Big 3 Bailout: Congress Does It Again

December 12, 2008 at 9:47 pm | Posted in Bush Administration, Congress, Economy, Politics | Leave a comment

The Senate, led by Republicans from Georgia, Alabama, and Tennessee, shot down the bailout plan approved by the house and backed by the White House, cutting off their noses to spite their faces. Apparently they couldn’t see beyond their noses anyway, or they would have seen that the bailout—effectively a bridge loan until the next session—is necessary to prevent an economic disaster.

If the Big 3 (well, the Big 2, since Ford seems to be more or less solvent) don’t have the cash to continue, Chapter 11 bankruptcy is the next best hope. Under Chapter 11, debtor-in-possession financing would mitigate the effects to some extent by providing capital while the automakers reorganize. But with the current credit crisis, who but the government would be able to provide that capital? And without it, they’re headed for the dread (I’m serious) Chapter 7: liquidation.

Imagine what would happen if GM and Chrysler liquidated:

Your GM or Chrysler product wouldn’t be worth what you paid to put air in your tires. The dealership would probably be out of business, and so would the corner auto parts place and tire store.

Hundreds (maybe thousands) of suppliers in every state would see a sudden, disastrous drop in revenue. Many would go bankrupt themselves, leaving the remaining (domestic and foreign) automakers with problems finding parts. Parts prices would go up, and quality would go down. The industries that supply the suppliers would suffer too: like the proverbial pebble in the pond, the ripples would go on and on.

With liquidations and other bankruptcies going on, jobs would be lost. Not just the union jobs held in such contempt by the Republicans, but white collar jobs, management jobs, and even CEO’s jobs would go down the drain. And not just Big 3 jobs: suppliers would either go out of business or cut jobs. So would their suppliers. And the millions upon millions of jobless would stop buying, driving retail stores of all kinds out of business—with a resulting further loss of jobs.

The economy would crash.

Why do the Republican members of the Senate want to block the bailout, if that’s the result? Partly because they haven’t thought it through, and partly because they are philosophically opposed to labor unions, and see an opportunity to destroy the UAW. Partly because they are philosophically opposed to government subsidies for business. They seem to have forgotten that Alabama, Georgia, South Carolina, and Tennessee have subsidized the foreign automakers to the tune of billions of dollars worth of “incentives.” And partly because they represent the states where those foreign automakers have their plants.

They want those non-union automakers to prosper. Fair enough: so do I. But they’re willing to bring down the major industry in the United States to do it. I wouldn’t agree with that even if their ideological stubbornness would work. But it won’t. It will destroy what’s left of our economy unless the Congress or (can you believe I’m saying this?) the White House does something major.

They had better do it soon!



December 12, 2008 at 9:05 am | Posted in Uncategorized | 1 Comment

3/14/99 – 12/11/08

I met her in the boonies south of Dallas. She was a “mistake:” Both parents were pedigreed; one, a Scottie, the other a Beagle. We thought she would be suitable, and when she eagerly and clumsily climbed into the car she grabbed my heart and never let it go. I thought, “she’s a fuzzy wumpus!”

She was, and it nearly became her name. Seldom graceful, frequently eager, she loved everybody. She chewed a few things, licked anybody who would hold still for it. She barked a lot too, talking to the birds who landed in her yard, the people who came to visit, to people we met on the street, to other dogs, to cats, and to squirrels. She loved to chase squirrels, but of course she never caught one. She wouldn’t have hurt it anyway: she just wanted to play.

Rosie’s first playmate was the cat we acquired shortly after coming home from Mary’s teaching tour in Europe. Both dog and cat were young, barely old enough to be away from their mothers, and they quickly became fast friends. Rosie, being a female, wanted to play Mama to Gil; she would try to pick him up by the neck to carry him around, but he was too big, so she dragged him around like an animated dust mop while he squalled loudly. We thought Rosie was hurting him, so we separated them. But Gil simply lay there, waiting for Rosie to come back and play some more. Sometimes, of course, Gill would be the aggressor: he would leap on Rosie’s back, and with jaws opened as wide as possible, would try to find a place to bite. To no avail: Rosie was just too much bigger than he was. But she would stand patiently while he tried his best.

They were a comedy team. So we named them Rosencrantz and Guildenstern, after the Shakespearean duo. Rosencrantz became Rosie, and Guildenstern became Gil. Rosie never lost her playfulness, her joy in life. She was a cute puppy, and she was cute all her life.

There was a pond in Carrollton, and we used to walk around it. It sometimes had ducks in it, and Rosie wanted to play with them so (never having been in the water) she ran toward them, finding out to her consternation that you can’t walk on that stuff and it gets you all wet. She made it back to shore—and never went into the water again. But later in life, when she saw ducks or geese around a pond, she would chase them furiously. It pissed them off, because although they didn’t know it, Rosie just wanted to play.

