler’s fairly new digs up north; you could find efficiencies in headquarter structure (if you were a healthy company to begin with). But everyone agrees that two of GM’s most urgent problems are that it has too many brands and too many dealerships. And you want to fix that by making it take on 3,300 more dealers and three more brands? This is Congress’ idea of a really smart restructuring?

Making a Chrysler bailout contingent on GM’s acquisition of it is two things. First, a refusal to do the most logical thing with it, nationalization. With nationalization, Cerberus loses everything–as it should–but the country will have veto power over which company acquires Chrysler in the future (making sure, for example, that China’s Dongfeng doesn’t acquire it so it can have easy access to the American market). 

But far more important, making a Chrysler bailout contingent on GM’s acquisition basically bails a bunch of muckety-muck Republicans and pseudo-Republicans out of their stupid business decisions. 

As this article makes clear, Cerberus is a private investment firm loaded to the gills with Washington retreads:

But Cerberus is also pursuing its interests aggressively in Washington, where some lawmakers have questioned why the government should assist the privately owned Chrysler. In addition to [former Treasury Secretary John] Snow, the firm’s chairman, Cerberus’s Washington hands include Dan Quayle, the former vice president, and Billy J. Cooper, who has worked as partner at the lobbying firm Patton Boggs.

The firm has also hired Arnold I. Havens, a former general counsel of the Treasury Department; John B. Breaux, a former senator from Louisiana; David Hobbs, former assistant to President Bush for legislative affairs; and Christopher A. Smith, former chief of staff in the Treasury.

Cerberus’ MO is to buy companies cheaply, chop them up, re-package them, and sell them for a profit. Which is precisely what they intended to do when they acquired Chrysler last year for $7.4 billion (and more than half of GMAC in 2006). But, after a year-long hunt for someone to buy Chrysler and a further $2 billion investment, Cerberus is stuck with a company in a troubled sector hemorrhaging money. So they have been lobbying to have someone bail them out of their crappy investment. 

Which is where the Republicans in Congress comes in. We know that Bob Bennett (who has received $17,000 of Cerberus love of late) is getting lobbied to get Cerberus bailed out of its bad investment; and, surprise surprise, Bennett proposed exactly that at Thursday’s hearing. We also know that someone–probably Snow or Quayle or someone like that–not only chatted up Bob Corker the other day, but induced him to publicly announce that Cerberus isn’t going to help bail its own company, Chrysler, out (this was right before Corker slammed GM’s stock by falsely stating its DOE application had been rejected). And though Richard Shelby doesn’t want any kind of bailout, it’s worth noting the $37,500 invested in him of late, as well as similarly large chunks to John Kyl and Orrin Hatch. (Cerberus also gives big to MI’s legislators, both Democratic and Republican.)

In other words, some of these Republicans who are so adamant that the Big Two and a Half shouldn’t be bailed out also happen to be the same guys pushing to bail out their buddies at Cerberus.

So when you hear that an auto bailout may "require" a Chrysler merger, what you’re hearing is Chris Dodd saying that certain Republicans are holding the auto industry–and with it the American economy–hostage so their well-connected buddies can get bailed out of their crappy investments. 

95 replies
  1. dakine01 says:

    Isn’t there supposed to be some element of risk involved in investing? To, kind of, justify all the big bucks thrown around?

    Or am I just being naive?

    • ThingsComeUndone says:

      If investing in hedgefund that employs Dan Quayle is not risky I don’t know what is:) Heck even with a bailout in this economy I wonder if Cerberus can survive.
      Also I want an independent audit of Cerberus to prove that they are indeed broke and can’t bailout Chrysler themselves.
      Of course any such audit proving that would cause all of Cerberus’s investors to flee.

    • bigbrother says:

      Had a broker advise me once…if can’t affoed to lose, don’t buy stocks as risk comes with a chance to make a profit.
      That was in the late 70 cefore they went balls to the wall on risk with all the phony paper and all the bubble economies.

