Monday, November 17, 2008

Sunday Morning Comin’ Down



This was John Kyl in October talking about using 80 skajillion dollars of my munnies to bail out



Lenders and Brokers and Baers, Oh My!

This was John Kyl yesterday morning on Faux News talking about using a scant 3% of that 80 skajillion to help backstop the American automobile industry.
Kyl: The business model of Big Auto is a failure. And when I say “business model”, I mean that the fucking unions are to blame. For everything.

Wallace: Well then what about a second economic stimulus?

Kyl: Where does the money come from? From the American people. You can borrow it and saddle future generations, or print more money and inflate the currency.

driftglass: Or you could roll back some more of those huge Republican tax breaks for billionaires…

Kyl: Stimulus packages never work.
Alright, pour yourself some cocoa and put your feet up, because we have to have a little talk about how the economy actually works. Starting with why people like Kyl who are getting their Milton Friedman Memorial Underoos in a bunch over the idea of lending money to Big Auto (from the NYT) --
Top Republican senators said Sunday they will oppose a Democratic plan to bail out Detroit automakers, calling the U.S. industry a “dinosaur” whose “day of reckoning” is coming. Their opposition raises serious doubts about whether the plan will pass in this week’s postelection session.

Democratic leaders want to use $25 billion of the $700 billion financial industry bailout to help General Motors, Ford Motor and Chrysler.
...

Mr. Kyl, the Senate’s second-ranking Republican, added, “Just giving them $25 billion doesn’t change anything. It just puts off for six months or so the day of reckoning.”
-- are at the same time so sanguine about lending 30 times that much to companies like AIG.

It's simple: Republicans love White Collar men who smell of freshly printed currency, and loathe Blue Collar folks who have to shower after their shift is over.

In both sectors, large numbers of upper manager were and are criminally incompetent and deserved to be perp-walked to the top of the national debt and defenestrated therefrom.

In both sectors, some of the compensation packages are out of line, but when you compare union deals across the board -- whose work rules and legacy contracts have been on a renegotiated-downward arc for the last 20 years – with, for example, AIG using half a billion dollars of my munnies money to wipe their asses?
"The $500 million plan would benefit the very AIG executives who led the firm to the brink of collapse. To reward executives with exorbitant paydays after poor performance, and to do so even indirectly with taxpayer dollars, strikes most Americans as fundamentally unfair and a misuse of their money."
Or banks using my munnies to pay out dividends and bonuses
“Instead of increasing lending to thaw out frozen credit markets, for example, some banks have bought other banks. Instead of using the capital infusion to modify home mortgages and prevent foreclosures, many lenders continue to pay out dividends. In some cases, banks participating in the bailout program have given large bonuses to some employees.”
It would be hard to understand why the same people bailing out Big Finance (with oversight and reform string attached) would freak out over bailing out Big Auto, until you remember the Republican's inbred, bone-deep contempt for working people, which reach a full-throated peak under the Reagan Administration and hasn’t abated one decibel since.

Which is why when Byron Dorgan replies to Kyl with:
It was no-holds-barred in shoving money at the fucking bankers, but how about a fraction of that money to help save American jobs. Take 3% of the 700 billion dollars. What about workers?
And
It’s about jobs; 350,000 directly and 3-5 million working on the industry indirectly.
He is making exactly the right points and asking exactly the right questions, but even he is undershooting the impact of manufacturing on the economy.

For your own future reference, these are the numbers Dorgan is referring to, compiled not by wild, Hippy anarchists but by the U.S. Chamber of Commerce:
“Directly and indirectly, the economic breadth and contribution of the U.S. automotive industry is deep and far reaching across the country. U.S. automakers directly employ approximately 355,000 American workers and indirectly employ nearly 5 million additional jobs through related industries that are dependent on auto manufacturing, sales, and related activities. Over the last two decades, the automotive industry has invested nearly a quarter of a trillion dollars in the U.S. and is among this country’s top industries for R&D spending. Automakers also are among the largest purchasers of U.S.-manufactured steel, aluminum, iron, copper, plastics, rubber, electronics, and computer chips.”
Bad enough, but pause for a moment to consider the secondary ripple-effect that all of those manufacturing jobs – from plant managers to suppliers to dealers – have, in turn, on their local economies:
Manufacturing directly employs 14 million America and supports 8 million more.

Each manufacturing job supports as many as four other jobs, providing a boost to local economies. For example, every 100 steel or every 100 auto jobs create between 400 and 500 new jobs in the rest of the economy. This contrasts with the retail sector, where every 100 jobs generate 94 new jobs elsewhere, and the personal and service sectors, where 100 jobs create 147 new jobs.
Yes, around 350,000 are directly affected, and 3-5 million people work supporting manufacturing indirectly, but you also have to factor in the effect on your local dry cleaner when the finishing plant shuts down. And what happens to the corner grocer or restaurant owner when their regulars -- the sixty people down the block who make gear-ratio widgets for windshield wiper assemblies -- are all out of a job?

