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.

Where were you forty five years ago today? If you were old enough to remember at all, then you undoubtedly remember where you were on Friday November 22, 1963 at 12:30 pm central standard time.

I was at a desk, two from the rear, in the left most row, in Mrs. Hollingshead’s first grade class. Each kid had their own desk, and they were big, made out of solid wood and heavy. They had to be heavy, of course, because they were going to protect us when we ducked and covered from a Soviet nuclear strike. There were, as there were in most elementary school classrooms of the day, a large clock and a big speaker on the wall up above the teacher’s desk.

I can’t remember what subject we were working on, but the principal’s voice suddenly came over the loudspeaker. This alone meant there was something important up, because that only usually occurred for morning announcements at the start of the school day and for special occasions. The voice of Mr. Flake, the principal, was somber, halting and different; perhaps detached is the word. There was a prelude to the effect that this was a serious moment and that the teachers should make sure that all students were at their desks and that all, both young and old, were to pay attention.

There had occurred a tragic and shocking event that we all needed to know about. Out attention was required.

Then the hammer fell and our world literally caved in.

President John Fitzgerald Kennedy had been assassinated. Shot and killed in Dallas Texas. Then without a moment’s pause, we were told that the nation was safe, Vice-President Johnson was in charge, the government was functioning and that we need not have any concerns about our own safety. We were not at war.

Twenty four some odd little hearts stopped, plus one from Mrs. Hollingshead. You could literally feel the life being sucked out of the room like air lost to a vacuum. Many of us began looking out the window, because no matter what Mr. Flake said, if our President was dead, we were at war and the warheads were coming. They had to be in the sky. They were going to be there.

Unlike the hokey color coded terror alerts, ginned up fear mongering of Bush, Ashcroft and Tom Ridge, things were dead nuts serious at the height of the cold war. If President Kennedy had been killed, we were at war; the missiles were on their way. Had to be. Looking back, the school officials and teachers had to have been as devastated and afraid as we were, yet they were remarkable. They kept themselves in one piece, held us together, talked and comforted us into calm.

We had not been back in class from lunch break for long; it was still early afternoon in the west. Before the announcement was made, the decision by the school officials had been made to send us home. The busses would be lined up and ready to go in twenty minutes. Until then there would be a brief quiet period and then the teachers would talk to us and further calm the situation. Then off we would go to try to forge a path with our families, who would need us as much as we needed them.

Except for me and a handful of other kids. My mother was an educator and was not at home, so I and a few other similarly situated kids were kept at school until we could be picked up. Somehow it wasn’t right to be inside, so we all, along with another teacher, Mrs. Thomas, went outside and sat underneath a large palm tree in front of the school. We talked about how it could be that our President, our hero, our king, was dead. Maybe he wasn’t really dead, maybe it was all a mistake. Maybe Soviet troops were on their way; possibly tanks. This kind of excited me and the other boys; we perked up at this thought, tanks were cool. The Russians probably had awesome tanks. Each minute that passed made us feel a little better because there were no missiles in the sky. That was a good sign.

In about half an hour, maybe an hour, I don’t know any more, my mother drove up and off we went. My mother was also reassuring. It was good to be with her; mom saying it would all be alright meant a lot. Once home, we ate and sat dumbstruck and transfixed in front of the Curtis Mathes console television the rest of the afternoon and night. We watched Walter Cronkite on CBS and Chet Huntley and David Brinkley on NBC. These men were giants of news and journalism; to say that they don’t make them like that anymore is a understatement of untold proportion. Things slowly, but surely, stabilized; but it took awhile. A long while.

Well, that was my day forty five years ago. What was your day? Take a moment and reflect back and share with those of us that know the traumatic event, and help those who are younger to understand what the day was like. The palpable sorrow. The sinking, abiding fear. The comfort of teachers, friends and family.

There may be another Kennedy like figure in our midst, Barack Obama. He stands to assume office in a similarly, albeit it from different factors, troubled time. The world roils and America’s existence hangs in the lurch; not from Soviet missiles, but our own selfishness, avarice and stupidity. To draw a parallel, I have included the inaugural speech given by JFK (due to time restrictions of YouTube, it is in two parts). Once again, it is time for the citizens of this country to ask not what your country can do for you, but rather what you can do for your country. Let us do one other thing folks, let’s make sure this inspirational, young, vibrant leader, that we need so desperately to bring the voice and inspiration to get this country moving again – as we did with JFK – let’s make sure he doesn’t suffer the same fate.

It’s trash talk time again. And this week we have a great slate of games, so let’s get down to the nitty-gritty. I know, I know, we’ve got to get this guy out of our hair, but once again the world seems to revolve around randiego. You’ve got a dynamic blog owner, and a loyal janitor, and still the world revolves around a surfer dude from San Diego. Go figure. Must be teh Rio Grande Mud that Mr. and Mrs. Randiego are stuck in with their Texas Tech jones.

