Republicans from George W. Bush to John Boehner want to grant immortality to Washington Mutual, Wachovia and AIG. They have decided to follow an earlier $25 billion loan with a $50 billion bailout, which would inevitably be followed by more billions later, because if these companies are not permitted to go bankrupt now, they never will be.
Oh wait...that was David Brooks, talking about what Democrats from Barack Obama to Nancy Pelosi want, with regard to General Motors, Chrysler, and Ford. But by all means, if it helps you get your outrage on, imagine that it were Republicans and banks...
13 comments:
People read LoC???
I'm just not all that comfortable with telling 1000s of workers to go suck it in an economy that's retracting while also losing an entire industry. The outrage is there, but can't you make a pretty good case for national interest?
The bail out has sucked so far, but it seems, to an uneducated reader but one who has a nimble vocabulary, that it has sucked in large part due to problems in how it has been administered - which would certainly be in keeping with the pattern of this presidency.
I know that you are sighing and rolling your eyes right now - and probably could blow this argument out of the water - and I'm all about listening to that. But I need to see it. And that post ain't it.
David Brooks still has a column? What about "Always Wrong" Bill Kristol?
Angry-wise, i just need to think about the ongoing Nationwide Bush Disaster...only two months to go!
Bankruptcy doesn't make the factories vanish and probably doesn't make the companies vanish (entirely). But it might make management vanish.
I don't have a complete argument, nor am I completely sure the bailout is a bad idea. And I think you're pretty thoughtful and not-too-partisan guy, Sarge. But my post is not intended to criticize the bailout so much as it is to question partisanship. If this exact plan with the same reasons/rationalizations had come from Republicans, LoC would have already covered it in shit. I understand that Bush sucks...got that by now. Does Pelosi suck?
I have a hard time reading the bailout as a Democratic plan. Dems voted for it at a higher percentage, but it wasn't an either-or partisan split. The administration was behind it too.
The big 3 have sucked for years now. Putting money into them now in the "hope" that they will come back is pouring money down the drain. Go to the third world and you'll see company after company after company that are being held up by the government and aren't making a profit. Just keeping people employed. Eventually those governments run out of money. Heck, we're borrowing to do what we're doing now.
We can't keep trusting the guys who have sucked up to now. The guys who run the govt, & the guys who run the big 3. Maybe one day we will find a way to punish the scumbags without hurting the workers. But I doubt we will.
Well, the Big 3 have been managed into the ground by "morans" for years, confident that they had a market cornered and beholden pretty much to them - innovation was a word so foreign to them they when you said "hybrid" they had vague thoughts of biology class. No doubt.
But wouldn't the bail-out come with conditions? Shouldn't it be administered to kind of prod the automakers into some productive thinking and wishcasting about what their future should look like? I was reading something by Mark Cuban or HuffPost about how their should be more money available to entrepreneurs in this bail out mode we're in, and I thought, that's kind of true - in the sense that we are basically propping up these industries and banks and making younger more savvy upstarts work against an unbeatable opponent, and in the process destroying any kind of positive change - but I'm wondering in the whole producing autos world where a Tucker might fit in so to speak.
I'm not happy about bailouts - and I think bailouts without any conditions could be disasterous, but I also think allowing them to fail would have huge consequences on all kinds of companies, many of them innovative and striving, who rely on the auto industries for contracts. I was thinking about this yesterday after I read Brigg's post - and opening the New York Times this morning I read Bob Herbert wondering the same thing.
As far as the other argument, that LoC only goes after Republicans...I imagine that will change at least a little bit now that the Democrats have some power to effect their plans (on my own blog, in one of my few posts there, I kind of wrote out some doubts I was having about Obama in early July). For the most part, the reason Democrats have been ignored here is because they've been irrelevant. And of course, some of it has to do with the fact that in many cases we are more sympathetic to their ideas, and so we'll accept some flaws in order to get some of what we hope will happen politically, and therefore are more likely to forgive things we might not forgive in people with whom we have larger disagreements. But when Dick Cheney has already done so much evil, should it not piss us off even a little that he insists on continuing to go against the Clean Air Act with an eye on gutting it? Even people who run power companies think it's a little weird.
It's a lot weird.
Of course, he could simply call it part of the bailout and it would be agonized over.
Not really.
Andrew, what is the use of a bunch of industries manufacturing parts or whatever for cars no one is willing to pay for? Those workers need to work on something people actually want! That way, we get things we actually want. Isn't that how one should evaluate the performance of an economy -- instead of by counting jobs or dollar bills?
I know that. I think GM and Ford have been absolutely moronic. I'm not disputing that.
They still don't get it, bragging about 30 mp/g when people want 40 and 50 and the endless numbers of brands for the same kinds of vehicles, etc.
But I still wonder how much more can happen before there's outright panic and before we slip too far.
I'm not arguing your point. I sympathize with it. Rewarding a banker or some moron management team in GM sticks in my craw - these people had all the vision of looters. They failed completely to build any kind of foundations for their institutions.
But what happens to what these workers want if they're let go in this market? I don't know what kind of impact a GM bankruptcy would have, obviously, but I don't know if would be a simple shrug.
