The Current #134

The Current #134
Sunday May 3, 2009
Hosts: Jacob Bodnar and Logan Sparrow

Obama’s Rough Week
It was a tough week for Obama. He deceived the public about the amount of jobs his recovery program has saved or created (hint, it’s not 150,000), it was released that some beneficiaries of his tax credit would need to repay money next year, and the most humorous gaffe he made this week was claiming Winston Churchill condemned torture. As Jacob and Logan point out, that statement is very ironic.
[audio:http://www.thecurrentpodcast.com/episodes/segments/obama_churchill134.mp3]

Bye Bye Specter
Arlen Specter decided he had done all he could do in the republican party, so he switched sides. He claims that it was because he aligns better with the left, but Jacob and Logan can see through that, it’s obvious Specter changed simply to get reelected.
[audio:http://www.thecurrentpodcast.com/episodes/segments/specter_134.mp3]

SWINE FLU OMG!!!
The media is going crazy over the swine flu, it’s gotten to the point where it’s more comical than serious. With only 1,000 cases confirmed out of 6 billion people, the media might be making a mountain out of mole hill. They’ve gone as far as to reporting on “zombie swine flu.” Yikes!
[audio:http://www.thecurrentpodcast.com/episodes/segments/swine_flu134.mp3]

FULL EPISODE
[audio:http://www.thecurrentpodcast.com/episodes/thecurrentep134_96.mp3]

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Daily Chew: April 23, 2009

I was looking through my blog archives last night and noticed that I hadn’t done a daily chew post in awhile. I decided I’m going to bring it back every evening with the top three stories from the day.

Pelosi not being entirely honest about waterboarding knowledge
There’s been a lot of press today about torture. First, a private memo circulated by Obama’s national intelligence chief, admitted that “enhanced interrogation methods” actually worked. The other news is that there was a select group of congressmen that were briefed on the subject of torture and what the Bush administration was doing, or going to do, to intimidate inmates.

Apparently Nancy Pelosi was one of those briefed on waterboarding, yet today she denied it.

“In that or any other briefing…we were not, and I repeat, were not told that waterboarding or any of these other enhanced interrogation techniques were used. What they did tell us is that they had some legislative counsel … opinions that they could be used,” she told reporters today.

Pelosi is fairly confident that she wasn’t briefed. However, The Washington Post reports a different story:

In September 2002, four members of Congress met in secret for a first look at a unique CIA program designed to wring vital information from reticent terrorism suspects in U.S. custody. For more than an hour, the bipartisan group, which included current House Speaker Nancy Pelosi (D-Calif.), was given a virtual tour of the CIA’s overseas detention sites and the harsh techniques interrogators had devised to try to make their prisoners talk.

So Pelosi was part of this briefing. Pelosi has responded basically by saying that she was briefed but didn’t know that the techniques would be used, or didn’t know how they would be used, or something like that.

On one occasion, in the fall of 2002, I was briefed on interrogation techniques the Administration was considering using in the future. The Administration advised that legal counsel for the both the CIA and the Department of Justice had concluded that the techniques were legal.

Either way, Pelosi knew about waterboarding, at the very least that it was being considered, didn’t say anything, despite her complete objection to it now, and then lied about knowing about it when someone questioned her. That’s a great speaker we have.

When Will Meghan McCain go away?
Meghan McCain is like the black plague right now. I say that for two reasons. One, she always wears black, who the hell does she think she is, Ann Coulter? Number two, she’s popping up everywhere and slowly killing her relationship with other republicans.

Here she is on “The View” the other day.

She thinks that Karl Rove following her on Twitter is weird? Does she understand the concept of Twitter? There are plenty of people that I don’t know that follow me, and last I checked Meghan was over 1,000 followers, maybe even 2,000, she obviously doesn’t know them all. She tries to paint her self as the “new face” of the republican party, of course the party’s top strategist would want to follow her.

She then says that Karl Rove and Dick Cheney “had their eight years” and then tells them to “go away.” Hey Meghan McCain, you had your fifteen minutes, I think it’s time to start listening to your own advice. Please, go away.

U.S. is said to be prepping Chrysler for bankruptcy
This story will make you pull your hair out, and then lock your wallet in a safe.

