The Big Three

Way to be up to the minute with the news Kilgore. This isn't exactly breaking news but I think it is something we need to take a few deep breaths and really think about before we make our own personal decision.

So here is my take on it. We as a society first need to cast aside our cold war views of the world and realize that you don't need to cower in fear at the word socialism. But currently we doing this fucked up mix of socialism and capitalism where we give a little bit to the bottom rung that has been left behind under capitalism, and we've taken away all risk to the very top levels by promising not to let them fail. It's like going to a casino and being told at the door that if you lose enough then you'll be recouped for your losses, by the taxpayers.

So to me we have a few options. The first is do the capitalist thing. Let them fail. Especially Chrysler, we've already bailed them out once. Using that as an example theres two ways to look at it. One is to say, "see that bailout worked, we saved Chrysler before and they turned around, we can do it again." Or you can say, "Because we bailed them out before they did not fix the inherent flaws in their business model and they never will so long as we continue to protect them." Lets just stick with the capitalist view, Milton Friedman and shit, it's not the governments job to run a business. The Government can regulate but it cannot mettle in the internal affairs of business. Friedman doesn't even want regulation but thats just stupid. So if these companies can get the loans the want and need from banks then go ahead. If the banks say these companies are too much of a risk then why the hell should the taxpayer take that risk? Oh sure go ahead and blame the fact that the banks are fucked too. Lassez-Faire bitches! Will this cause further problems, oh hell yeah it will, were talking millions of jobs for sure further sinking the economy and will probably be another domino that leads us into an old school depression. I'd really be curious what old Milton would say right now, he'd probably blame the impending doom on government regulations, claiming that if everyone had simply continued their shortsighted quest for ever increasing profits then none of this ever would have happened. Of course we also wouldn't have glaciers anymore and we'd really be running low on oil but who cares the economy would be booming! Were going to do something for them, so lets just forget about this pipe dream of pure capitalism and move on.

Socialist view. Don't bailout the companies, buy them out, or just nationalize them. The problem with this is that our government is not set up to deal with trying to directly run a business. I've gotten distracted by the news of the guys at Gitmo pleading for death. I'll talk about that next once I learn a bit more about it. But as much as my socialist leanings thing we should just buyout the companies and create like US motors or something. Make them produce cars that don't suck. Pay the workers what they deserve but cut out those non-producers at the unions. Theres no point in a union if your whole company is socialized anyway. Then there are all the obvious other problems with a socialist workforce.

UPDATE: I fucking hate blogger. I obviously wasn't finished with this, so I wanted to save it as a draft. Which means fighting with their stupid ass captcha program, no idea why you need to do that to save as a draft but then after the eighty seventh try (possible exaggeration) it works. Today I hop on and there it is published. Oh well. Ill try to finish it now.

I really don't see this country going the socialist route so I'm not going to bother expanding on that any further. And now that the House has passed a $14 Billion bailout. I find it very curious that the Republicans are blocking this. My first reaction is that, hey they've gone back to the ideology that once put them into power, fiscal conservation less spending and whatnot. They did oppose the big bailout, but wait they jumped on board once they added that extra little 150 billion in pork. So maybe this isn't about saving the country money. The cynic in me has a sneaking suspicion that the republican party might be so suddenly anti-spending because the spending might just might work. But see if they go along with it and it fails then they're culpable too, and they went against what they claim is their ideology. If they go against it, and it works then they'll spin it to somehow, but they perfect situation for them is to go against it, but the dems get it passed and it still fails to fix shit. Then they can gloat, Obama isn't the hero and they have a chance to become relevant again. Am I really so cynical that I think the republican party is so concerned with their own power that they will allow the country to crumble just to regain power.... after 8 years of bush. In a word. Yes. Yes I do.

