Granholm: GOP wants 'creative destruction' for auto industry
By David Sunday Feb 22, 2009 11:00am
Michigan Governor Jennifer Granholm thinks that Republican governors need to do more homework before dismissing government loans to save the automotive industry. "My pal here from South Carolina, who I think is a bit -- you'd have to say he's a bit of an outlier in terms of economic theory, more of a libertarian than the rest of us or most folks -- would say that this creative destruction would be good," Granholm said of South Carolina Governor Mark Sanford.
Speaking on a panel of governors on Fox News Sunday, Minnesota Governor Tim Pawlenty disagreed with Granholm. "The unions and auto companies have been unable to put a deal together that fundamentally restructures the industry. It needs to get done. The only way it's going to get done is in bankruptcy court," argued Pawlenty.
"Governor Pawlenty, have you read the reports they've just submitted? I bet you haven't," Granholm shot back. "The unions have made enormous concessions. Starting wages have taken 50% pay cuts. Don't tell me they haven't done that," she said.
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Fix health care and re-tool the production lines for more efficient autos. That would save BOTH from bankruptcy court.
That's when one tool goes in and tries to fix something done by another tool...
:D
tries to strap one on.
The Fat Cats want the creative destruction of unions. They have been doing it since Taft Hartley in 1947.
Taft Hartley was first great push back against the only real advance for Labor as found in the Wagner act of 1935 under FDR. That saintly traitor against his class whom I admire.
It is the class struggle, nothing is new in this regard.
On a side note, here once again George Will demonstrates that he knows nothing about economics, but he pontificates mightily nevertheless.
He is in way over his head with two economics powerhouses Nouriel Roubini and Paul Krugman.
There is a vast amount of capital in the world that is content to go into T Bills at 0% return, in fact paying to play.
This helps to explain why GM, once number one on the Forbes' 500 closed this week worth a measly $1 billion.
Holy crap!
Is that in NA, or worldwide?
That is as GM was traded on the DJIA this last Friday.
That is the market cap, it is not the book value.
Citigroup closed at $10.5 billion down from $274 billion in 2006.
When they go below a $1 per share they are de-listed.
Then they are busted.
any idea on Citi's depository exposure to the FDIC? Thanks
I don't know the book on their deposits.
If there is an intervention the FDIC will need to be bailed out.
Citis' real problem, it is the same with BoA and Wells, is the overrated and over valued CDOs they can't get rid of and can't put on their phony balance sheets.
They would love the Government to buy them for 100¢ on the dollar and screw the taxpayer. Even at 60¢ these guys are insolvent.
Merrill dumped a bunch at 20¢.
This what the hullabaloo is about.
GM with asset backed financing normalized and single payer health insurance would be back in business.
Chrysler is probably a lost cause.
Several of the major Banks are also a lost cause.
Snip - New York – Citi (NYSE: C) today announced that it has reached an agreement with the U.S. Treasury, the Federal Reserve Board, and the Federal Deposit Insurance Corp. (FDIC) on a series of steps to strengthen Citi's capital ratios, reduce risk, and increase liquidity, as described below:
RISK REDUCTION
Under the guarantee, Citi will assume any losses on the portfolio up to $29 billion on a pre-tax basis, in addition to Citi's existing reserves; the government entities will assume 90% of any losses above that level and Citi will assume the balance. Citi will retain these assets on its balance sheet and realize the associated cash flow.
[ http://www.citi.com/citi/press/2008/081124a.htm ]
Grayson Grills Citigroup CEO
[ http://www.youtube.com/watch?v=U73dfpQ4YGg ]
Keep in mind what could happen if the banks can no longer fund the FDIC...
Should we be concerned about our deposits?
The "FDIC" is wholly or primarily funded by the banks, just like we pay our insurance premiums.
I would think that the less bank participants contributing to an insurance narrows the exposure thus increases the premiums to the banks.
I think the "FDIC" has around 45 Billion stashed aside for failures? We lost our 14th bank for this year, just last Friday I believe? Granted those banks were not a big hit on the "FDIC", but just play it out?
Yeah, I heard that a Portland-area bank shut its doors on Fri, I think.
What gets me though is the promises that the banks make. Reminds me of this old cookware set my Mom would use. I think it was "Guardian Service Cookware", she said the stuff was guaranteed for life, but the company went bankrupt... on allot of their products they used glass lids and supposedly they went belly up, replacing the glass lids?
I just looked around and it seems like the place burnt down. :-/ Was taken over or something? So much for guarantees...
Ref: http://www.hillhousewares.com/category2maker1...
http://ottawa.kijiji.ca/c-buy-and-sell-art-co...
PS. My deposits are at a hometown bank, my reserves I can't divulge. :-)
And my "reserves" probably wouldn't buy me a new set of cookware...