The Treasury Department is directing Chrysler to prepare a Chapter 11 bankruptcy filing that could come as soon as next week, people with direct knowledge of the action said Thursday.

Gee, I’m so glad we gave Chrysler and GM billions of dollars back in December so they could get back on their feet and “avoid bankruptcy.” If the government screwing up the auto industry doesn’t drain the rest of your confidence in Washington I don’t know what will.

Of course simply filing for bankruptcy doesn’t solve the problem. Chrysler still needs to negotiate with creditors to wave off some of the company’s debt. The latest offer from Chrysler was 22 cents on the dollar.

The Treasury Department has made an agreement with the UAW that their retirees health care and pension benefits would be protected under bankruptcy, which may or may not be a good thing, after all the legacy costs of employees help put the automakers into a financial blunder, you’d think they would want to renegotiate some of the those benefits to avoid this in the future.

–jb

America’s Early Christmas Gift: Bailout

Christmas might be six days away but the auto makers got an early Christmas gift today from the White House…a bailout.

The White House announced a $17.4 billion rescue package for the troubled Detroit auto makers that allows them to avoid bankruptcy and leaves many of the big decisions for the incoming Obama administration.

Once again the amount will only last them through about March, after then there will be more funds available if needed, but I guess the hope is that everything will be sunshine and lollipops by then. If we are actually going to get these companies out from under we need a long term solution, and no amount of money will provide that long term solution. They need new negotiations with the unions and dealers, under this plan they don’t get that.

King Bush, I call him King Bush because he was able to authorize this loan without congressional approval after congress had voted against this loan, used the same logic against bankruptcy that liberals have been using.

Speaking from the White House, President George W. Bush said the administration decided against forcing a bankruptcy to compel cost-cutting, in order to avoid the risk that consumers would desert one or more of the companies and touch off an industry collapse, deepening the current economic downturn.

A USA Today poll was released that showed consumers would consider buying a car from a bankrupt company. And by the way, we all know how oblivious the majority of Americans are to the news, I’d bet a good chunk of GM, Ford, or Chrysler buyers wouldn’t even be aware that the company is bankrupt.

The Bush proposal carries some of the same requirements as the congressional proposal. Most notably that “the companies will be required to reach new agreements with major stakeholders, including dealers and suppliers, by March 31.”

Uhhh, that’s bankruptcy. One of the advantages to Chapter 11 is that negotiating with dealers, suppliers, unions, etc, is made easier by the bankruptcy court and the legal protection you gain by filing for Chapter 11. This proposal requires the negotiation without providing the legal advantages of bankruptcy.

I also might add that this doesn’t help the Bush legacy among conservatives. I’ve had my problems with Bush namely on immigration and spending, and conservatives can now add the death of capitalism to that list. He’s overseen what might be the second greatest leap towards socialism in this country’s history. All in the name of “saving the economy,” and none of it appears to have worked yet.

Bush said earlier this week that he had to deviate from capitalism to save capitalism. Uhh…what? That’s like saying we have to burn the house down to save it. Or to quote ‘Seinfeld’ it’s like, “sex to save the friendship.” The best way to preserve capitalism is to prove to the world that it works by using it to get out of this economic mess.

If there’s one light spot in this story it’s that Ford rejected the loan from the government.

“We do not face a near-term liquidity issue, and we are not seeking short-term financial assistance from the government,” Ford president and chief executive officer Alan Mulally said in a statement.

I commend Ford for restructuring before it was too late. They had problems a few years ago and instead of tweaking a few things they changed a lot of things and hired a new CEO. It appears that they’re starting to turn the corner.

As for the others they need massive restructuring and negotiations, and the only path that provides that is…

…you guessed it, bankruptcy and capitalism.

–jb

Consumer Would Still Purchase a Car from a Bankrupt Company

The main argument against bankruptcy for the auto industry has been the notion that consumers wouldn’t buy a car from a bankrupt car company.

Well a new USA Today/Gallup poll proves that notion wrong.

But the USA TODAY/Gallup Poll says otherwise. The survey of 1,008 adults Friday to Sunday found that 82% would at least consider a Detroit-brand vehicle. Of those, 67% would do so even if the company were in bankruptcy court.

