Bailout Watch 175: Freep Loves Them Some Bailout
As commentators from all across the spectrum ditch their pom-poms and start to face facts, The Detroit Free Press is keeping it surreal by dedicating its nearly all of its ink budget to the cause of federal investments in the American auto industry. In fact, there’s so much bailout boosterism, it’s hard to know where to begin. How about the decision to run this CBS scare piece, complete with misleading, self-serving commentary by MI Governor Jennifer Granholm? When asked to justify a bailout of failed businesses, Granholm claims “one in ten Americans is employed in this industry.” Yes Ms Granholm, but “this industry” includes plenty of healthy firms who aren’t asking anyone for a bailout. Oh, but the “national economy,” “manufacturing sector,” and “energy future” (?) depend on a bailout, threatens pleads Granholm. You decide where her political career rates on that list of bailout-dependent priorities. Oh, but there’s so much more…
Further along, Freep columnist Rochelle Riley wonders aloud “Can The Auto Industry Borrow AIG’s Lobbyist?” while exhorting Granholm to step it up. “If the American auto industry fails — and many people amazingly still don’t believe it’s possible — IT WOULD BE AN UNNATURAL DISASTER OF DEVASTATING AND INSURMOUNTABLE NATIONAL PROPORTIONS. (Yes, I’m screaming that part.)” writes Riley, drawing on the “caps lock” rhetorical technique long favored by forum trolls. “And the governor can’t seem to convince people of the urgency.” So, Granholm should conjure up even more misleading tropes (Volt=pure electric, No Detroit= No EVs, etc) to create more of a sense of urgency? Ultimately, Riley refines her argument to its headline-fulfilling conclusion. “It isn’t fair. And Michigan needs to borrow AIG’s lobbyist, the one who convinced the administration to write near blank checks to the insurance company.” MY HEAD ASPLODE! (Yes, I’m screaming that part.)
Speaking of Freep hearting its local Dems and their shared passion for rewarding (local) failure, be sure to check out their special “We Heart John Dingell” section. There you’ll find their editorial board’s fawning endorsement of Rep. John Dingell as chairman of the House Energy and Commerce Committee. You see, Dingell “fights tirelessly for the interests of the beleaguered auto industry,” and his challenger, Rep. Henry Waxman (D-CA), is “literally a Beverly Hills Democrat.” Oh yeah, and they hand-picked five letters from readers for the website, four of which just happen to bleed Dingell love all over the page. Coincidence? Echo chambers rarely are.
Finally, a piece by former Olds-euthanasia litigator Leonid Feller offers a new (and by Freep standards, moderate) approach to a bailout. In this test balloon, the government would essentially perform brand mercy killings for any Detroit firm that wants it. Pointing out that the $2.3b spent to eliminate Oldsmobile is only one-third of the $6.9b GM burnt through last quarter, Feller sells the idea as a bargain. Still, add up all the brands GM would need euthanized (Saab, Saturn, Buick, Pontiac) and you’re back to about $10b. Still, after reading the rest of the Freep’s bailout coverage, I expected him to recommend hiring Jack Abramov to convince Obama to start selling arms to Iran, and using the profits to build Volts. The suggestion that brand cuts be “string attached” to any government aid seems downright reasonable. Y’know, relatively.
Geeber on Nov 13, 2008I Callahan: Then what is? And please don’t bring out the tired old shibboleth about making trucks and large cars and not being ready when things changed - that’s a hunk of B.S. from the word go. Poor management, plain and simple. I would never criticize GM for making big trucks. There is a market for the Silverado and Tahoe. The problem is that GM has consistently put more effort into its larger vehicles and only grudgingly builds small vehicles. That approach leaves GM high-and-dry if the market shifts to smaller vehicles (which it was doing even before this year). Which is what happened... Toyota just introduced an all-new, bigger, Tundra and a redone Sequoia just as the market for those vehicles tanked. Because it has also continuously improved the Corolla and Camry over the years, Toyota still has something to sell people if they don't want a big truck. GM has one decent car to compete in that market - the Malibu. And one car can't support the entire company. GM ignored a major chunk of the market, and is now paying the price. That's bad management, plain and simple.
Billdacat on Nov 17, 2008
Some facts: Why did GM focus on trucks and suv's? Maybe it's the 25% tariff on imported trucks and suv's? Maybe it's the 1.50 gas while gas in japan has been more than 4$ for about a decade Maybe because people wanted those trucks and SUV's with $1.50 gas because it is more comfortable and safe to drive one. Yes.. it is.. I have both a car and midsize SUV and we always take the utility vehicle on trips because it is safer and more comfortable. There is no comparison. Why did Toyota have a hybrid before gas hit 4$ a gallon?.. same reason... 4$ gas in Japan.. why did GM not have an electric or hybrid... 1.50 gas.. You can't expect these companies to build products for 4$ gas when gas was $1.50. No one buys them and they lose money. Maybe if they could sell more than 20,000 cars in Japan, maybe they would have had some hybrids. How about we open that japanese market for u.s. products instead of being the world's "free" market stooges? Another thing.. how can you call a market ..free.. when goods are subsidized? Need an example? how about the fact that we subsidize our farmers... and then ship our produce to Mexico under the guise of free markets.. we absolutely wiped their farmers out.. well.. this is what's happening to our auto industry. Foreigners subsidize their auto industries and then ship their goods here. japan spent hundreds of billions of dollars driving down their Yen over the last several years to make their cars cheaper here than they should be Unions? You think that is the problem? Then explain to me why all of the Japanese automakers in Japan and Korea and Europe are ALL unionized.. all of them. This cOuntry's citizens have beEn led down the road to destruction and too many people believe that "FREE" markets are the answer to everything. So take a look around you and witness what the idea of free markets has done to this country. 10 trillion in debt for starters.. that is what happens when you wipe out your tax base of manufacturers! Oh and we also have more than 5 trillion in debt related to trade.. I guess this is what happens when you ship millions of cars to this country and export only your debt! Our roads and bridges are falling apart, our kids are about half illiterate... and the Republicans socialized the banks but somehow have a hard time with helping the auto industry which provides about 150 Billion a year in tax revenue and directly and indirectly provides employment to millions of people. Tell you what.. go ahead and let them go BK... and then you had better prepare yourself because it will mark the beginning of the Great Depression part 2... which should be subtitled "idiots never learn" The "Free" market Depression By the way.. there is no such thing as "FREE" markets because every country has different taxes and regulations that makes them unequal. Many countries, such as japan, use these tactics to control their markets in favor of their domestic producers. If you want to understand japan's export philosophy, study mercantilism.
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