      • ThingsComeUndone says:

        Do research find a good company with products that sell that you understand no Enron nobody understands how they made money.
        The market will bottom soon the only question is will it go up? Or will we have a 70’s lost decade for stocks?
        If Obama goes all center Dem on economic policy expect a lost decade.
        If not then would be the time to buy assuming his ideas get through Congress.
        We need plans for the economy and the big three just throwing cash won’t work.
        I want to hear the plans. I want to know what kind of cars the big three will build after we retool their plants.

  2. radiofreewill says:

    Holy Hypocritical Barking, Catwoman!

    Dammit! (Smacks fist in palm)

    Even the guard dog for Hell is on the take!

  3. phred says:

    EW, isn’t MitWit Romney a prominent stakeholder in Cerberus? I might have that wrong, but I think that he’s involved with them in a big way. Don’t want to risk his image as a wise fiscal conservative do we?

    • emptywheel says:

      I’m not sure. He certainly was one of their bigger recipients of campaign cash.

      And there may be a Mormon connection, too, given that Bennett and Hatch are two of their biggest recipients.

      • phred says:

        Thanks EW. I stepped out for awhile, but I did a quick check and I was mistaken. Now if I could just remember who it was I was thinking of…

  4. rosalind says:

    i look forward to the hearings where Quayle et al are forced to prostrate themselves before the American people to explain what part of free market economy they don’t understand.

    private profits, socialized losses.

    cue sonnny and cher: “and the beat goes on…”

  5. ThingsComeUndone says:

    It was an epic showdown between legendary buyout king Henry R. Kravis and New Age hedge fund manager Stephen A. Feinberg — and Feinberg won. On Apr. 3, General Motors Corp. (GM ) announced that it would get about $14 billion over the next three years for selling a 51% stake of its highly profitable GMAC finance division to a group led by Feinberg’s firm, Cerberus Capital Management LP.


    Cerberus has a majority stake in GMAC. Is Cerberus having cash problems is that why GMAC is not making any auto loans?
    Also Cerberus is a hedgefund I don’t want my cash used to bail them out a merger is ok but Cerberus can sell its other holdings to raise cash to fix Chrysler or it can sell Chrysler.

  6. Scarecrow says:

    “Chris Dodd is right: Chrysler undoubtedly has to merge to survive. That’s partly because it does not have the global reach of GM and Ford.”

    Are you saying that a purely domestic auto company is not sustaintable? I.e., that you have to have these foreign links to product lines and the ability to use foreign profits to subsidize US operations?

    Or are you just saying that given this economy, the only companies that can survive through this period are those with these foreign links?

    • emptywheel says:

      I’m saying that if a company is going to be asked to compete against companies that have cheap at-home costs by comparison (doing, at least, much of the design work), then they need a cheap labor offset market to be able to compete, particularly given their legacy costs.

      Having big profits in China and India is a way to offset their competitive disadvantages here.

      Of course, the other option is universal healthcare and govt retirement plans. But that’s not going to happen soon enough to save Chrysler.

    • ThingsComeUndone says:

      Profitable car lines domestic or foreign hybrids or diesel oh wait we have no clean diesel fuel yet.

    • ThingsComeUndone says:

      He is right unless we get a real good plan to save the big three throwing money at the problem and trusting the big three to let market forces do the right thing is a loser.

  7. hackworth says:

    Chrysler dealer in New Smyrna, FL closed last Friday and moved inventory to the Chevy dealer. In this case, the dealerships are owned by the same corporation. Word is that they intend to sell Chryslers at the Chevy store. Signage is forthcoming. At the dealer level at least, Jeep was broken off of Chyrsler a few years ago. None of this has much to do with circumstances at the factory level. It is interesting to behold.

    It wasn’t too long ago that a dealer had to beg for the consent of the manufacturers in order to represent competitive product lines even at separate sales facilities.

    • emptywheel says:


      It’s really astounding how many dealers own multiple brands now–but it’s a way to hedge your bets. If Toyota is up and GM down, after all, you still do okay.