So what do I think should be done? I guess we do need to bail the idiots out, but with massive forced changes. The first step I would take, and I have a distinct feeling that some of my liberal friends will balk at this, is to kick out the UAW. The union is one major reason why Toyota can turn a profit on a car built in the USA while paying a good wage and none of the big three can. I'll admit that I'm biased here but I just don't see much good in unions and I see huge negatives. So now the workers are getting paid based on ability, now lets look at the suits. Hey guess what, if you're at the top of any of the big three you might want to get a resume ready. And seeing as you're getting paid based on ability lets look at you're record. Oh my you had to beg the government to keep from closing up shop, guess what you don't get shit. If you fuck up a burger at Micky Dee's and get shit canned for you're incompetence you don't get a fucking severance package you get shit canned. If you lead a company with no foresight into the future, focus solely on building at-the-time-profitable SUV's while the rest of the worlds auto companies worked on fuel efficiency and alternative energy sources. To be fair the big three did put in some lame attempts at this stuff as well, GM build the first modern electric car back in the 90's with the EV1. It wasn't perfect but it was a good starting point for future automotive generations. So what did GM do? They took back all of them at the end of the leases, wouldn't allow owners to buyout the leases and then destroyed the vehicles. To me that sounds like an effort to placate their critics and nothing more. It absolutely wasn't a large market, especially at the time, but if they had worked on this technology they would be at the forefront of the hybrid/electric movement, instead of trying to create hybrid versions of full size SUV's which they brag about getting 20 mpg! GM could be selling a tiny electric city car and a more average sized electric, and all sorts of other hybrids and stuff for those who travel long distances on a regular basis. I mean realistically theres only a few times a year I drive outside the range of an electric in a given day. Shit. Need to stay on target with this. Another thing GM need to do is drop about half of its product lines. They could save millions just on all the different emblems they make for the same vehicles. Drop Buick, thats an easy one. Drop GMC trucks, they're chevy's. Use a model like Toyota. They have their normal brand, Toyota, they have a luxury line, Lexus, and they have a cheap/kids line Scion. Caddy is going to be their Luxury line, Chevy will be the normal line and Saturn as the cheap/kids line, or Pontiac I don't care, yeah actually keep Pontiac drop Saturn. See the difference is that the Big Three are all conglomerates of historic old brands and theres going to be a lot of people hurt whenever they kill a brand. I bet some people were even upset when they killed Olds. Hummer is just stupid, kill that shit off. Saab was a funky company but now they're just Chevy's, Opel's or Subaru's, I can't see it being worth it. Anyway you get the point.

I honestly don't think the government has the ability to try to control the day to day operations of any of these bailout corporations. What I want to see is those with ability to be rewarded in appropriate proportion to said ability. If you're the best assembly line worker you should get paid accordingly, if you get the minimum done then you get paid accordingly. Same exact thing for the suits. I'm still a firm believer in narrowing the gap between the top and bottom of a corporation, which isn't to say equal. Sure the people who spent years and tens of thousands of dollars in college to learn a specialized skill set deserve more than those who just went to high school, at least to start. If you've been working on the line for a long time and are really good then you'll end up making more than some young guy with a bachelors working in accounting. I'm assuming you get what I'm saying, a sensible pay scale for everyone. The bottom rung is a living wage and the top is very comfortable indeed, but without being stupid. The guy at the top is not worth 400 times more than the person at the bottom.

All that said there is one glaring problem wiht my plan and I want to admit itbefore I get called out for it. If you only pay the brass what they're actually worth, and not what their ego's claim their worth then you're probably not going to be able to get the very best people for each position. Until the entire corporate world gets on board then you might be in trouble. That said they are on the brink of collapse begging the government to spare them so "trouble" is a very relative thing.

I, like John McCain,

have no idea how the economy works. (did I fool you for a sec?) Which is fine for a guy who has no significant debt and about a hundred bucks in the bank, its not ok for the next president who it would appear is going to be handed the largest financial crisis since the great one. The real point of that is to reiterate that I don't have any background in economics at all, theres a significant portion of the pretty basic terminology that I simply smile and nod at.

Now that I have that out of the way, again, I'll get to my point. Apparently right before the fail of the bail the fed pumped a few hundred billion into the banking system. There's a few different numbers on here but it sounds like they increased cash to the banks by 300 billion to bring it up to either 450 or 630 billion, by trading with other national banks. Seems a little weird to me that they wanted the taxpayers to shell out 700 billion if the fed still had the ability to do that on its own. Of course the article also says that the Fed's "balance sheet is about to explode." I don't know much about this shit, but I'm pretty sure that if the Federal Reserve gets in financial trouble then we're in serious trouble.

The roof
the roof
the roof is on fire
but we don't need no water
let the motherfucker burn
burn motherfucker
burn

-Bloodhound Gang

Underground Government Boxing Clubs

In death a member of project mayhem has a name, and his name is Henry Paulson.
- Fight Club (almost)

I've thought this over a bit and I do think the bailout is a bad idea, but for very different reasons than most. I don't know if the bailout will fix our economic problems, if it works how everyone hopes it will then it'll save our asses, and by doing so will perpetuate a system that simply cannot survive in the long term. They have these great ads right now that talk about how we have 60 years worth of oil offshore that congress isn't allowing us to tap. It's supposed to encourage us to tap that oil, to me it is just a perfect example of how short minded a people we are. It's only 60 years worth of oil, shit, we've only really been using oil on a large scale for 100 and look how much we've fucked shit up. Back to my point. I think not bailing out these companies might well lead to a crisis serious enough that we are then given the opportunity to rebuild a system that can last. I'm not sure what that system will look like, will it be a minor change like a third way between socialism and capitalism where hard work allows for limited inequality. Or are we looking at a true collapse of the system as we know it, maybe we will revert back to a more agricultural world that can actually live within our means, but I highly doubt that outcome.