Rosie loved nothing more than going for a ride in the car. I took her with me when I did errands, and much of the time when we went for a walk it was somewhere we would drive to. She wanted the passenger window open so she could stick her head out and smell the passing scene. Her ears would fly like flags in a stiff breeze, the hair on her face would blow back, and she would lean eagerly forward. I think she was saying, “Faster, Daddy, go faster!” But of course if I went too fast she would pull her head in and look at me sadly.

I took her to places where I could let her off the leash so she could run freely. She did, chasing squirrels, ducks, and geese, baying as she followed scents, gorging on the remains of Big Macs and French fries. Sometimes she’d find a bit of spoor and roll in that, hoping to make herself smell like the prey. She would stop as soon as I told her that ladies shouldn’t wear too much perfume—but sometimes I didn’t catch her in time, so we kept a supply of Dog Wipes and used thousands of them. But rolling was not just a matter of putting on perfume. Rosie loved to roll in the grass just because it felt good, and few days went by when she didn’t have a good roll in the grass.

Rosie wanted to go where we went, but of course she sometimes couldn’t, so we invented a command. When we were ready to leave we’d tell her we were going bye-bye, and command her to wait. It was something to do to help prevent separation anxiety, and I guess it worked because she never did damage or had an “accident” while we were out. I’ve always wondered what she did while she was waiting. Maybe she was proud to be in charge of the house.

When we came back there was always an enthusiastic greeting. She would leap up to lick my face, panting and smiling, and—if I’d been away a long time—whining. She would nip at my nose, biting the part between my nostrils. Never hard enough to hurt, but enough to let me feel it. I always marveled at her accuracy!

We had rituals. They were important to Rosie, and in retrospect they were important to me too. When I first woke up I would sit on the side of the bed. Rosie would stand with her front legs on my thigh and lick my face. I would rub her head and face with the caresses she loved, and after a while I’d get up; she would go out, then come in and have her breakfast. Later, when we came back from the daily walk, she got a treat for good behavior. In the afternoon she had “tea,” consisting of an oat cracker, and in the evening she joined me for “dessert and coffee in the library.” She got another cracker and if I had something (like ice cream) she got to lick the dish. Of course there was always a little more than a mere lick in there.

Her joy in life constantly lifted me up. She was my constant companion. She was at my feet, or in my lap, or beside me (except for scent-following expeditions) almost every minute of every day of her life. She was my friend, somebody I could talk to when I hurt or when I was overjoyed about something, somebody I could play with, somebody who would help me any way she knew how. She was my baby, dependent on me, vulnerable, needing direction, sometimes rebellious but always daddy’s girl.

And now she’s gone. She was sick, and they could not cure her. But she passed away surrounded by our love, with the comfort of my hand giving her the familiar caresses. Her tail wagged to the end because we were there, and the last thing she heard was my voice….

Rosie is my sweetie-pie,
She’s my favorite woofer-hound,
She’s the apple of my eye,
‘Cause she’s the sweetest dog around.

Bail ‘Em Out—With Strings Attached

December 10, 2008 at 9:54 am | Posted in Uncategorized | Leave a comment

They’ve put together a bailout package, and it’s imperfect. It’s pretty bad. But it doesn’t matter because in a month we’ll have a new Congress and in six weeks we’ll have a President. Let’s go ahead and pass this package—bad as it is, it will stave off bankruptcy until we can do it right.

Why keep the Big 3 solvent? Corporations don’t stop operating because they’re bankrupt, they merely reorganize and move on. Look at the airline industry, whose members have been going bankrupt and reorganizing for years! But there are problems that make it difficult if not impossible for the auto industry to do likewise:

One is that the problems with the Big 3 are systemic and cultural, and we have to make sure that the system and the culture are changed drastically and appropriately. That takes more than a judge and some receivers.

Another problem is that if an automaker goes bankrupt all the education in the world is not going to get people to spend thousands of dollars on a product, hoping that the parts, the dealerships, the warranties, and the trade-in market will be there when they’re needed. Especially when there are Japanese, German, and other foreign automakers drooling for the business.

A third is that bankruptcy is a way of not paying your debts, or at least of not paying them fully. Just think how many suppliers would fail because GM’s debts were being paid at thirty cents on the dollar! And if suppliers fail, so do their suppliers…and the beat goes on.

The bailout package has to be considered a bridge loan program: we want our money back. It must keep the auto makers going until we can figure out exactly what it is that the Big Three must do to revive an industry and become good citizens.

While we’re waiting for January 20, the Congress ought to appoint a commission to make recommendations on how to restructure the auto industry. The commission ought to be composed of successful business managers and marketing specialists, but not auto industry people. They ought to treat the problem like a Harvard Business School case study. They ought to be encouraged to “think outside the box.” They ought to be willing to throw out the upper echelons of the Big Three companies, who have led their firms into this mess. They ought to study the corporate cultures and structures, corporate policies, relationships with dealers and suppliers, and relationships with labor.

Then they must put together a report explaining their recommendations, and present it to the new Congress and Administration. Our leaders in Washington must listen very carefully, then put together a new package with teeth in it that will put the industry on the road to success and get the taxpayers’ money back in the treasury.

Blog at
Entries and comments feeds.