Thursday, December 11, 2008

Letters… We Get Letters…

Or, more appropriately: junk mail. Political junk mail. I only check my snail-mail box once a week or so, but it appears the RNC is a little behind in their mailings. Note the dates on the two letters below:

Both letters were in my box today, and I know I checked my mail last week. That’s when all the bills arrive and I’m VERY diligent about collecting the bills and mailing out the requisite payments, which keeps me in the good graces of folks who provide me with services of one type or another.

But back to the subject at hand… I suppose I’ll be dunned with RNC mailings from now until eternity Hell freezes over, but at least I can throw them away unopened. I thought I’d avoid this sort of unpleasantness by declining to provide an e-mail address when I made my contribution to the McCain campaign earlier this Fall. And I have, sorta. At least my e-mail inbox is devoid of political spam.

Lastly… I know this is a form letter, but it’s a nice form letter. This came in about three weeks after I’d made my contribution to Johnny Mac:

Not bad, eh? I’m gonna keep it.

―::

We also get a lil bit of e-mail here at El Casa Móvil De Pennington. We received a note from Detroit recently, from an old friend who happens to be a General Motors employee. And yeah, my friend’s note had a lot to do with this:

WASHINGTON — The House on Wednesday night approved an emergency plan to prevent the collapse of the nation’s domestic automobile industry, but the measure faces serious opposition in the Senate, where Republicans are revolting against a White House-brokered deal to speed $14 billion to cash-starved General Motors and Chrysler.

After battling through the weekend to reach a compromise with congressional Democrats, the White House Wednesday dispatched Chief of Staff Joshua Bolten to sell the plan to restive Republican senators. But many GOP lawmakers emerged from a combative luncheon with Bolten unconvinced the plan would compel Detroit automakers to make the painful changes necessary to restore them to profitability.

After mostly partisan debate, the House voted 237 to 170 to approve the measure. But with Sen. Richard Shelby, R-Ala., and other conservatives threatening to block consideration of the measure, even some Republican advocates of the bailout said it is unlikely to attract sufficient GOP support to win approval in the closely divided Senate.

Let me quote my friend:

As you can imagine it has been rather stressful here with recent events. Our continued employment is very much at risk. Following is some information on the bridge loan and a number to call to leave a message with your representative for support of the loan. Here is the number if you do not want to wade through the material:

Phone calls to your legislators can be facilitated by calling 1-866-927-2233 and entering your 5-digit zip code when prompted.

We would all like to see the market work as it is supposed to and to leave government out of it. But these are not normal times, as the financial sector bail out indicates. (I do not remember seeing any bankers or brokers by the way having to testify for the money given, not loaned.) These are like 1932 times. The domestic auto industry has been caught at a time when credit is tight after very major restructuring.

Many people rightly wonder why others can make money here and not the big 3. Simply put, the big three have been operating in a higher cost environment for longer. We do our research here; the transplants do it overseas with workers whose health care and retirement are covered by the government. They have not operated here for 100 years, so do not have pension checks going to hundreds of thousands of retirees and their widows. And by the way, the credit crisis has affected all manufacturers;
Toyota is down by a third, and Prius sales are down 48% with cheap gas on top of that.

Big changes have been made in the last few years to costs and compensation (without specifics, be assured ours is in there as well). The question is, do we want to live in a country with a large middle class, or do we want to go towards a model more like the Great Depression or one of the countries were are competing with? Anyone want to live and work in
China, or Mexico, Korea, or even Poland or Russia? These are low cost countries where transplants do their engineering or major component production. Do not believe that if you are not employed by the auto industry or live in the Rust Belt that you will not be affected by a collapse of the domestic auto industry. You will be.

I was similarly frustrated as many others were by the bailout of the financial sector, but saw the necessity for the overall economy. But the auto industry loan is a loan like what Chrysler received 30 years ago. That loan was paid back early and made a profit for taxpayers of $350,000,000.

Your help in the form of a phone call is greatly appreciated and I sincerely believe also in your own best interest. Following is some material for background as well.

Click here: GM Facts and Fiction

We need you to keep the pressure on by calling your U.S. Senators and Representatives in the next 24 hours and reminding them that a healthy U.S. auto industry is vital to our nation’s economic stability and long-term security. Please use the hot line below and let your legislators know that their support for our industry will save millions of jobs that depend on us and will strengthen our economy. Congress must hear that Federal loans will help us bridge the current global financial crisis and allow us to continue our transformation and progress. A strong American manufacturing sector and technological leadership in the global marketplace depends on their acting this year.