So I guess we can throw that argument out the window. So what argument do they have left?

–jb

Bailout Blame Game

After the Senate Republicans stalled the auto industry bailout everyone got a finger pointed at them.

The union says that the republicans unfairly put a time line on union concessions saying the changes had to take place across a long period of time and not by an arbitrary date. The republicans say they would have allowed the bailout so long as the union agreed to take a benefits and pay cut. And Michigan Governor Jennifer Granholm blamed everyone but herself, seriously listen to the audio here.

In that sound clip you’ll hear Granholm throw out every buzz word under the sun, even going as far as to say not bailing out the auto companies is “unamerican.”

The same radio host that interviewed Granholm, interviewed Ron Gettelfinger. Gettelfinger, of course, blamed republicans and never answered the question as to why the union didn’t just concede to a benefits and pay decrease.

Here’s the bottom line. The auto makers can only do so much. They’ve agreed to make concessions, they’ve agreed to make ‘green’ cars. However, they cannot control how much they pay their employees. It’s an unfortunate situation. If the auto industry is going to turn around everyone is going to have to take a cut, including workers.

That’s where the union comes in. The only concession they’ve made is to cut out the laid off worker benefits program. Ya know the program that was paying laid off workers $31 dollars an hour to doing nothing. Other than that the average UAW worker will still costs GM, Chrysler, and Ford $71 dollars and hour, while the average Toyota worker only costs the them $48 an hour.

According to Gettelfinger the UAW really wanted to take a pay cut, but couldn’t get it done within the republicans timetable.

In a statement Thursday night, the union said it was “prepared to agree that any restructuring plan should ensure that the wages and benefits of workers at the domestic automakers should be competitive with those paid by the foreign transplants. But we also recognized that this would take time to work out and implement” using programs like buyouts and early retirement offers to bring in new workers at lower rates.

“Unfortunately, Senate Republicans insisted that this had to be accomplished by an arbitrary deadline,” the statement said. “This arbitrary requirement was not imposed on any other stakeholder groups. Thus, the U.A.W. believed this was a blatant attempt to make workers shoulder the lion’s share of the costs of any restructuring plan.”

Of course they wanted it done by an arbitrary deadline, otherwise it would never get done. That wasn’t “setting up” the UAW, that was making sure that their request was actually granted.

And what roadblocks cause the UAW to take so long to draft a pay cut? If they needed this bailout so bad and that was the deal breaker, couldn’t they cut through that paper work bull crap and just get the plan done.

Gettelfinger said himself that he thought from the get-go that the UAW was being setup.

“We wondered if we were just being set up,” Mr. Gettelfinger said. “We did not know who Senator Corker was representing on the Republican side, and if he could deliver votes.”

When you’re convinced that you’re being “setup” before you even begin talks, 100% of the time nothing will get accomplished.

In a press conference today Gettelfinger offered a laundry list of bogus excuses as to why he didn’t agree to a pay cut. One of my favorites was…

Mr. Gettelfinger said Friday that there was no way to tell what Mr. Corker meant by competitive wage and benefit rates, which differ depending on the company and the location of the automakers’ plants. He went on, “The G.O.P. caucus was insisting the restructuring had to be done on the backs of workers and retirees rather than have all stakeholders come to the table.”

No way to tell what competitive wages and benefits are? Here’s a way, take all the wages and benefits from the foreign automakers in America, add them all up, divide by the number of sample wages, and presto, you have an average. Then do everything in your power to bring the domestic automakers average down to that average. Does Gettelfinger not understand the basic concept of averages?

Some former union workers also felt strongly about the subject.

“Politicians don’t dictate union wages, and I would have felt the same way, even if I was working,” said Marty Shawl, of Bay City, Mich., who retired from a G.M. plant in May.

Unfortunately, when you want money from the government you automatically give them a right to oversee the restructuring to ensure that they get their money back. That’s the primary reason I’m against all bailouts.

So you make the call. The senate republicans said if the union agreed to take the pay cut, they would have gotten the bailout. The union insists there’s no way to define competitive wages and the pay cut would take too long to implement. Who’s right, who’s wrong?