The backstops of $301 billion to Citi and $108 to BoA are guarantees of fraud being committed against the American Taxpayer since they are completely non transparent.
They don't even specify WHICH securities are involved so they rummage around and find the worst ones.
Still, the likelihood is that those backstops are not enough. That is apparently what the market is saying.
It is not clear to me where in lies the authority to have done this.
I bought a Lebaron in 1988, It was a great car I owned till 2008. The car was still running great. But because I am getting older, I do need a 4 doors. I pick last year an American. Malibu from Chevy.
Since I came to America in 1965. I have had Americans cars from Pontiacs,Chevy,Dodge,chrysler, and now GM.
I have been lucky not to have a lemon but all my cars has been good buy.
.
Calmly tense
Guilty innocence
Black Republican
Gay Republican
Richly impoverished
Oxymorons on the march.
wonderful. She does her homework and she's very vested in taking care of her state. She's fun to watch.
It really pisses me off to hear all of the bitching about her here in MI. The repubs blame her for the dire straights our state is in, but fact is her republican predecessor ran the budget into the ground before she even took office.
She came in with a deficit and then the shit started hitting the fan everywhere. But she knows her stuff and has been thinking outside the box. She never gets enough credit here in her home state IMHO.
I am amazed that she has kept the state afloat. After fat boy Engler and the right wing walking dead did their Bush-league job on us, it's a wonder we are not far worse off than we are.
the fact that we need to have our industries on a level playing field with other industries in a global economy. The fact that we do not have universal health care is paramount evidence that we can't compete. Period.
I can't believe we elected that idiot. Twice.
Smiling Jack-Ass Pawlently never got 50% of the vote in either election thanks to that good old "independence" party. I live there and I can't stand that POS.
Does the independent party in Minnesota exist solely for the purpose of getting republican's elected with 42% of the vote.
I still can't believe that 450,000 people threw their vote away on that retard Barkley; and now, Franken is still waiting to be seated because he only won by 225 votes.
Give Gov. Granholm props for jumping into the belly of the beast for this. She goes right to the jugular with these goons. Wallace stacked the deck 3 to 1 and she still takes them to school.
Why do we feel the need to give Fox an relevancy? Stay clear of News Corp like the plague it is. Let them twist in the wind of Obama's presidency.
Death to Fox!
The lady from Canada showed the two bullys from Amurka. Sanford talking about losing the textile trade...Maybe if some one had fought like the gov of Michigan they may still have a textile trade. Niether of these two jokes even had the nerve to lie about reading the report. Pawlenty even had the nerve to say the unions haven't given up enough. I doubt he said that about the guys at Morgan Stanley or AIG. AND, AND, these two bozos could not even look Gov Granholm in the eye. Watch the video, these *ussies couldn't even give her the respect of looking her in the eye.
I'm just being picky but reducing starting wages by fifty percent is no concession at all in a company that lays off and rehires by seniority and because of falling demand may never actually hire a brand new employee ever. I'm more than a little disappointed that the CAW chose to throw any new employees under the bus in this way. They're supposed to represent all their members equally.
n/t
Always profiting from shock doctrine style politics and disaster capitalism. These guys are smart and worthy opponents. They won't go away until we stand up to them and match them with intelligence.
Very true. You can hear the wheels turning, trying to make a economic philosophy that no rational person can believe in into something attractive. "Creative destruction" -- that's a new handle. Of course, it's not creative at all. For proof, look at the arguments of the California state GOP senators. There's no creativity in the obstruction of relief and growth.
and everything else anti union is limbaugh and sons and the 1000 stations they use to repeat chamber of commerce and GOP talking points, over and over and over.
when will progressive groups and unions and americans in general figure out those local right wing talk radio stations and their local sponsors are the places to call complain boycott and picket?
Pay close attention to what happens in Michigan. Granholm won the governor spot by a large margin, but has been rebuffed by Republicans in the House over and over and over again. This is what will happen to Obama. Granholm has learned much too late that she needs to blast these dodgy characters with facts and do it publicly. She came in after a Republican governor who sold the state a mess and was left to clean up.
I hope Obama and the Dems in the House and Senate realize this soon, grow a pair, and move forward with force instead of the normal wish-washiness.
The repukes actually control the state senate. Even thiugh they only got 46% of the popular vote statewide, thanks to gerrymandering, they won 21 of 38 senate seats.
Nearly all of the democrats won their senate seats with 65 to 75% of the vote. Nine of the repukes won their seats by 150-1200 votes.
Now thats gerrymandering!
And fascism too!