1-866-927-2233

I tried to make that phone call Wednesday evening, but my senators (Hutchison and Cornyn) had gone home for the day and voice mail wasn’t an option. I will be making the calls later today, rest assured of that.

Most conservatives are against the “bailout” for Detroit, mostly based on tried-and-true conservative principles of limited government and the free market. I’m all for both, but at the same time I cannot see any merit whatsoever in letting Detroit fail in the midst of the worst financial crisis of my lifetime. “Letting Detroit fail” is the best way I know of to ensure we get a full-blown, 1930s-style depression rather than a deep recession. I’m NOT being a Chicken Little here: the sky really WILL fall if we let Detroit go under. You may or may not believe this, but believe me: you DON'T want to put it to the ultimate test.

The situation is dire. My friend… the guy who wrote the e-mail I’ve quoted above… called me last evening and we spoke for the better part of an hour. And, Gentle Reader, he’s convinced me that the loans Congress is proposing are absolutely, positively necessary. GM will be out of business before the end of the year if something isn’t done.

The House did the right thing last evening by passing the auto loan bill by a vote of 237-170. But, as noted in the article above, certain senators are vowing to filibuster this relief bill. And that's NOT the "right thing" to do in this climate.

Won’t you join me in calling your senators and asking them to support the auto industry loans? Please?

22 comments:

  1. I have no problem with loans in general. The thing is, though, aren't taxpayers unwilling co-signers to them? If these companies end up in bankruptcy anyway and default on the loans, doesn't the taxpayer take it in the shorts?

    I have no way of knowing if bankruptcy is inevitable, of course, but if they're headed that way anyway I'd prefer they do it now and leave the taxpayer risk out of it.

    Also, I don't buy into the whole "who's going to buy a car from a company in bankruptcy" argument. Who's going to buy a car from a company that's in DC every few months begging for "just one more loan?"

    Having seen how these bailout dollars were treated by banks, I don't have a whole lot of confidence that this will be any different. And I'm not keen at all (and nor should your friend be) about the idea of gov't dictating business practices, salaries, and product mix on my nickel. It's akin to the IRS, a gov't run organization that insists that I account for every penny earned, saved, or spent with unerring accuracy, while they themselves haven't been able to balance their own books in decades.

    I could be wrong, of course, but this whole thing smells like a fiasco that will end up being paid for by taxpayers.

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  3. This is a comment, if possibly uninformed, sentiment:

    http://tinyurl.com/5tq5ew

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  4. Darn Buck...I didn't get my "Thank You" from McCain or the GOP....guess it was because I gave my $Bucks$ to the church, Christian Childrens Fund, and the Salvation Army.

    The GOP left me behind long ago...hopefully Sarah Palin or someone in that mode will call me back.

    As far as the "Bail Out"....I can't support them, I think Chapter 11 may be a better option than having Government oversight, wait, under Chapter 11 there is oversight anyway.....it's a slippery slope either way. The Government keeps printing money...if that doesn't stop, we are sunk anyway.

    The pain is just beginning, hopefully we can wake up and realize that Big Government is a large part of the problem, not the solution....meanwhile Honda here in western Ohio and elsewhere is doing find and dandy thank you(with no UAW), but even that can't last for long under the current economic situation.

    Can you tell I've still "wacked out" with my cold meds? ;)

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  5. I was annoyed with the McCain campaign - for so many reasons but I'm trying to focus. I ordered lawn signs and window decals when I placed my donation - which they took from my credit card right quick. The merchandise itself - notsomuch. It arrived 4+ weeks afterwards! In the meantime I ordered stuff from CafePress and it arrived in 5 days.

    Bailout - I understand why it's the right thing and that doesn't mean I have to support it or like it. We are rewarding the Big 3 for years of bad business practices, continued kow-towing to the unions and moneygrabbing by the execs. It's not just the current economic situation that has brought all three of them to this point - it's been a long time coming while the execs took their fat bonuses and company jets and while the union held the companies hostage.

    This is a no-win situation and frankly, I'm sickened that we the taxpayer have to foot the bill for all these fatcats - including the financial sector - who lined their pockets with no regard to doing the right thing with their businesses.

    Sorry Buck.

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  6. The "leftist agenda"? Is that like the "homosexual agenda"? LOL ... nothing but fear tactics. Nothing changes.

    And, sorry, but I don't support the Big 3 bailout. It's a free market system, ain't it? Don't the Repubs always go on and on (ad nauseam) about how the free market system is just the very best thing ever? Let the damn thing play out. If we bail out these companies, who would not consider the entire forest (including smaller, more fuel efficient cars) because they were so busy admiring the Sequoias (in other words, the behemoth SUVs) ... again ... nothing changes.