–jb

Bailout Dies in the Senate UPDATE: Link Added

CNN is reporting that compromise talks about the auto bailout have failed and the bill has died in the Senate. LINK

UPDATE: Go figure, Fox News has a link before CNN.

–jb

Bailout in the Senate’s Hands

The auto industry bailout passed the House in a late vote last night 225-179. At one point as many as 35 republicans had voted for the bill, however 25 changed their vote and the finally tally was only 10.

The bill now heads to the Senate for passage, however it appears that’s not going to happen.

The Senate’s top democrat along with the White House made their final pleas for the $14-billion auto bailout bill even as some predicted the hard-fought legislation would be crushed by Senate Republicans by the end of the week.

The republicans are planning on filibustering the bill, and the democrats don’t have enough votes to make cloture so by the grace of God and all that is good the auto bailout will fail.

The democrats, the White House, and the republicans will most certainly head back to the negotiating table and try to come up with something. However, I have a feeling that anything they propose will be shot down by senate republicans. And so long as democrats can’t reach that 60 vote threshold, there’s nothing they can do.

While they won’t have 60 democratic senators next year they’ll have close to that number. And if enough republicans switch over and vote yes the democrats might have a shot of passing something next year, but at that point it’s too late.

So there is a decent chance the Big Three fall into bankruptcy and their problems are sorted out the right way.

If the Big Three don’t go into bankruptcy they’ll have a hard time holding discussions with creditors, dealers, and most importantly the union.

Despite the UAW saying they’ll make concessions in order to help the Big Three, they’re still being a massive pain in the butt. The UAW now says that if GM wants them to make concessions they want a seat on the board of directors.

The United Auto Workers union wants a seat on General Motors Corp.’s board in exchange for money- saving concessions to help the biggest U.S. carmaker win federal aid, a local president said.

The Union can’t even make concessions without wanting something in return. The fat cats of the UAW are willing to put their member’s jobs on the line just so they can’t get a seat on the GM board of directors, which I’m assuming will be a fairly nice pay increase for them.

The union has suspended a program that pays laid off workers, but as we all know that’s only half the problem. The union still has to make concessions on pensions, benefits, and even hourly wages.

But it doesn’t look like they’re going to budge unless they get something “extraordinary” in return.

“The UAW has to show their members that they are getting something extraordinary in return for reopening negotiations,” Gary Chaison, a labor-relations professor at Clark University in Worcester, Massachusetts, said in an interview. “For GM, allowing the UAW on the board shows they are going the extra yard in their restructuring.”

Your members are getting something extraordinary in return; their jobs. The union has an option, make concessions or have all of their members become suddenly unemployed.

Also announced today was that Sweden is offering their auto makers $3.4 billion in credit and emergency loans. This will simply be more ammo for the democrats to fire. They keep claiming that other governments are supporting their auto industry and we should do the same by offering loans.

However, I must point out two things. 1.) Sweden’s contributions to their auto industry are much smaller then ours, only $3.4 billion. Also note that Sweden isn’t really the most capitalist country on the face of the earth. 2.) I agree, we could learn something from Sweden. In the mist of this global economic crisis they lowered their corporate tax rate from 28% to 26.5%.

It’s also worthwhile to mention that Sweden is carrying at $19 billion budget surplus. So they can, ya know, kinda afford to throw some money at their auto industry. Meanwhile we’re dealing with a $400 billion to $1 trillion budget deficit next year. So, ya know, we kinda can’t afford to throw money at our auto industry. It’s really quite simple.

But like I said, we can take note from some of Sweden’s actions, the decided they want to save their corporations a little more money so they can continue to employ citizens, so they cut their tax rate.

If we want to compete with other nations for business, the solution is not to give them billions of dollars, the solution is cut the corporate tax rate to a level in which we can actually compete with other nations.

It’s the hip and cool thing, everyone’s doing it.

–jb

Bailout Passes House

Final vote was 225-179, at one point 35 republicans had voted for the bill, however the number ended up at only 10.

The republicans that voted for it were almost exclusively from Michigan, not much of a surprise there.

Roll Call Votes

–jb