NCAA: The mondo game of the week is the Texas Tech Red Rayduhs of Lady Randiego versus the Oklahoma Sooners. This game is not just huge to our favorite surfers, this is, indeed, the biggest game of the week for the nation. Let’s take a look at the breakdown for the game courtesy of Fox Sports:

The biggest game in the nation, the Red Raiders are playing to reach the Big 12 championship game and possibly the national championship game, while an Oklahoma victory can throw the Big 12 South division into a tiebreaker scenario that would involve Texas Tech, Texas and Oklahoma. The Sooners have never been more explosive on offense than they are right now, gaining 674, 528, 508 and 653 yards, respectively, against Kansas, Kansas State, Nebraska and Texas A&M. The biggest difference has been a running game that’s taken off behind a line that’s once again living up to its preseason expectations. Chris Brown and DeMarco Murray have combined for 1,623 yards from the tailback position. At Texas Tech, everything seems to be fine-tuned in coach Mike Leach’s "Air Raid" offense. QB Graham Harrell is quickly approaching the 5,000-yard mark, WR Mike Crabtree is playing better than his Biletnikoff Award-winning season a year ago and the running game has never been stronger under Leach. Tech is averaging 132.6 yards per game (No. 73 in the nation). First won to 50 wins? Perhaps.

FAST FACTS: Red Raiders — The offensive line has yielded 15 sacks in a whopping 622 pass attempts. … The Raiders are one of five teams in the league with at least 20 sacks. … The offense is 48 of 58 on trips to the red zone. Of the 48 scores, 43 are touchdowns. Sooners — Lead the nation in scoring, averaging 51.4 points per game. … LB Travis Lewis ranks 10th nationally in tackles, registering 10.5 per game. … OU is 9-9 under Bob Stoops when playing higher ranked teams at home.

Sam Bradford is a very fine quarterback, and Bob Stoops always has a tough defense. But I think Graham Harrell, Michael Crabtree and teh Rayduhs de Rojo will rule the day in Norman. Sorry Freep, the Sooners are later.

This is kind of scary, but most of the rest of the good matchups are in the Big 10. Not sure what kind of alternate reality that puts us in, but there you have it. And of those, let’s face it, the biggest is still Michigan at the Ohio State University. Big Blue goes to the Big Horseshoe. Gonna have to vote with my heart instead of my head and root for the Wolvereenies. It has been a tough year on EW’s local gridiron scene. The Lions; well, good grief, they couldn’t be worse if Charlie Brown was their kicker and Lucy Van Pelt their holder. Then Big Blue has a far worse rebuilding year under Rich Rodriquez than anybody envisioned. So EW needs some pigskin cheer up there. Go Big Blue!

The other Big 10 tilt that is prime would be Michigan State at the Penn State JoePas. Should be a good game, hope it is not Paterno’s last game in Happy Valley. Also keep your eye on BYU at Utah; it is actually a very important game. BYU is tough, but if Utah gets by them, and Boise State wins out too, it is going to seriously screw with the BCS fatheads. Here’s hoping.

NFL: The game of the week is the J E T S Jets, Jets, Jets at masaccio’s Titans. Now this is an interesting clash. It is a Clash of the Titans, because, you see, the original name of the Jets in the old AFL was the Titans. So, there you go. Here’s the rundown:

Not so long ago, Brett Favre and Kerry Collins weren’t even expected to be starting this season. Now two of the NFL’s oldest and most experienced quarterbacks will square off in the most highly anticipated game of Week 12.
…
Collins has thrown for 519 yards with five touchdowns and one interception in road wins over Chicago and Jacksonville. He hadn’t thrown for 200 yards in any of his previous eight games, during which he totaled three TD passes and three interceptions.
…
Favre’s been able to rely more on the rushing attack, which has averaged 163.8 yards and scored eight touchdowns over the last five games. Thomas Jones tops the AFC with 854 rushing yards and will be seeking his third straight 100-yard game after running for 104 in a 34-31 overtime win over New England last week.
…
Favre will be challenged by a Titans defense which has given up the fewest points in the league, is tied for second with 15 interceptions and ranks third in the AFC with 28 sacks – 10 in the last three weeks. Star defensive tackleAlbert Haynesworth has seven sacks and keys a defense which has allowed one 100-yard rusher all season.

You know where I’m going. That is exactly right, I am picking the Titans all the way baby.