It seems like there's been a flood and we're throwing sandbags at a lake.
I don't know if bailing them out is the right thing to do, and I know that letting them just take the money and run isn't going to do anything useful. But I don't know if Darwinism is the right approach right now. I'm kind of leaning toward probably not.
One thing that seems to be becoming apparent - this running around with different plans and different ideas every few days isn't working. This is going to take an odd sort of pragmatism, and probably no small amount of flexibility and imagination by some pretty partisan people on both sides. Which goes back to the post...
I'll tell you though, when even Jon Kyl is telling you that your management sucks and is a dinosaur, you've fucked up pretty bad. Heads should roll. And get some non-MBAs in there.
"outright panic", "we slip too far", "there's been a flood"
What exactly is meant by any of these? Are there people in the streets somewhere? Unemployment is not even to seven effing percent. Where is the disaster I've been reading so much about?
All of our mutual ignorance aside, I'm glad to know that handing the public's billions to whatever plutocrats are shameless enough to line up and ask for it is the opposite of "Darwinism". Under "Anti-Darwinism", I believe the connected will do a little better than mere survival...
If we don't do the bailout, won't we have $50 billion on hand for unemployment benefits if necessary? That's $25,000 each for two million people right there.
A couple things and then I'm going to have to stop.
Isn't the way we compute unemployment now kind of indexed so that the count actually dismisses many people from the count that would have been counted as recently as the mid '80s?
So comparisons to unemployment rates from a historical view need to be taken with some caution.
I'm definitely not advocating an ATM approach to the plutocrats open hands (not that it matters what I advocate). But, although it just might mean a matter of me adjusting to a newer world, the loss of a recognizably American auto industry might also mean some really difficult times not over six months for thousands of workers, but perhaps years. If we're going to let the beached whales of the American auto industry die, then we better have some kind plan to help re-start jobs in that part of the country. Whether it be massive tax breaks and subsidies for new technology companies or other American automakers, or biotechnology firms I have absolutely no idea - but as we don't seem to make much here anymore, what are these people going to be able to do? Or whether it's massive infrastructure rebuilding, a topic that seems to be floating around, I have no idea.
But I don't think it's a good idea to just write them off and say, well, they'll have to learn. After all, it's accidental, in the great scheme of things, that they were born in these towns and took their fathers' spots on the assembly lines - as for the other jobs lost in the snowball effect, those people will also be entering an economy where, while unemployment might not be at 12 or 15 percent, there is not much in the way of hiring. And that's going to get worse - state budget cuts coming up are going to mean job losses next year all over the country. There's a chance I won't have a job in New York City next year. It's not a small chance.
I do really defer to your expertise - I know you make good points. But wouldn't you agree that the number of foreclosures and bankruptcies over the last year have started to become a "flood" so to speak? Or that the volatility of the markets doesn't bespeak at least some uncertainty and perhaps a bit of panic? Isn't there some risk that this might boil over into something worse than it is now, when a lot of talking heads with the word "economist" next to their names talk about this being the biggest crisis since the Depression?
On a small point, I do hate using the word "Darwinism" outside of its scientific parameters, and regret using that word. It's inexact, and the connotation is simply too broad. It is a word like "unique," overused and frequently wrongly directed.
I wish you were in New York so we could sit around and talk! Peace.
To one of your points Sarge, Kevin Phillips has written about how unemployment and other "official" statistics have been "distorted beyond recognition" - one version is here.
'But wouldn't you agree that the number of foreclosures and bankruptcies over the last year have started to become a "flood" so to speak?'
My (perhaps seriously lacking) understanding is that very many of the foreclosures were on either (1) investors or (2) people who never should have been approved, i.e., people who should be happy they were able to live in a house they couldn't afford for six months. The (1)'s can take the hit and the (2)'s are essentially no worse off than they were before they got a loan for nothing.
Of course there were other foreclosures...let's stipulate that the number of 'real' foreclosures is above normal. I still don't understand how one fights a possibly-somewhat-larger-than-the-usual recession by throwing good money after bad. Where does investing billions in things no one wants get us, fundamentally? Nowhere.
"If we're going to let the beached whales of the American auto industry die, then we better have some kind plan to help re-start jobs in that part of the country."
A big "plan" to produce shit we don't want would quickly become part of the problem. There was an NYT piece this week about how foreign manufacturers will pick up part of the slack -- that's how a capitalist economy works, through *decentralized* planning in response to *consumer* demand (as opposed to centralized planning in response to producers' demands). Regarding the slack that doesn't get picked up, unemployment benefits could be extended and people could move. People SHOULD move. I've seen some of these places firsthand and I always think when I'm there that the people should have left a long time ago. McCain was right, those jobs aren't coming back. Move to where there's work. That's the American way.
Here's where you come in with a sad story about an aging guy who thought his factory job was forever and now he can't (read: won't?) be retrained et cetera. Are we doing him any favors by constructing an elaborate fantasy (spending OPM to do it) in which we all act as though he is still producing something people want? If he's on the dole, let's be open about it and not get confused about where the future of our economy lies.
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