You cannot build a healthy economy on hotel sheet folding and paper-hat gigs. On moving money around on spreadsheets. People can’t buy homes, send kids to college or retire in an America where the only employment left is working for WalMart and selling each other haircuts, manicures and chicken dinners.

There is nothing at all wrong with those jobs: they’re honest, and the labor of those who work in the service sector is at least as honorable as that of any banker or broker. But pretending the endgame for an economy based on enriching a few billionaires and pauperizing everyone else into a permanent wasteland of nothing but low wage, WalMart work is anything other than a blueprint for the coming Corporate Feudal State is delusional.

To sustain a vital Middle Class that can afford to travel, buy presents for their kids, eat out and get their nails done, first:

You.

Have.

To.

Make.

Things.

If you have been awake and aware for the last 20 years you know there has been a relentless barrage of bad news about manufacturing; some of it true and justified, and some of it just fucking ridiculous. So while it is true that a lot of old-time, low-skilled, repetitive jobs got shipped abroad, it is also true that
  1. The survivors in American manufacturing have gotten lean, efficient and technologically advanced.
  2. These days more companies are likely to die out for the lack of a succession plan than from competition from across the Rio Grande or Pacific Ocean,
  3. The industry suffers at least as much from 20-years-out-of-date bad press as bad management.
So if I hear Good Liberals like Thom Hartmann ranting one more time on Air America that “We don’t make anything in America anymore!” I’m afraid I’m gonna to have gather up some of those 1.7 million people whose jobs are made possible by the over 11,000 manufacturing companies right here in my own back yard and go’ splain some things to him.

Chicago-style.

Now take it one step further.

Ever wonder why the President Elect is so adamant that we have to do health care, education and green energy all at once?

Well, there are a lot of good, compassionate reasons for picking those three, but if your goal is to save the Middle Class from extinction, then you…
Enact health care reform…to take the burden of wildly-overpriced employer-based health-care off the backs of American business, in order to make them more competitive in the global marketplace.

Enact education reform…because the days of a million high-school drop outs making a Middle Class living pounding anvils and running lathes is over; because the new good jobs (and the prosperity of the nation) depends entirely on a skilled and adaptable labor force.

Pour real money into a green energy portfolio…first, because tethering your manufacturing and distribution systems to a variable like oil which is controlled by hostile foreign powers is suicidal. Second, because somebody’s gonna have to actually man-u-fac-ture the solar cells, fuels cells, windmills and so forth.
To pull us back from the feudal abyss, all these pistons (and more) need to be firing harmoniously in a 21st industrial engine powered by manufacturing.

Yes, the Big Three automakers have been run by short-sighted dolts with ridiculous business models.

So has the financial sector.

So shut up and fix them already. This is a country that turned our mind and muscle to the job of cranking out millions of jeeps and tanks and ships and blotted out the sun with fleets of aircraft when the world needed them to defeat fascism. So hire the best, fire the worst, hold people to account for realistic goals, and move on.

Or as Paul Krugman said (more or less) on “This Week” :
If these were normal times, I’d day let them [the Big Three auto companies] go bankrupt. I very reluctantly, screaming, agree with bailout. Because of the frozen credit markets Chapter 11 becomes Chapter 7, which means liquidation. Which means it all goes “boom”.
And
If this were 1999 and we had 4% unemployment, I’d agree with you. But it’s not.
This is a really bad time to be doing long-run, virtuous things.
Back on Fox News, John Kyl does magnanimously offer to save at least one man’s job:
We Republicans wuuuuv Holy Joe Lieberman. He was so helpful as a 5th columnist, character assassin and McCain testicle cozy. And we’re gonna need a new footstool now that Liddy Dole is gone.
On “Face the Nation” Republican Bobby Jindal makes some sense
Jindal: We need to stop defending corruption that we would never tolerate in the other Party. Stop defending out of control spending that we would never tolerate in the other Party. Offer real solution to real problems.
While Human Irritable Bowel Syndrome Gingrich opines that Sarah Palin was awesomeness incarnate who got unfairly slammed by the dirty Commies.

Back on “This Week” Cokie Roberts worries that “The Netroots could be mad” about Obama offering Hillary Clinton the Secretary of State position, while The Shrill One “can’t get excited about the Treasury. There’s not a hair’s-breadth of difference between the people on the list.”

Will: But you also have to agree that the Gummint that runs Amtrak is incompetent to do anything ever. Congress is designing cars! No one wants one ‘a them new-fangled electo-motive horseless carriages called the “Chevy Volt” anyway, which is why there is a $7,500 bribe written into the tax policy to get people to buy the consarn thing

Donaldson: Now how the fuck do you nobody will want a car that isn’t even hitting the market until 2010?

Shorter Will:
I miss my 

Stanley Steamer.


And

Sally Rand.

And debtor’s prisons.

Then Krugman absolutely flays poor George Will to ribbons when Will tries to revise Depression-era history to conform to his clenched-sphincter, laissez-faire Conservative dogma.