The second big game of the week, and it is almost surreal to say this, involves the Arizona Cardinals. Crikey, this must be an alternate reality. The Gents are coming to town to hook up with the Cards in teh Big Toaster. The Giants at 9-1 and the Cards at 7-3 are arguably the two best teams in the NFC and this should be a whale of a game. Kurt Warner is literally have another MVP caliber season, and it is no joke that Larry Fitzgerald and Anquan Boldin are the best receiving pair in the league. If you haven’t seen much of these two, take a gander, they are something special. Then there is Bad Eli. Manning that is. Don’t know if y’all are aware of this or not, but EW ain’t really a fan of the Manning brothers. Any of them. Must have something to do with the Pats, I dunno. It’s not like they have beaten the Pats out of the championship, first one brother, then the other or anything. Oh, wait…. Cards are really tough at home and are starting to really look good. I’m taking them in an upset. Jeebus I know I’ll regret betting on the damn Cards. Oh well.

Next, we have the Pats at the Fish. This is arguably as big a game as the first two. Both teams are 6-4, but the Dolphins are 2-1 in division play while the Patriots are 2-2. In their first meeting of the season, the Dolphins blew out the Patriots at Foxboro by 25 points; this game looks to be much different. If the Dolphins can manage to pull out a win, they will really have the inside track for a playoff berth and the Patriots will be hurting. The Pats won’t be fooled by the Dolphins wildcat formation this time and will win easily.

Okay that brings up the last game on this week’s review list. That would be the Colts visiting the Chargers. Now it’s a good thing that I was able to pick the Patriots over the Dolphins, because much to Marcy’s chagrin this game involves another one of those evil Manning brothers. And, boy is she going to hate this, it looks to me like the Colts are going to turn the Bolts home into Peyton’s Place. There just isn’t much to say here except that the old Norval Turner, that we all know and love, is back in all his glory; and that, combined with a couple of big injuries have left the San Diego SuperChargers in a world of hurt. But other teams manage to pull together past key injuries (read Cassell and the Pats still putting up a show without Brady, Harrison and Thomas), but the Bolts have tanked. That’s Norval folks. colts win this and keep their surge toward the playoffs on track (not Palin).

Epilogue: First off, the video today is from that L’il Old Band From Texas. It is a live version from 2003 of Just Got Paid Today from ZZ Top’s first second (h/t Bell) album, Rio Grande Mud. The bearded boys can still crank. This video, Francine, is what I had in mind when I set out today, but this is a family blog (Great video but very brief, maybe 6-8 seconds of semi-nudity) so I let discretion be the better part of rock and roll valor.

Secondly, a bittersweet farewell to a true all time great in sport. A woman who dominated her sport arguably like no other, the female Tiger Woods, has played her last match. Annika Sorenstam. Annika was maybe, for a four or five year period, the most dominant golfer on the planet; no less than Tiger Woods made that statement. Sorenstam is the only female golfer in history to have shot a sub-60 round in competition and finishes off with ten major titles and 72 LPGA victories for her career. She was the individual NCAA champion as a freshman at the University of Arizona. Her 90 international tournament wins as a professional make her the female golfer with the most in history. Best of all, she was one of the classiest people ever. Cheers Annika, best of luck and thanks for the memories.

Nancy and Harry wrote Mulally, Wagoner, and Nardelli with instructions on how they should re-do their homework assignment, to be turned in on December 2.

Congress is prepared to consider additional legislation that would give the assistance you seek, provided that you submit a credible restructuring plan that results in a viable industry, with quality jobs, and economic opportunity for the 21st century while protecting taxpayer investments.

In order for Congress to act in a timely manner, this plan must be presented to Congress by December 2nd, specifically to Senate Banking Committee Chairman Christopher Dodd and Financial Services Committee Chairman Barney Frank.

Most of their instructions are what you’d expect: guarantees of transparency and guarantees that taxpayers won’t get screwed if the companies go under.

Provide a forthright, documented assessment of the auto companies’ current operating cash position, short-term liquidity needs to continue operations as a going-concern, and how they will meet the financing needs associated with the plan to ensure the companies’ long-term viability as they retool for the future;

Provide varying estimates of the terms of the loan requested with varying assumptions including that of automobile sales at current rates, at slightly improved rates, and at worse rates;

Provide for specific measures designed to ensure transparency and accountability, including regular reporting to, and information-sharing with, any federal government oversight mechanisms established to safeguard taxpayer investments;

Protect taxpayers by granting the most senior status for any government loans provided, ensuring that taxpayers get paid back first;

Assure that taxpayers benefit as corporate conditions improve and shareholder value increases through the provision of warrants or other mechanisms;

Bar the payment of dividends and excessive executive compensation, including bonuses and golden parachutes by companies receiving taxpayer assistance;

[snip]

Require that government loans be immediately callable if long-term plan benchmarks are not met

There’s the predictable requirement that the car companies meet their CAFE obligations.

Demonstrate the auto companies’ ability to achieve the fuel efficiency requirements set forth in the Energy Independence and Security Act of 2007, and become a long-term global leader in the production of energy-efficient advanced technology vehicles;

And then there’s this requirement, which they don’t really explain, but which speaks volumes.