    I'm sorry, but every other industry -- and all of its workers -- have had to adapt. U.S. automakers -- and all of the other businesses that depend on them -- will have to do the same. Yes, it will be extremely painful, but this is what happens when nobody considers anything beyond the dollars going into their pockets right now.

    Otoh, maybe it's easy for me to say these things since I have a relatively secure job, working for an American Indian tribe (that doesn't have a casino, yet) ... go figure.

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  7. I get my GOP mail via overload email....ah, woulda, shoulda, didn't....such is life.

    On the bail out.....DO NOT DO IT.

    I worked for a Federal Bankruptcy Trustee....bottom line, FOLKS GET THERE ON THEIR OWN....whether it be a major corp or a small town farmer or a guy who spent too much money in unsecured debt.....we are just going to throw good money after bad....let them restructure under the protection of a stay from the bankruptcy court, show us they can do it, that they can buckle down and do the right thing, if AIG has shown us anything, it was that THAT BAILOUT was a HANDOUT to PARTY down and pay out to enable the big guys to do at will......I mean come on the BIG THREE arrived in DC in private JETS.....security my ASS. OH PAHLEEZE. I say let them fail and the chips fall where they land....my dad was a steel worker, NO ONE DID A THING TO BAIL OUT BETHLEHEM STEEL as it began to fail, eventually leading it to have to force those like my father to choose early retirement or go to hourly work, I mean he had an entire life invested in his position and like that, poof it was gone, it put him in an early grave and led them to file for Bankruptcy and although it was not as bad as it is now that does not mean we give CARTE BLANCHE to these guys by bailing them out because they wrote checks they could not cash!

    JMHO.

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  8. Buck,
    I am with the majority here and I will call my two senators for what good it will do (one is a Bleeding Heart and the other is the dumbest RINO going - "magic bullet man")and voice my opposition to these many and continued handouts.

    One of the many things that bugs me is that a lot of support for these "bailouts" come from the fact that these companies have made huge payouts to the campaigns of the very Politicians they are now begging for money from. The largest contributor to both parties this last year was the "Finical Sector" so I guess they got their money's worth. If the politicians were loaning their own money I wouldn't care but its OUR money.

    I think one of the big three is going to fail no mater how much money they are given and maybe even two of them. So, let them fail NOW on their own terms. Their return will be all the better for them and they will come back.
    I just don't want the US Congress being in the car business. I can't stand the thought of having to ride around in the "Nancey Pelosi Mobile" or the worse yet the "Barney Frank SUV"!!!!

    BT: Jimmy T sends.

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  9. Buck, I completely supported the previous bailout. I thought it was necessary to prevent business credit shortage and shore up the companies who keep America working. I was wrong and so were the experts who advocated that position.

    I don't support this bailout at all. I understand that up to four million people may lose their jobs if these companies tank, I also understand that filing bankruptcy will not eliminate four million jobs. These companies have unsustainable business models, they need to do massive fundamental restructuring if they mean to stay in business and earn a profit. We, the people, are not obligated to provide the financial underpinnings for a failing private business model. If unions were not involved this wouldn't be a congressional issue. I don't recall a single tech or dotcom being bailed out, Alcoa isn't on the agenda, the steel industry had no help. I could give you a page full of big employers and the ancillary damage caused by related businesses folding from times past right up until now, I do not believe the taxpayers of this country should bail out private business period. The auto industry is no exception.

    Did you know that Volkswagen just invested one billion dollars to build a new plant in the non-union South? The car industry is alive and well in America, the foreigners are just doing it better than those bloated jerks in the mid-west.

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  10. Oh Yeah, I forgot to mention - I am especially anguished tonight because the Flyers are loosing to the Hurricanes - lots of fighting though but they are loosing.

    BT: Jimmy T sends.

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  11. Alright, alright, things aren't so bad after all. I still don't want the Bailout but the Flyers pulled it out after being down 5 to 1 at the start of the 3ard period. Great Fights, a hat trick and a shoot out to boot!!!! Nothing like Ice Hockey!!

    BT: Jimmy T sends.

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  12. All: {sigh} See all y'all in the bread lines. ;-)

    Jimmy: Sorry about your Flyers. Sometimes it bees that way!

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  13. I say no to the Houses' version of the bailout. The cards are going to fall no matter what.

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  14. Do what they want, or death and destruction will reign supreme, eh? You might very well be right.

    The problem with the Harbinger of Doom pillar is that you can't debate it. You can't compromise. You either do what they want, or else you don't.