But at the same time I say fuck it, the rich wanted laissez-faire capitalism and with partial deregulation they managed to royally fuck themselves. Greed is not the motivator we should use to run our entire lives, and greed is what drives capitalism, call it drive or motivation or whatever, its still greed. Greed is a good motivator don't get me wrong, but we cannot allow it to be the only motivator.

So Wall Street crumbles, many many businesses fail, how do we rebuild? What lessons have we learned? What will our new vision of the world look like? I don't know, but I'm curious to find out. Fuck the Bailout! I want to see the next great revolution, then again the bailout might only delay the revolution for a few years anyway.

Will the Bailout Work?

I hate to get sucked into this like everyone else but it seems like one of the few times recently where the news of the week legitimately should be the news of the week. It sounds like they're getting called out pretty hard for the lack of oversight, now ever Paulson admits that oversight in necessary, so that probably going to happen. Thats probably the second most critical part of this whole thing. Unfortunately the most important part is much harder to know, is it even going to work? What happens if we invest a trillion dollars and the companies still go belly up? The first question no one really knows the answer to because we don't ave time machines, the second question on the other hand has a pretty easy answer, and we all know it, we're fucked.

Like I said I don't expect to get a straight answer from anyone on whither or not this will work, but I'd like to find some differing opinions from some good sources.

Here's one that lays out what needs to be included, I guess the assumption (to be fair I haven't finished reading it) is that if all these things are done then it should work. Oh and the things that need to be done, regulate regulate and regulate.

Heres a little from the BBC, I always like to see what those outside our borders think.

Forbes is going to look at this from a little different perspective but it's a lot of comments by lawmakers so really not that different, but this quote is pretty amazing.

In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.

"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."

Which is why Chuck Shummer is pointing out that the plan is to spend about $50B a month, we all know were trying to navigate uncharted waters so why not give like $150 billion and then see where we are in three months, why write another huge blank check? Wow, how fucked up are we when we can actually say things like, lets start with a more reasonable number, say A HUNDRED AND FUCKING FIFTY BILLION DOLLARS!

I do find it amusing, the fiscal conservative who once controlled the republican party are up in arms because it's socialism, the fiscal liberals are up in arms because it's socialism for the rich paid for by the rest. A little bit of socialism isn't a bad thing, but make sure your protecting the weak, not the powerful who fucked up. It should be noted that many of these articles have mentioned that the senators are getting lots of phone calls and almost no one is in favor.

Somewhere and now I've lost the link there was mention of how some Exec's refused to cooperate with provisions that they must take a 10% loss. To me thats easy, either eat the loss for the year, get a huge influx of money from the government and try to rebuild your company under new regulations, pay back your debt to the Gov with interest, and then continue on as a business. Or go bankrupt. If they think the that they should automatically turn a profit after getting their asses saved by the very people they have fucked then they can suck my left nut. They're standing on a collapsing building, trying on their golden parachute and complaining that the cords are silver instead of platinum. I'm about ready to say fuck it all, even if it plunges us into a modern great depression these capitalist fucks need to feel the pain. This is the free market, they wanted fewer regulations, they got them, they did exactly what you would expect and it failed. Lets not forget that

Oh and to tie this in with the election, how come no one is bringing up McCain's involvement with the Keating Five Scandal?

Grrrrr......

So much shit is going on right now.

Some interesting shit at this site, might have to save that blog for later....
Phil lays into McCain for his stance on science, and "science".
To no surprise there's all sorts of shit being talked over at D.Kos, I mean who else would get pissed about a little rocket fuel in their water? Although this one was interesting and fairly unexpected. They also had a classic in their pundit round up , meaning the folks at Kos got it from Bob Herbert.

Does anyone think it’s just a little weird to be stampeded into a $700 billion solution to the worst financial crisis since the Great Depression by the very people who brought us the worst financial crisis since the Great Depression?

How about a second opinion?

Good Call Bob. Basically for me, I don't know about this whole thing, the longer I think about it the worse it sounds. My Gov teacher last night couldn't help but repeatedly point out that were talking about a bill for 700 billion dollars, and the bill is three pages long. THREE!?!?