Include proposals to address the payment of health care and pension obligations; 

Ah, the payment of health care and pension obligations. It seems we’ve been talking about those things a bit around here. Funny thing is, through two whole days of hearings on the woes of the auto industry, nobody really wanted to talk about those things. Because, of course, the payment of health care and pension obligations is the one thing–the big thing–that still makes the Big Two and a Half uncompetitive as compared to their competitors. It’s also the thing that separates us from other advanced nations, which subsidize these things and would refuse to allow an entire industry to be wiped out because of these things. And, with the big payments into the UAW’s health care fund coming up, it’s a looming payment that no one seemed to want to talk about at the hearings. Until this homework assignment.

Frankly, I don’t know what Nancy and Harry and Barney and Chris expect to get in response to this particular line item. A proposal for universal health care? An expanded social security system (because, with the stock market down 50% in the last year, we know that 401Ks don’t work as advertised)? A beg for a bailout of these two items? Maybe the demand for a gas tax that would go toward paying off pension benefits?

I’m working on answers to the rest of these questions. But jeebus, how does an industry being killed by its legacy costs propose to fix that?

I’m working on a post describing what I think the Big Two and a Half ought to propose on December 2 when they drive their hybrids to DC (in lieu of flying) to beg for money again. As part of that, I will suggest that they ask Congress to levy a stiff gas tax. But since I am getting into more and more discussions with environmentalists who want any bailout to be tied to increased CAFE standards, I’m going to lay out why I think a tax is much better than increased CAFE standards for everyone.

Why CAFE Standards Suck at Achieving their Goal

I’m going to start with the assumption that the goal of CAFE standards is to force auto manufacturers to build more environmentally efficient cars (arguably that’s not what it was originally intended to do). It does so with brute force regulation that does not, at the same time, change the actual market-wide interest (or not) in environmental efficiency.

Until gas reached $4 plus this summer (and things are returning–though haven’t entirely returned–to where they were now that gas has gotten cheaper again), people calculated "energy efficiency" into their considerations when buying a car in terms of cost of ownership–that is, as one factor among others: how much the car cost, how much monthly loan payments would be, how much maintenance cost, how much insurance cost, and how much gas to run the car cost (this is reflected by the stickers dealers use to sell their cars, which usually describe efficiency both in terms of MPG but also in terms of year gas costs). For most people, efficiency is still a cost issue, and not a benefit per se.

Now consider how that will factor into the choice of a vehicle. For a lot of people, all those cost calculations will be less important than perceived safety or utility arguments. So if having something that feels like a tank is really important to you, you’re going to buy something that feels like a tank and only then consider how much it’ll cost you to run your psuedo-tank. The cost calculations will weigh, overall, much less in your consideration.

But if cost of ownership is your primary consideration, then you’re going to look at the cheapest cars that meet your basic needs, and pick which one is actually cheapest to run. And so long as energy efficiency remains one cost calculation among others, when people choose to buy based on cost of ownership, you can bet they’re going to be choosing to forgo a bunch of other bells and whistles–things like upgraded radios or fancy interiors or navigation devices or things like that–precisely the kinds of bells and whistles that contribute to higher profit margins on cars. In other words, for consumers who are looking at cost of ownership, chances are very good that they’re looking for cheap (which, for the auto industry, means low profit margins).

What you don’t have, in this calculation, are very many consumers who are interested in environmental efficiency and are willing to pay more for it the way a pseudo-tank driver will pay more to feel powerful on the road. As of May–at a time when rising gas prices were already affecting consumer choices–hybrids made up 2.2 percent of the US market. (I realize this grossly undercounts the people who value energy efficiency, but it’s a fair measure of the people who will pay 10% to 25% more solely for efficiency and environmental cache.) That was when gas averaged $3.76 a gallon; it’s down to $2.02 a gallon. And manufacturers are still selling those hybrids at a loss or with slim profits, so while those 2.2 percent of consumers will certainly spend more to have an energy efficient car, manufacturers aren’t necessarily making more.

All things being equal, the market suggests that manufacturers make their energy efficient cars cheaply and their gas guzzlers more expensively, because consumers buy energy efficient cars because they’re cheap to own, whereas consumers buy trucks or SUVs or sports car because some other feature: speed or pseudo-tank or utility. And so long as gas is cheap, that will remain true.

And CAFE standards don’t change this equation at all. They force manufacturers to make more of those cheap energy efficient cars to get their fleet-wide averages down (which cuts into their profitability). And, to some extent, make those cars more palatable to less price-sensitive consumers by adding in things like air bags. But because CAFE standards don’t change the market calculations of consumers, CAFE standards don’t make energy efficiency more valuable to consumers. CAFE standards basically force manufacturers to put costs into their cars that–unlike, say, safety, for which there has been a dramatic increase of value over the years–consumers don’t value. Even while the costs of energy efficiency went down over time, those were still costs with little market value, and therefore costs that cut into the profitability of cars in the short term.