      I did a project last year (my last in the auto industry) comparing the operating costs of same-owner Toyota and Ford dealers. Fascinating stuff, really.

        • emptywheel says:

          I have been–obviously, a lot of what I’ve been saying is inflected by seeing that.

          Obviously, Toyota’s efficiencies extend to the dealer level, partly because their lines are simpler (easier to order, easier to handle rebates). Service on Toyotas used to be easier, bc Ford had more diesel trucks. But with the computerization of cars, that’s evening out quickly. And there are some seemingly no-brainer things like Toyota has done a better job with wiring their dealers so as to be able to use diagnostic laptops.

  8. Scarecrow says:

    Next question: the thrust of recent arguments here is that it would be a serious mistake (for the economy, for industrial base, etc), to allow the US auto industry to fail, and that bankruptcy (court-strutured reorg) is not viable, because 80% won’t buy from a company perceived to be failing, etc. However, does it make sense to make a separate case for Chrysler? Is allowing Chrysler to fail (or go into US receivership) acceptable, while keeping GM and Ford afloat?

    • emptywheel says:

      It’s less unacceptable.

      I do think it would create some real supply chain concerns, but nowhere near as unmanageable as what GM would cause.

      If you’re going to let Chrysler go under, though, you’d want to give Ford and GM more of a cushion. Hell, give them a bonus and make Toyota suffer as a result. Take that, Richard Shelby!!

      • dakine01 says:

        Unfortunately, if things are structured to give GM and Ford more of a cushion and hurt Toyota, I’d lay some odds that Mitch would come down on Toyota’s side, even though there are (probably) more constituents working for Ford and GM

        • ThingsComeUndone says:

          True thats why we bring up slave labor let Mitch defend that when workers are already angry about lost jobs.

        • greenwarrior says:

          why would we want to hurt toyota? they’re the ones making the cars with the best gas mileage. that’s better for us re global warming and better for us re wars in the middle east and better for us re how much we pay out for gas. so why would we want to hurt toyota?

          • emptywheel says:

            To even off the fact that the reason they can afford to do so is because they have been heavily subsidized? Or are you happy subsidizing companies that send their profits off shore and making sure that the technology we need in all phases of life to get off foreign oil is something we have to lease?

            And they’re also making big SUVs. Everyone in this country is incented to make big trucks, and everyone does it.

      • selise says:

        If you’re going to let Chrysler go under, though, you’d want to give Ford and GM more of a cushion. Hell, give them a bonus and make Toyota suffer as a result. Take that, Richard Shelby!!

        what are the implications wrt our wto agreements?

      • bigbrother says:

        1951 I was in Junior Highschool. My social sciences teacher was an economist…i never forget he opined theat the auto mobile had a very low true value.
        The impacts from the footprint to make it resource wise, the highway cost, the fuel rhen below 8 cents a gallon, the insuramce and finance cost make it a luxury. It enabled sprawl causing more impact. We need to wean of of it to a practical extent.
        The bailout money should be spent on mass transit.
        The bailout money should be spent on renewable energy if the biological species are to survive.
        Some of the most ruthless business people are auto dealers they are professional con artist and usury is their main tool of profit. That is why they have to glamourize their products and have huge advertising budgets. We need buses, light rail and minicars. This is extending the pain same as bailing gamblers on wall street.
        The glocal economy has made the US economy obsolete. We have to develop a new business plan. While that is occurring we need a security net for our population or all hell will break loose.

    • ThingsComeUndone says:

      No they should be forced to merge. If we were to convert all the big three’s cars to hybrids and big trucks to hybrid diesels assuming we get clean diesel fuel.
      Then Chrysler will have product that will sell Cerberus can come up with the cash to retool or they can sell Chrysler cheap and we can cover the costs.
      We need to agree on one hybrid tech and make it standard to lower costs for the big three imagine pistons all the same size less warehouse costs for differnt parts.
      We need to examine what tech we have now will be cheap enough to put into a car if we mass produce it.