Will: The reason things got so very bad in the Depression was that the Gummint made things so unpredictable that no one wanted to invest anything.

Krugman: Uh….no (says the 2008 Nobel Prize winner in economics). That’s not how I read history and that’s not what happened. What happened was that when you had 20% unemployment and factories standing idle, no one wanted to build new ones. Dumbass.

Will then sat in the corner for the rest of the show, muttering angrily about Coolidge.

12 comments:

Stephen A said...

Of course when they are on the campaign trail the GOP is the best friend of the working man. (Well unlicensed, untrained, tax dodging scabs, but still...).

But when it comes time to divert a minuscule portion of the money pumping into the hands of elite bankers, no can do.

Yodood said...

The bailout of the auto industry is the very leverage needed to force them to retool for renewable energy sources, a three way bonus:yes to employment, no to pollution and oil dependence.

US Blues said...

yodood- spot on! These companies have exactly the know-how and resources we need right now to do what #44 has promised to do. The Perfect Storm for lot's of good reasons.

DG- now that you will have a little free time, can we sign you up to go on the TeeVee's (dying medium though it is) to lay smack down on mouth-breathers like Kyl and his ilk?

driftglass said...

yodood,
Exactly right.

us blues,
I didn't know one signed up to go on the teevee machine. Based on their advertising strategies, I assumed golden tickets hidden in bottles of Cialis were involved.

KnaveRupe said...

The Krugman takedown of George Will was beautiful. He showed the Willster as the know-nothing, bloviating asshat he's always been. Brought a tear to my eye, it did....

Don't expect to see ol' PK back on the Stephanopticon any time soon. I'm sure George W beat George S over the head with every seven-syllable word in his lexicon (and a few pithy baseball metaphors, to boot) after the show went off the air.

tfitz said...

Excellent post about the US Economy, manufacturing jobs, the position of the parties. Appreciate your insightful and clear analysis.

blader said...

krugman is just too fucking grounded in reality for the mouse circus

rotten mcdonald said...

blader is right. Manymore performances like that, and he won't be asked back, Nobel or not. You don't get to just noogie Bowtie Boy like that.

Suzan said...

Knaverupe, you rule! My thoughts exactly.

I'm sure George W beat George S over the head with every seven-syllable word in his lexicon (and a few pithy baseball metaphors, to boot) after the show went off the air.

I move that we call it This Weak from now on in honor of Prof. Krugman's asshat wiseardry.

Dg, such artfully congealed econometrics heretofore missing from the great conversation pervading blogtopianess - pure poetry. Bravo!

80 skajillion dollars of my munnies to bail out Lenders and Brokers and Baers, Oh My!

And when I say “business model”, I mean that the fucking unions are to blame. For everything.

people like Kyl who are getting their Milton Friedman Memorial Underoos in a bunch

on a renegotiated-downward arc

with oversight and reform string attached

until you remember the Republican's inbred, bone-deep contempt for working people, which reach a full-throated peak under the Reagan Administration and hasn’t abated one decibel since.

White Collar men who smell of freshly printed currency


Speaking of the incompetent white men who brought us to this peak financial moment with their billion-dollar profitable, minor-corollary-damage-murder-of-innocents wars, value-destroying arcane derivatives chat, off-shoring of decent jobs and devaluation of sweat labor - when will the widespread realization hit that it isn't possible this result was accidental or inadvertent?

The payoffs prove the point and the inertia of the taxpaying chumps at the bottom of the pile provides their final coup de grace (although it would present a more acceptable brand of justice (oh, if only) if Paulson's clueless gestures cure this condition). These men can figure and would have never been throwing around their own money if they couldn't. Perhaps a brilliant game for a while - until the payoffs are eliminated and the bills come personally due. But I'm a closet optimist.

Personally, I've always thought the words "Milton Friedman" were used as a magical incantation by people who never actually studied economics (they may have taken a course . . . .).

And money-down-the-AIG-rabbit-hole counts as a giveaway not a loan.

Well worth waiting for, Sir.

Now about finding that golden-ticketed bottle of Cialis . . . .

Suzan

P.S. Yes, Madeleine Albright is a man.

Myrtle June said...

I just love when Krugman talks like that.

Can't we please make it a national priority to relieve Arizona of BOTH of its dinosaur senators. Please? Wif a little sugar on top? It's no accident that big assed Meteor Crater is in Arizona.... 'cept it missed 'um.

Glen said...

"You have to make things."

You're showing your age: nobody makes things any more. We just move numbers around.

redoubt said...

Thanks for this. This Repug nonsense about going back to pre-Industrial Revolution days is over. (I'd be all for steam/interurban between Atlanta and its suburbs.)

Will got a baseball metaphor, all right: he tried to buzz Krugman up-and-in, and Krugman hit it onto the roof of the apartment building across Waveland Avenue. Krugman then went into a pigeon-toed, brown-eyed-handsome-man trot while Will slammed the rosin bag to the ground.