Of course, the increase of gas prices this year dramatically changed that. Fairly quickly (measured, at least, in terms of an industry that things in terms of 3-year cycles), people decided the utility-based reasons they invented for needing a full-sized pickup were less important reasons than getting a car they could afford to drive. All of a sudden, the percentage of people who valued energy efficiency spiked way, way higher than just the people who could buy a hybrid.

This meant that a lot more people who would pay for the bells and whistles that contribute to a profitable car sale also wanted a car that got very good gas mileage.

A Good Gas Tax

One good way to get auto makers to make super-efficient cars and allow them to remain profitable is to ensure that market conditions continue to value energy efficiency as a benefit unto itself, above any consideration of cost of ownership. And one way to do that is to ensure that gas prices remain high enough–with the kind of stability and predictability that would drive 3-year product cycle calculations–such that consumers continue to place energy efficiency at the forefront of their decision-making about new cars.

You could do this by imposing a gas tax that would keep gas prices up at levels that make energy efficiency a leading factor in choosing cars. Make it a big gas tax, maybe a dollar a gallon, so that the value of energy efficiency remains where it was in August. (Obviously, phase it in, but even at a dollar a gallon gas would still be cheaper than where it was in August.) And use it as a revenue source to accomplish a number of things you need to do to enhance energy efficiency all around.

1. Retire US auto pension debt
2. Continually invest to help all US manufactuers (incl Toyota and Honda and Tesla) retool to meet higher standards (ha! Richard SHelby, got you some cash, I did!!)
3. Invest in public transportation
4. Invest in infrastructure
5. Give credits to middle and working class people to pay their gas bills
6. Give credits to middle and working class people to get out of their gas guzzler and into something efficient
7. As part of 6, implement a recycling program designed to meet European requirements on recycling, which will simultaneously get gas guzzlers off the road while also creating a new green economy

Retiring auto pension debt

Use some gas tax proceeds to help the American car companies become more competitive by eliminating the biggest remaining budget item that they pay that their Japanese competitors don’t pay. The more you free up the pension debt with a dedicated tax, the more the American car companies can invest in new technology and–just as importantly–the less chance there is that the Pension Benefit Guarantee Corporation has to pick up that pension obligation.

Continual investment to help all US manufactuers (incl Toyota and Honda and Tesla) retool to meet higher standards

Rather than offer one-time $25 billion packages, a gas tax could fund an ongoing investment fund, both for manufacturers of all kinds (including transplants and smaller manufacturers like Tesla) invest in production. It might also fund a general fund for technology, that would result in technologies that any manufacturer could implement.

Invest in public transportation

Goes without saying.

Invest in infrastructure 

Also goes without saying–but also addresses an ongoing problem in that decreased driving has cut into the tax-based road fund as it is. Some of this could go to pay for plug-in and/or hydrogen infrastructure.

Credits for middle class and working class people

These credits would serve to do two things. In the very short term, it would help people pay for the higher gas prices, so there were some offset of the tax for those who genuinely couldn’t afford it (but obviously not a total offset, since you still need to change the valuation of efficiency). At the same time, part of the revenues from the tax could pay for a program that got people out of old clunkers and into new, efficient cars.  (Obviously, this would stimulate the kind of good production we want manufacturers to focus on). This way, you’d increase efficiency in the short term, and keep the customer base at dealers up.

Credits for recycling

But you don’t junk those clunkers. Instead, you have the manufacturers dispose of them, with the expectation that they salvage everything possible as materials (that is, no sales of big engines, but you can sell the steel). You spend some of the funds to offset the costs of a recycling program aiming to match the European standard, with the expectation that new cars would begin to have to meet these standards. Thus, in addition to the credits for new efficient cars, the tax would also lead to a support of a vehicle recycling program. 

Ari links to a Barry Ritholtz post reporting that President-elect Obama is considering a pre-packaged bankruptcy for the Big Two and a Half (presumably just for the one and a half that are GM and Chrysler, as Ford is not yet at that point). Ritholtz (who undoubtedly knows more about the economy than me) declares this plan a winner.

Smart:

[snip]

This remains the best option IMO for Detroit . . .

Barry? President-Elect Barry? Be careful of what you wish for.

Bankruptcy is a positively genius idea, except for the ways it isn’t a genius idea.

Bankruptcy Would Allow the Big Two and Half to Renege on Pension Claims

The first thing bankruptcy would allow the Big Two and a Half to do is get out of their overwhelming obligation to pay retirees’ pensions. That would, instantly, eliminate one of the biggest remaining competitive disadvantages between American manufacturers and the Japanese and would therefore make a lot of unprofitable car lines profitable, almost immediately. 