    • selise says:

      i think the answer is no – at least for the short term… for the following reasons:

      1) unknown effects of supplier shock
      2) unknown effects on CDSs house of cards

      the first is an issue for the auto industry, the second for the financial industry.

      under normal circumstances, my answer would very likely not be the same. but these are not normal circumstances. but i don’t think this should be done as a one off. we desperately need a comprehensive and flexible approach. all this ad-hoc reactive bs seems crazy.

  9. ThingsComeUndone says:

    Trainees – mostly from China, Indonesia, the Philippines and Vietnam – are being exploited by companies desperate for low-cost workers to compete with China, lawyers and union officials say. TMC is a subcontractor for Tokai Craft, which makes parts for Toyota Motor and Nissan Motor.

    “This is slave labor and human trafficking,” said Ippei Torii, secretary general of the All United Workers Union in Tokyo, which helped Le.

    The TMC chairman, Masaru Morihira, declined to comment on the allegations, saying working conditions were set by the Toyota Technology Exchange Cooperative, a group that places trainees and procures materials, and had dispatched Vietnamese workers to TMC.


    Maybe we could help the big three by banning cars produced by slave labor after all they can’t hope to compete with those costs.
    That and it is the right thing to do the Dems are in charge now we should act like it!
    I’m ok with cars not produced by slave labor.

  10. Palli says:

    What would it take to nationalize Chrysler and turn its plants into a open laboratory for the engineering research and design, and prototype production of the new green products, cars, etc. A nation incubator for the new products of the future… willing and experienced workforce working together with inventors, scientists and designers.

    • bigbrother says:

      The comustion engine needs to be replaced. It is a major polluter and contributor to global warming/greehouse gasses.
      We need to stop the speedway mentality on freeeways that run at 80 to 90mph.
      Rewtool with alternative energy fuck big oil in return for the rip of of America fo 100 plus years,
      Anti trust laws need to break up the big cheesy monopolilies ans let samll business back in the economy.
      Union workers can build green. Come on emptywheel tell them to get with the program.

  11. TrulyLeft says:

    “Chrysler also doesn’t have the product development pipeline its domestic competitors do.”

    Now exactly, how do you know this to be so certain? I take exception to all this pontificating about the workings of the auto industry. After 34 years in the business, I’ve come to understand that there is alot to this business hidden from the public eye. And what about the import quotas that bind the Big 3 from selling product MADE HERE overseas? Your international “global reach” is pure BS. In fact, what has been helping Ford is selling some of its GLOBAL reach components and streamlining. Sorry, even headlining with Dan Quayle doesn’t negate reality.

    • emptywheel says:

      Um, from working in the industry?

      And working overseas in sales and marketing where you learn about the profit margins that are 10X what they are here?

  12. UnhyphenatedAmerican says:

    The little recognized fact about Quayle as VP was that he had an open door for all new ideas. There was apparently no other avenue for projects by the general public in the administration of Bush 41. I would not bet against his vantage point from being in office when tnere was such a closed door for opportunity. He may be quite well positioned at this point having capitalized on that which was placed in his lap with no place to go.

  13. YYSyd says:

    Chrysler is private equity. This is management for exclusive owners with no public advantage on the upside as shares do not trade. For this reason they should also be subject to being left to their own and fail. Let what assets there are be sold off. At rock bottom prices their brands, spare parts, even warranty exposure can be sold and still continue to be “serviced”.

  14. ltgra says:

    TOTAL energy efficiency in the automobile area.

    NO cars weighing over 500 pounds. Any size — maximum weight 500 pounds. Heavy cars rob and waste energy. They are unnecessary except when you are trying to protect yourself from another overweight vehicle. The size of the car could be as big as a Dodge caravan just so it weighted under 500 lbs. But it should hold four adults.

    No cars getting less than 100 miles to the gallon of fuel. Much easier to achieve with a light vehicle.

    Cars weighing over 500 pounds would have 5 years to be removed from any possible further use. I entertained the possibility of turning the cars into a border fence.