    It creates a big problem with the situation at hand -- which, of course, the bailout salesmen can't & won't debate. The biggest problem right now, that I don't see anyone with a significant voice even identifying, is that supposedly this is a last-ditch effort...Big Three will definitely fail in two weeks if this isn't done...and yet, this whole thing is an "afterthought" to the S&L bailout. If this is the very last chance, then how come we just started hearing about it after the S&L bailout?

    I have an answer to offer. A union goon or two called up Nancy Pelosi's office and said "Goddammit you useless battleaxe, we want ours."

    You could accept my explanation (I really don't see how you can't be open to some variation of it) and still be in favor of the auto bailout. But if that's the case, let us not pretend we're having these hot and heavy discussions within a single corporate quarter of time just because the Big Three are at death's door. We're having these hot and heavy discussions because well-connected and overly self-important spoiled people want us to have them.

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  15. Jimmy: That was a hella comeback last evening! Being down 5-1 in the third and coming back to win in a shoot-out? Wow!

    Morgan: The "bail out" is definitely taking on a "Save the UAW" flavor, and that pisses me right the Hell off. One could make a case management is just as much at fault for the current state of affairs because they "gave in" to the UAW's demands, but it ain't that damned simple. The UAW's contract negotiating tactics in the past were to target a single company (of the three), using the threat of strike to get what they wanted. That threat carried a LOT of weight with the targeted company, no matter if it was Ford, GM, or Chrysler. You can't sit idly by as a company while your two competitors take market share from you during a lengthy strike, so you acquiesce to the demands... eventually. Then the UAW takes the newly-negotiated agreement to the other two companies and they accept it, without question. That's the way it went.

    I HATE the frickin' UAW.

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  16. I think Morgan is on to something with the motor companies heading to DC with their hands out - after the gov bailed out the banks. Everone wants their share of the pie. Now that the gov has a bigger pull with the banks, maybe they could make sure the banks help the auto industry after they declare bankruptcy.

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  17. I remain hopeful bankruptcy isn't in the cards. I believe the oft-expressed meme that people won't buy (durable goods) from a bankrupt company. GM and the others ain't quite like an airline, which can file for Chapter 11 protection and keep flying with little or no repercussions.

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  18. I understand the concern about buying goods from a bankrupt company, but really, is anyone buying goods from the Big Three now? Add that in with the fact that the ONLY way for the companies to succeed is to get out from under the thumb of the UAW and the UAW has demonstrated the ONLY way that is going to occur is if the companies are allowed to restructure after entering Chapter 11. The only role for government in this should be to guarantee credit while the companies enter Chapter 11, as given the tightness of the credit market their ability to have large enough lines of credit to maintain operations is a legitimate concern.

    Finally, I'll repeat the point I made last time we discussed this...the American auto industry isn't failing. The 50% of it that is poorly operated that just happens to be domestic owned is.

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  19. Oh, one more point...this whole loan/bailout stinks because it's a way for the government to impose their vision of "hybrids for everyone" on the Big 3. That's a brilliant business plan for failure, as the hybrid cars that certain Congresscritters are pushing (hard!) for are based on immature technologies that no one knows how much will cost. Add that in with the fact that despite all the hype, hybrids don't sell that well in this country (especially with the price of gas falling like a rock as oil demand falls as the economy tanks) and using the bailout as an opportunity for government fiat to impose hybrids on the industry is a recipe for disaster.

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  20. Alright, one LAST comment, re: the cost of all this and how everyone is asking for something...the current cost of the all the government bailouts now is around $8.5 TRILLION. That is, in fact, over 60% of the nation's total GDP.

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  21. Mike: All good points; spoken like a true Libertarian.

    However. Your $8.5 trillion figure is severely misleading: that number represents the total US liability if every loan the US guarantees defaults. And THAT simply won't happen. The true number... in terms of dollars appropriated and/or actually spent so far is less than ONE trillion dollars. But that's still way too damned much, IMHO.

    I've been having second thoughts since Thursday about the proposed bailout... as it was written by the House. I'm glad that bill failed, as I think the concept of a "car czar" is about the stupidest thing I've ever heard. You (and others who ranted in this space) are absolutely correct that the enviro-whack jobs were driving a lot of the content in that bill. But I'm STILL in favor of a bridge loan, as I also believe Detroit has done significant work in restructuring its business. Does more need to be done? Yes. But should the Big 3 go into Chapter 11 protection? I still don't think that's a good idea.

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  22. Yes, forgot to mention the fact that it's the total liability...obviously that won't happen, but the fact that the government is willing to guarantee that much is still pretty disturbing.

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Just be polite... that's all I ask.