I need to run because... well actually cause I want to write another quick post that should be a wee bit more upbeat, which seems like the better way to end the day.

Holy Shit Batman

I get more than a little worried when Bush says he needs a bill passed in a hurry. He's already in fear monger mode, if the democrats don't pass this law immediately then we're all screwed. Well were all in trouble anyway so maybe we should take a second a breath, lets make sure the bill is actually going to help the situation. Lets make sure that those who have fucked our economy up aren't going to be getting millions for their failures, the reality is that it won't make any significant difference, but its very important for the moral of the country not to allow these people to reap huge rewards off our taxes. Most importantly though lets make sure that those who are in control of this are accountable. They seriously have a provision in this bill saying that the unelected treasury department cannot be reviewed by congress or the courts. Thomas Jefferson would be whippin' Bush's ass right now. Even Alexander Hamilton would be like, woah, thats a little crazy, and I knew Arron Burr so I know crazy - fucker shot me. (sorry history class kicking in)

Luckily it sounds like congress is going to try to do it job, it should be noted (time for Gov class) that the Legislative branch is NOT designed to be efficient. It's an intentionally slow process, they had this wacky notion that some thought should go into new laws. There needs to be back and forth, compromises must be hammered out and that takes time. Congress is not supposed to ebb and flow with the whims of the masses, it must keep its head clear of short term worries and focus on the long term good of the country. The Wars and the Patriot act should be good enough examples of why Congress needs to be more concerned with writing good bills than getting them out quickly.

“It would not be understandable if members of Congress sought to use this emergency legislation to pass unrelated provisions, or to insist on provisions that would undermine the effectiveness of the plan

To use a phrase I never thought I would, I agree with Bush (Ahhhhh!!!) that congress shouldn't use this emergency bill to try to pass unrelated shit. I honestly don't think anyone will. But his part about undermining the effectiveness is the important part, does accountability decrease effectiveness? Only if your goal is to rob the American people. I really don't think that statement is crazy either, I'm honestly afraid that this is going to turn into an even bigger swindle of taxpayers money for the profit of the super rich than the Wars. Honestly how else can you explain this provision, which I mentioned before.

"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

That shit needs to go, fuck everything else that needs to go.
Ugh, well I need some grub. If you want better info heres some links.
USNews.com lots and lots of info and links
Crooks and Liars, lots of info and a heavy bias
The Rude Pundit, some info, a heavy bias, lots of swearing but by the end you be in agreement.

Congress, bailouts, and other economic shit

The other day I was at a friends house watching some TV. We're watching some news channel talk about the stock market free-fall and all the financial problems. How were facing the biggest economic crisis since the great depression, and then he switches back to ESPN and the headline is about how "Congress rips the Yankees." I couldn't help but laugh.

Although actually we then switched to another channel so I didn't know what they were talking about and now that I do it wasn't such a waste of time as it sounded. Turns out the Yankees were trying to get taxpayers to foot a big part of the bill for their new stadium. Uh, fuck that. Why should my tax money be used to build a stadium for a private business? Particularly outrageous when that private company is as rich as George Steinbrener and the Yankees.

Why is it that when the government tries to help people in need its "creeping socialism" but when the same government gives handouts to huge corporations trying to increase their profits, its economic stimulus, and for the greater good of the community? Hypocrites, they wanted de-regulation, they got it, now that its failed as miserably as we expected it too they should pay the price. Fuck 'em, they were happy to rake in the benefits they can't complain when they lose it all. Except of course there is the legitimate point that allowing them all to fail will cause even bigger problems.

The way I see it is that we shouldn't bail out these companies, we should invest. The stock isn't worth shit cause they are on the verge of collapse. So the government buys a shit load of stock, maybe even for a little more than its current market value. The important part to me is that rather than take our tax money and simply give it to a failing company and hope for the best the government now has some say in the company. (I think this is basically what happened with Fannie and Freddie) More importantly as the company gets back on its feet and starts turning a profit I don't want to see the tax payers simply paid back, I want to see some fucking return on our investment. We gave them 85 billion, I want to see 100 back. I don't see this as greedy, at least not any greedier than any other investor is, and why should we be treated any different?

Oh and this sounds interesting, I don't know business or economics but apparently the Gov allowed five corporations to avoid some of the usual regulations.

Who were the five that received this special exemption? You won't be surprised to learn that they were Goldman, Merrill, Lehman, Bear Stearns, and Morgan Stanley.

As Mr. Pickard points out that "The proof is in the pudding — three of the five broker-dealers have blown up."

Without even really knowing about the SEC, it sounds like someone needs to explain why these companies were excluded, and ensure it doesn't happen again.