Voila! GM can now compete with the Camry.

However, the Pension Benefit Guarantee Company would then pick up those pension obligations. Rather than giving the auto companies the money, you’d be paying it directly to the retirees. But taxpayers would still pay.

Bankruptcy Would Allow the Big Two and a Half to Break Dealer Contracts

A far more important advantage–from a competitive/restructuring standpoint–is that it would allow the manufacturers to break their contracts with a bunch of dealers. This would allow the manufacturers to shed dealers almost immediately, with the salutary effect that dealers in the same town wouldn’t be competing for the same customer, and therefore would be less tempted to make big cuts in the price of the car to keep a customer. This would, in turn, have the effect of restoring much of the value of the brand that is currently lost in the never-ending festival of rebates. And it would raise the profit on every car sold.

Furthermore, by breaking dealer contracts, the Big Two and a Half could change the profit model of dealers, such that they expect a one-time profit to sell the car itself, rather than a lifetime of service opportunities for each client. The Big Two and a Half are going to have to do this anyway to move away from the combustion engine (though that change is far down the road). So why not make that change now–move away from the entire dealer-network concept of marketing a car?

Of course, those contractual changes would have two effects. First, if you shed one third to a half of the 10,000 dealers spread out across the country, you’re going to have a lot of people out of work suddenly–in towns and cities pretty evenly spread out across the country. Those people are going to be drawing on government benefits while they look for another job–if they can find one. You’re also going to have dealers with a bunch of debt on their hands, but no business to help them pay off their debt (as opposed to the current method of shedding dealers, in which the dealers get an upside in the process). Again, that’s going to affect the economy across the country. And finally, once the dealers do move away from a service-based profit model, you’re going to find a lot of highly skilled mechanics working for smaller entities, in many cases with more marginal jobs. They’ll find new jobs easily enough, I guess–until we move to electric cars, someone will have to service the cars we’ve got. But they may give up a deal of security and prosperity with the move.

Bankruptcy Would Allow the Big Two and a Half to Miss Its VEBA Payments

One of the reasons the Big Two and a Half are so cash strapped right now is that they are due to pay the UAW installments on their big one-time payments next year (this is not immediate, but it is a looming cost). If they miss those payments, presumably the union wouldn’t have the cash to fund the health care fund–designated to provide health care for the UAW retirees, particularly those between the age of 48 and 85 who are not yet eligible for Medicare. If those retirees lose their healthcare, they’re either going to have to go without healthcare or, depending on other factors, they’re going to go on Medicaid.

Bankruptcy Would Allow the Big Two and a Half to Break the Union

Ah, breaking the union. Every bankruptcy advocate’s wet dream. 

If the Big Two and a Half went bankrupt, you would break the union, renegotiating existing contracts, presumably by cutting the skilled workers’ pay, but not raising the second tier of workers negotiated in the last contract. This would (because the second UAW tier is actually much lower than the Toyota or Honda tier) actually bring labor costs down below those of the Japanese rivals, again making smaller more efficient cars much more profitable overnight.

Maybe those skilled workers will muddle through. Maybe you’ll see a big increase in credit defaults and individual bankruptcy as people try to adjust to dramatically smaller salaries.

Sure, you might sacrifice safety at the plants. Sure you might even sacrifice some of the quality in the plants. 

And golly, if you’re a President-elect who just won the Mid-West–including Indiana, for chrissakes!!–largely with the help of the UAW, you’d be facing big electoral problems.

But it’d accomplish something that the union has already set into place to accomplish, evening out the pay disparity between the Big Two and a Half and their Japanese competitors.

Now, as you can see, there’s a lot to like in a bankruptcy, as it would allow the Big Two and a Half to do immediately some things they’re doing more slowly (evening out wage disparities and shedding dealers) or not yet doing (reneging on pension guarantees and health care promises). Of course, you’d be doing that at a time when such an immediate shock to the system might well be the shock we’re all trying to avoid with a Big Two and a Half collapse. And you’d also accelerate the process by which the federal government picks up some of these costs, but in a way that has little upside for the economy.

[Note, this was a bit flip–I invite those of you who work in bankruptcy to straighten out my misconceptions.]

Getting snooped on by Verizon employees…

Some Verizon Wireless employees accessed billing records from a cell phone President-elect Barack Obama had used, the Obama transition and Verizon Wireless said Thursday.

[snip]

Verizon Wireless CEO Lowell McAdam issued a statement apologizing to Obama. He also said that whether they were authorized or not, the employees who breached the president-elect’s account face possible disciplinary action and were immediately put on leave without pay. [my emphasis]

I’m sorry, Mr. McAdam. Are you suggesting these Verizon employees may have been authorized to access Obama’s records? By whom?