    Okay the plan needs some work in the electric car area. Batteries weigh a lot . So an electric car would have to be 500 lb. without the batteries. This puts it close to the tank category but electric cars are energy efficient.

    O.K. why do we love cars ? I am pretty sure that it is brain washing induced by Madison avenue. I know that seeing a rare old car on the road always makes me look twice in admiration. But they do represent a form of waste when they are out on the highway. All the gasoline wasted to go to car rallies are contributing to the shortening of the lives of mammals.

    No auto racing. No motorcycle racing , No airplane racing. no racing with precious fuel. Submarine racing would still be allowed. There are many other areas of waste that can be listed.

    This cannot happen without legislation. It simply would not work as an option . In fact that is the current status. The people who feel protective toward nature are doing what they can and feeling guilty because they would like to do more. The others do exactly the opposite and could care less.

    This scenario is doable, unfortunately it will not happen because people are conservative, they will not think long term. Global Warming is REAL- Al Gore has charted it.
    But unfortunately even he would not recommend going this far.

    We need to approach this like it was WWIII! If I could get Marcy Wheeler behind this instead of behind the big 2.5, she could make it a done deal.

    I Googled cars getting 100mi per gal and there was a lot of designs , and a few prototypes. VW has a tandem seat that looks like a corvette. 235mpg built, running and tested. But very expensive. Mechanics Illustrated designed one and Aptera has one in the 200 mi. per gal range and there were others like the man in Bellingham who got 100 mi. per gal on a trip from Bellingham to Portland.

    Unfortunately when they build these prototypes they are thinking in terms of current usage and consequently must build to withstand the impact of a tank in mind. Take the tanks off the road and many more materials become feasible. Expanded aluminum, wicker baskets, plastic wrap. The possibilities are wide and more varied than what is now accepted as possible. Wicker baskets were used for bodies on buggies in the horse and buggy days. I don’t know why corvette stopped using the fiber glass body, whether it was safety or cost but a very good material for strength and lightness.

    The interior should be no problemo a cellphone probably has all the electronics required. Seats are currently overbuilt to withstand huge vehicles plowing into you.

    The lighter the vehicle the lighter the necessary components. Brakes are lighter, tires are lighter, steering lighter , shocks lighter, Windows are a problem. They are heavy and an obstacle. Visibility is important for safety and enjoyment. They mentioned a polycarbonite that is lighter than glass in the Popular Mechanics article

    How about the economic impact. Lets see 330 million people 75 to 80 percent needing a new car in the next five years would be a strong business incentive. It is possible that 100 companies might jump in to design and build. It seems like the door is open for entrepreneurs the way the computer boom happened.

    Designing has already begun it is the legislation that has not been addressed

    • BayStateLibrul says:

      Count me in…
      If you own a SUV or gas guzzler, how about a tax penalty (a reverse
      Roth IRA) and house arrest to watch 2001-2008 Bush Odyssey?

  15. Loo Hoo. says:

    Raw Story.

    Sen. Richard Shelby (R-AL) denied allegations that he opposed a bailout for the Big Three auto makers in Detroit because he has an agenda to help foreign auto makers operating in his home state.

    Video included.

    • bell says:

      shelby has a history of denying allegations..

      >>Shelby, in his role as chairman of the Senate Committee on Banking, Housing, & Urban Affairs, opposed proposed bills that would have helped reform the title insurance industry and help reduce the costs homeowners pay, particularly when they refinance their mortgage.[6]

      Shelby earns between $100,000 and $1,000,000 per year from Tuscaloosa Title Co. Inc., a title insurer he founded in 1974.[7] His staff stated that his opposition to the bills is unrelated to his relationship with Tuscaloosa Title.

  16. cinnamonape says:

    Interesting that a hedge-fund based acquisition group devoted to “restructuring” firms they obtain…and then reselling them uses the Cerberus as its name. Does it use the hell-hound as a logo?