I’m preparing my Book Salon review for James Bamford’s Shadow Factory right now. (Bamford will be at FDL Sunday at 5PM ET.) And his story of Verizon’s Israeli-connected spooky side is way more troubling than the already troubling AT&T Israeli-connected spooky side.

Update: The CNN story on this makes it sound like the authorized v. unauthorized question pertains more to whether people had any business with Obama’s call records. Also note it says those involved were suspended with pay.

Verizon Wireless, meanwhile, has launched an internal probe to determine whether Obama’s information was simply shared among employees or whether "the information of our customer had in any way been compromised outside our company, and this investigation continues," McAdam said in an internal company e-mail obtained by CNN.

"Employees with legitimate business needs for access will be returned to their positions, while employees who have accessed the account improperly and without legitimate business justification will face appropriate disciplinary action," McAdam said, "up to and including termination." [my emphasis]

China Hand’s got a great post describing the biggest difference between GM and Toyota–the health care they pay workers (or not) in their home country. The argument (click through to read it) that GM had to cede the sedan market is one that accords with discussions about business models I’ve had.

 Some excerpts:

Assume that a bridge loan to help the Big Three weather the downturn is going to happen, perhaps when the current crop of congresscritters has left Washington and the bailout can be hung around the neck of the Democrats and the Obama administration.

Maybe in February, we can have a serious discussion about fundamental problems and systemic solutions.

And the whole debate might not hinge on greedy unions, electric cars, CAFÉ standards, on brain transplants for auto executives.

It should be about national health care.

A key difference between GM and Toyota isn’t unions.

It’s national health care in their home markets.

[snip]

The interesting little secret about Toyota is that, like GM, its home base operations are not especially profitable, even with the health care subsidy.

Japan is an expensive place to have a factory. When bonuses are factored in, Toyota and GM workers both make yearly incomes in the $60,000 range.

Even with massive exports of Japan-built cars, the Japanese operations account for about 1/3 of global profits while posting 50% of worldwide sales.

In the first quarter of FY 2006, Toyota’s home operations brought in about US$1 billion of its total profits of $3.23 billion.

That’s roughly what GM was paying per quarter on retirees’ health care.

Read the whole thing.

With all the commotion and hubbub surrounding the personalities and gossip of Obama’s cabinet formation, and expression of everyone’s opinion on how that should proceed, little has been said about the actual policies and actions (other than Iraq) that should be implemented right out of the gate. One area that has been neglected is that of the illegal wiretapping and surveillance policies and practices that were instituted in the country’s name by the Cheney/Bush regime.

Our friends at the Electronic Frontier Foundation (EFF) have some ideas for the incoming Obama Administration in this regard, and they are pretty good.

President Obama can end the immunity process. Consistent with his previous opposition to immunity — then-Senator Obama voted in favor of Senator Dodd’s amendment to strip the immunity provisions out of the FAA altogether — Obama could instruct his new Attorney General to withdraw the government’s motion to dismiss the lawsuits based on the immunity statute. Or,

President Obama can temporarily freeze the immunity process until he has learned all the details about the NSA program. Consistent with his support of Senator Bingaman’s proposed FAA amendment to delay implementation of the immunity provisions, Obama could instruct his new Attorney General to ask the court for a temporary stay of the immunity proceedings. That would give the Administration time to review the classified details of the NSA program as well as the FAA-mandated reports about the program that are expected by this July from the Inspectors General of the Department of Justice, the NSA, and other agencies involved in the program. After having reviewed all the facts, the new administration can then re-evaluate whether it wants to continue to press for immunity in court, or drop its motion to dismiss and let the cases against the telecoms continue. Or,

President Obama can choose not to appeal if the immunity statute is found unconstitutional. If, after the hearing on December 2nd, Chief Judge Vaughn Walker of the federal Northern District of California agrees with EFF that the immunity statute is unconstitutional and denies the government’s motion to dismiss, Obama could instruct his new Attorney General to not appeal that decision to the Ninth Circuit Court of Appeals.

All of these are things Obama could do — on his own and without any help from Congress — to stop the implementation of the immunity scheme that he repeatedly opposed during his presidential campaign.

These recommendations aren’t EFF’s alone: as part of the transition roadmap published yesterday by a broad coalition of groups including EFF, seventeen different civil liberties organizations signed onto national security surveillance recommendations that included the proposition that President Obama should "[d]irect the Attorney General to withdraw the government’s motion to dismiss pending privacy litigation brought against telecommunications carriers for assisting with unlawful warrantless surveillance, or seek a stay of those proceedings until such time as the Attorney General, based on review of the Inspectors’ General reports required by the FISA Amendments Act, determines that a grant of immunity is appropriate."

We at EFF — along with many of Obama’s supporters — were sorely disappointed when he failed to uphold his promise to filibuster any bill that contained immunity, and instead reversed course and ultimately voted for passage of the FAA. But, as Obama himself said when defending his support for the FAA:

This was not an easy call for me. I know that the FISA bill that passed the House is far from perfect. I wouldn’t have drafted the legislation like this, and it does not resolve all of the concerns that we have about President Bush’s abuse of executive power. It grants retroactive immunity to telecommunications companies that may have violated the law by cooperating with the Bush Administration’s program of warrantless wiretapping. This potentially weakens the deterrent effect of the law and removes an important tool for the American people to demand accountability for past abuses. That’s why I support striking Title II from the bill, and will work with Chris Dodd, Jeff Bingaman and others in an effort to remove this provision in the Senate.

As we all know, those efforts to amend the FAA by stripping immunity out of the bill or delaying its implementation failed, despite Obama’s support. But now, as President, Obama will have the power to make things right. By taking one of the above steps after he takes office on January 20th, Obama would prove that he meant what he said when he opposed telecom immunity, that he stands behind the votes he made against immunity, and that his claims of a coming "change" when it comes to reversing the Bush Administration’s excesses are more than empty rhetoric.

If Obama truly supports change — if he truly supports a more open and accountable federal government, where Americans have the tools to demand accountability for past abuses — then he should end the Bush Administration’s attempt to cover-up lawbreaking by the NSA and its telecom collaborators, and ensure that the judicial branch is finally allowed to rule on the legality of NSA program.

Some decent points. I would like to add a couple. The Obama DOJ could flat out withdraw allegations of "state secrets" in any instance that has been pled and is not absolutely necessary to national security. By what I can tell, that is going to be most of the cases. In a corollary, the Obama DOJ could declassify and otherwise release information and documentation that the Bush Administration wrongfully classified to brazenly obstruct justice and prevent plaintiff’s abilities to establish standing and the prima facie burden for their suits.

In short, the Obama could reset the table so that the scales of lady justice are able to find their own natural balance, as they were designed and intended to do.

However, for all of those that think this will be an easy call for Obama and his DOJ, it will not. There will be a lot of pushback from intelligence and DOJ personnel that were involved in the Bush/Cheney programs, there will some instances where there really are operational details that must be protected and, quite significantly, there is the issue of liability for damages. Yes, money is a big time consideration. The potential for damage liability could extend into the billions. It is a factor, and there is a very fair chance that the government is on the hook for most all of it, not the telcos. In the financial straits this country is in, do not discount that as a factor.

In short, there are many things that Barack Obama can do to right the wrongs of the Bush/Cheney administration on illegal surveillance and, specifically, on the imposition of retroactive immunity by the Bushies and a complicit (near criminally) Democratic Congressional Leadership. But will he do it? Time will tell.

It is time to lead, President-to-be Obama, and to do so for the right instead of from the right. Remind us what it is like to have an American Government that does the right thing instead of the politically expedient thing. Please.

Lots of people are posting this YouTube, but no one, as far as I’ve seen, has contextualized it.

This seemingly organized snub took place, after all, at the end of the attempt on the part of the G20 to find some global solutions to our present economic crisis. The snub occurred after Bush welcomed his guests with a radio address pre-empting some of the demands those guests were making.

This is a decisive moment for the global economy. In the wake of the financial crisis voices from the left and right are equating the free enterprise system with greed, exploitation, and failure. It is true that this crisis included failures by lenders and borrowers, by financial firms, by governments and independent regulators. But the crisis was not a failure of the free market system. And the answer is not to try to reinvent that system. It is to fix the problems we face, make the reforms we need, and move forward with the free market principles that have delivered prosperity and hope to people around the world. [my emphasis]

And the snub came during a summit in which Bush championed the adoption of a passage in the Declaration that came out of the summit that, once again, insisted the free market was working fine (this could have–and probably did–come straight out of Administration statements leading up to the summit).

12.  We recognize that these reforms will only be successful if grounded in a commitment to free market principles, including the rule of law, respect for private property, open trade and investment, competitive markets, and efficient, effectively regulated financial systems.  These principles are essential to economic growth and prosperity and have lifted millions out of poverty, and have significantly raised the global standard of living.  Recognizing the necessity to improve financial sector regulation, we must avoid over-regulation that would hamper economic growth and exacerbate the contraction of capital flows, including to developing countries.

And the snub came after the rejection of international regulation to control those purportedly functional free markets.

8.  In addition to the actions taken above, we will implement reforms that will strengthen financial markets and regulatory regimes so as to avoid future crises.  Regulation is first and foremost the responsibility of national regulators who constitute the first line of defense against market instability.

This meeting should have been the foundation of a new Bretton Woods–the start of new cooperation to prevent the kind of meltdown we’re seeing. But Bush–a dead-ender to the last–refuses to see the catastrophe in front of him, and certainly refuses to work with others to solve the world’s economic crisis.

No wonder they wouldn’t shake his hand.