    And I found it interesting that ex-Treasury Secretary Snow is right there on the Board, as well as ex-Bush economic people..Havens, Hobbs and Smith. Could there be a reason that the current Treasury Secretary and the WH is so opposed to bailing out Chrysler? Just who would benefit from creating pressure on Chrysler…and can you bet that the bailout money of the surviving institutions will go into buying up the bankrupt firm?

    So Cerebus would get to buy this “asset” for nothing, would strip it down, make a huge profit from selling off any marketable remnants, then offer Ford up for sale. Thus they make billions from the txapayer (both for Ford and Chrysler bail-out money), cash from the sell-offs, and then even more cash when they get out of the auto-industry. Without any responsibility for making Ford any more fiscally sound that at the start of all of this!

  17. plunger says:

    Investment involves risk.

    Cerberus was stupid, acquiring an already failed car company, hoping to strip out any positive assets while selling of the car company to the next greater fool.

    The game was musical chairs, and the music stopped. They had become the greater fool.

    All of those who entrusted the likes of Cerberus with their money deserve to lose every penny.

    They were all seeking returns that sounded too good to be true, and their greed should not be rewarded.


  18. ferrarimanf355 says:

    I looked it up via the Wiki link earlier, it seems that Shelby is up for re-election in 2010. If he takes the auto industry down over his pettiness, he should be a sitting duck…

  19. joejoejoe says:

    I think it would be good if Congress could get the Chinese to buy Chrysler for one dollar with the pledge to make no job or wage cuts for a fixed period of time (say 5-10 years). I don’t care if the Chinese make cars in the US. Getting trade policy right can happen after we avoid a depression. I think in the short term a Chinese Chyrsler would be a healthy catalyst for the Big Two, a kind of do-over to the early 70s when the Japanese were building Civics and B210s that got 40 mpg and Ford was building Granadas.

    Why not structure a sale of Chrysler to the Chinese with some long term job and wage protections? What is better about taxpayers borrowing the money from the Chinese? Wouldn’t it be better for a Chinese automaker to manage the bailout of Chyrsler instead of Congress?

    • emptywheel says:

      Why would the Chinese do that? In particular, why would the Chinese agree to wait that long?

      Thy own us. They will be in the US sooner or later. But make no mistake, if we’re forced to compete with them while their wages are still as low as they are, neither the US nor the Japanese transplants will survive in their current shape.

      • joejoejoe says:

        It probably doesn’t make sense from the standpoint of the Chinese auto business but I thought it might make politcal sense on the US-China level. Doesn’t China need the US as a semi-thriving market to keep stable politically? Think of it as China splitting the costs of the US auto bailout in order to keep the US economy and dollar stable and getting a big favor or two in return.

        • emptywheel says:

          The point is that Dongfeng–or SAIC, in the case of GM–wants a US brand for one reason, primarily: to be able to import into the US market (the barrier right now is just that none of the Chinese brands would be viable in the US market–not high enough quality (though the partnered vehicles, so Buick made by SAIC, are much higher quality).

          So DOngfeng’s not buying Chrysler for parts and knowledge. Eventually it wants to import a Chinese assembled car to the US, probably in the short term. And that’ll be disruptive of the US market itself.

      • bobschacht says:

        What? You mean George W. didn’t actually sell his soul to the devil? He just sold us to the Chinese, in exchange for money to make war?

        Well, everything else has been commodified.

        What’s an American worth on the free market these days?

        Bob in HI

  20. BlueStateRedHead says:

    OT. But if anyone knows its EW.

    There is a diary on AL’s USA Alice Martin on Dkos. The Siegelman case, recused herself after 6 months except she didn’t etc. Martin.

    Been named one of the 10 worst prosecutors by a law firm in TX;;


    Which reminded me that I had wanted to ask if anyone keeps track of the fallen ‘angels’ of the DoJ. I would love to see a round up (metaphorically speaking for the moment) of where all the DOJ and WH staffers connected to the USA scandals are right now.

    Starting at the top. AGAG is unemployed, it took Harriet Meiers several months to get a gig, and if they are hurting, surely Monica Goodling and the other Rovelings must be.

    After all it’s naughty and nice time. Time for a little list.

  21. Loo Hoo. says:

    Looks like Darrell Issa is singlehandedly going to save the republican party.

    That, and run for governor in 2010!! I like the idea of his spending part of his $343 million on that.

    • phred says:

      You know I’ve been one among the chorus calling for more regulation of the financial markets, but holy crow what is the point, when there is no enforcement of the laws we have???

      FWIW, “I don’t know” is not an acceptable answer. I hope the state of FL has some sort of inspector general who can go through the records of the OFR and figure out why they let that sort of fraud slide.

      Jeebus, malfeasance everywhere you look. From the mortgage brokers to the bundlers to the private CDS investors making a killing in monopoly money (you know the kind, just because there are numbers on a piece of paper doesn’t mean it’s not make believe). Criminals and morons… and they are taking the rest of us down with them…

      • wavpeac says:

        Well, I know my little mortgage problem is small, but for how many years now have i been yelling “FIRE”!! No one cares about one person losing their house, and no one really believes that this person could be innocent and that these finance companies have behaved more like pirates that finance companies (at least in regard to minorities, women and the elderly).

        They have been stealing. Literally. Loan sharking but with less morals and no need to beat you up in a dark alley. They can do it under the law and in broad daylight.

        I fear that Obama is not going to be able to help me and the more than 1 million like me who have lost their homes, their credit and their hard earned money to these criminals. The class action loss suit won’t happen, because neither company has money.

        Yes, I want those working in the automotive industry to save their jobs, but I am still waiting for the story to make headlines that some 1 million people lost their homes due to the violation of finance and mortgage laws. And until someone cares about this issue, I do not think that the financial problems of the U.S will be solved.

        Look at the issue of credit. Americans have bad credit…too many of us. Some of that was greed, but I am willing to bet that many, many american’s got their bad credit due to these illegal practices but there is no one to stop it or investigate it or to get our credit back. So with so many americans no longer credit worthy…it seems to me this must be investigated so that those who were victimized by criminal behavior can get their credit back. So that we can finally see that this was CAUSED by the financial industry. It was all part of the gamble.

        There is so much corruption. I don’t mean to take the focus off the automotive industry but what happened to me and my mortgage is connected in some ways to the larger problem of “fraud” in the finance industry. It must be stopped and america will not rebound until it is.

        Ditech is advertising as I write this for mortgages. I pray for anyone who trusts them. The ad makes it sound so safe, and yet, not one thing has been put in place to stop the violations of RESPA and TILA laws that allowed them to put so many americans at knife point to make these horrendously high payments or lose it all. It’s like being held hostage. If you sell your house you can’t pay off the bogus fees and leave your home still owing them money. (what does that do to your credit?) and if you stay you are just held over a barrel year after year paying them the fees that are ever increasing. No one seems able or willing to stop them from holding me and 800,000 others in this way.

        • phred says:

          wavpeac, you’ve been talking about this for ages : ) And your problem is not small, it is simply part of the whole. There was big money to be made in derivatives at the high end of the market (the bazillionaire masters of the universe club), so who was going to look under the hood (evidently not Florida’s OFR) at the fraud and negligence that occurred at every step along the trickle-down food chain? The key was too keep money flowing as fast as possible: the fire-hose-up chain. It’s no wonder with trickle-down and fire-hose-up, that the many got screwed for the sake of the few.

      • prostratedragon says:

        You know I’ve been one among the chorus calling for more regulation of the financial markets, but holy crow what is the point, when there is no enforcement of the laws we have???

        This is the big point, I agree. Regulation without supervision and enforcement don’t mean squat, and the resources we devote to the latter are ludicrous in relation to the size of the problem. It’s why mere talk of regulation does not excite me.

  22. klynn says:

    I think these two realities are affecting the Chrysler side of the bailout. A Chinese electric battery maker coming to the US and Buffet invests in their electric car manufacturing…

    If I were Chyrsler, I would be partnering with this business option. No dealerships too.

    And Tata is moving forward. Chrysler should have tried to partner with ZPM…Maybe there is still time.

  23. klynn says:


    We also have Kia building a new plant in Georgia.

    Did you read this FAS report from 2006? It’s about China’s impact on the US automotive Industry. It is interesting.

  24. klynn says:

    Quite honestly, Chrysler could move the PT Cruiser, Sebring and the Town & Country to a combo CAV/electric technology.

  25. CasualObserver says:

    EW, glad that you’ve included the word “nationalization” in your considerations of the auto industry crisis. but why only in the context of Chrysler? Would be interested in knowing why you think Chrysler is, but GM is not, suitable for nationalization.

    • emptywheel says:

      I’m happy to nationalize GM, particularly since we really can’t justify nationalizing Chrysler unless we nationalize GM.

      It is more necessary, IMO, with Chrysler bc the most logical way out for Chrysler is to keep making the changes its making, then sell it to a company taht we think will keep the jobs where they are and won’t steal technology (Nissan-Renault is the best fit, but they don’t want to do it, at least not now). If we let Ceberus pocket bailout money and sell, we’ve rewarded their bad decisions and allowed them to sell to highest bidder (perhaps someone like Dongfeng) withotu us having a say.

  26. radiofreewill says:

    Wall Street Greed + K-Street Influence + Sexually Compromised Politicians

    = A Lucrative Way to Control America

    So, take down the Big Dog with his Own Sexual Dalliances, help put in the Depraved (and Likely Compromised) PNAC Ideologue Bush, and – After a “Pearl Harbor” Pokes Bush into Playing “W the Moslem Killer UE” – Steal All the Money until the Country is Too Broken to do anything about it.

    Now, that’s a plot worthy of the best of James Bond…and Bush would be just the right Perfect Dupe Sucker Player Proud Dumb Rich Guy to Walk Into the Casino at the beginning, wearing snake-skin boots, and thinking he had it All Figured Out…

  27. Mary says:

    OT – file this under “burying the lede”

    In a piece by Lichtblau and Risen titled, “Panel to Call for Review of Wiretapping of Scholar” way towards the end we get this info from the previously sealed transcript of an Oct hearing in front of Brinkema:

    The Justice Department has denied that it had any other evidence of eavesdropping against him other than what it turned over to his lawyers. But the federal judge in the case, Leonie M. Brinkema in Alexandria, Va., has expressed increasing annoyance over persistent questions about the N.S.A.’s possible role.

    In a recently unsealed transcript of an October closed-court hearing in the case, the judge stated that she believed that the government appeared to have committed violations of federal rules governing evidence and discovery.

  28. Leen says:

    Ew you are remarkable (but everyone here all ready knows that). Thanks for digging and explaining.

    When I was listening to the auto bailout hearings last week here in Dayton (auto land) Ohio I thought Richard Wagoner sounded like the most reasonable of the bunch. I still don’t get how these CEO’s salaries are decided upon. WTF there is not much of a difference between their salaries and the thieves on Wall Street.

    The other thing that is still getting under my skin is what congress and others keep referring to these “bailouts” as. First “bailouts” then ” rescue, investments, recovery plans” During the auto bailouts I keep hearing the term “restructuring” Some how we never heard that term or those demands during the Banking industries “Bailout, rescue, investment, recovery” plans. Will Wall Street be forced into “restructuring” as the auto industry is going to be forced to do? Funny what having friends in congress will do for you.

    The funniest thing I have heard anyone say about Dan Qualye as of late was when during the Presidential campaign when the MSM was (still it) Palin addicted someone on Hardball said somthing about Qualye’s run as V.P. and Chris Matthews said “I know Dan Qualye and Sarah Palin is no Dan Quayle”

  29. Leen says:

    “bailouts, rescues, investments(cough), recovery plans” and now “restructuring” for the auto companies. When will they “restructure” Wall Street?

    When will we hear the powers that be call it “corporate welfare”?

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