The worlds banking system is bankrupt! All relative components have become contaminated in direct proportion to their affiliation with same. Politics was, is and will be, the cause and cure of the worlds sickness. The remedial cure goes much deeper then who has a job in America. The future is only as good as its forecaster... think about it.
"Governor Pawlenty, have you read the reports they've just submitted? I bet you haven't"
Since the minority leader of the U.S. House complained that he had not read a single page of the Stimulus Bill, why should she expect Governor Falling Bridges to read a report from her state.
It's nice for a change, to hear someone who has obviously done their homework, taking on those who merely regurgitate the standard Republican talking points. The Republicans want to bust the unions, all of the unions, and that's the bottom line. When they tout BMW and others, they never mention the lower pay, lack of benefits and higher profits per vehicle.
I was very impressed by Jennifer Granholm's knowledge and enthusiasm.
How about that Pawlenty, He as a republican believes in the free market. He wants to tell the America Auto Industry how to run it and how much to pay its workers. Doesn't believe the unions should exist.
Then we have Granholm who somehow wants payback for his state that lost the textile industry to slave workers in foreign countries. But he supports American tax dollars supporting these American comapanies by Gov't diplomatic agreements paid by tax payers.
He does care if his BMW makers in his state are being subsidized by its home country. He would rather another country have the upper hand on America.
Could Sanford explain the tax insentives provide to BMW at tax payer expense to lure BMW to his state? Where does the profits go that BMEW makes from every sale? Does it stay in our country and get reinvested into our economy?
Granholm is correct in her assessment that these oppoposing views are not educated deducements. But are of ideological mindsets that are unwilling to listen.
Would Sanford and Pawlenty stand up and refuse funding for Israel starting NOW? If they had a choice, would they prefer to aide GM or continue funding other countries as Israel, Pakistan, Egupt, etc?????? With tax payer money?
Do they think Haliburton should be America's contractor to the military effort since it is no longer an American based company?
She spanked him.
I bet he liked it.
She said: "Support Michigan. Select Michigan. Buy Michigan. Everything from Ford to Faygo. From Bell's beer to blueberries. While we may court new investment from outside our state, our first love is the businesses that have long called Michigan home."
Hmm...She's a micro brew beer drinker...... :-)
I demand that Republican politicians institute a 50% pay cut, 50% reduction to their pension benefits, and a 100% cut to all medical benefits.
If these things are so good for the common individual then it should be great for these do nothing assholes.
The GOP has reduced itself to nothing more than defensive sound bites and trite talking points. Even a middle-weight like Pawlenty seemed dumbfounded when faced with actual facts presented to him from his fellow governors.
Read:
http://cluborlov.blogspot.com/2009/02/social-...
Frankly, I agree with him. If we didn't make _any_ cars for a couple years while the _TRANSPORTATION_ industry (which is NOT the same as the _AUTO_ industry) retooled to something sustainable for America, that would NOT be a bad thing.
Yes, it sucks for the auto workers. Call me a bad person but I would like to see the workers who make the little land mines that children pick up put out of work too.
South Carolina Governor Mark Sanford is Delusional when he refers to the recovery of the South's textile and furniture industries, that allegedly took place without government bailouts.
Sure, there were no bailouts.
There's also been NO RECOVERY.
idiot
.......the idea of "creative destruction" is exactly correct. The American auto companies have such messed up business models and the contracts with unions are often convoluted that scrapping everything and starting from scratch would likely result in significantly better business models and labor agreements.
However, as Gov. Granholm pointed out in this discussion, we are dealing with real life people, human beings, here. There is no way to "creatively" destroy the livelihoods and basic survival systems of people.
So, we absolutely have to find a way to retool without total destruction unless we are willing to fund a huge, indefinite safety net for each and every auto worker and the workers of related companies/industries (which, of course, is utterly inefficient).
One more thing, Gov. Sanford said the car companies in his state did not ask for bailouts. This is not true. They didn't ask for bailouts from the U.S. government, but they did from Germany:
http://www.bmwblog.com/2008/11/08/bmw-eyes-ge...
They are not patriot to the citizens or this country or our country..
If you can not see that corporations and republicans for the past 20 plus years have been throwing the American citizens under the bus for their wealth , power and control over this Country and its then you are blind as a bat...without it's radar control..
The republicans didn't want to stop the 2 trillion plus already given to the financials institutions or the tax welfare given to the corporations for moving their manufacturing plants and jobs overseas.
They can wave the flag and call themselves patriotic all they wish in front of the news media , but behind close doors and the policies they pass have done more destruction to this country and our citizens then Bin Laden and the terrorist could ever dream of..
Bush said that our enemies are finding new methods to destroy us and ""SO ARE WE"..
Well Bush and he "So Can We" has done a heck of a job of total destruction to our country ,,,, Nice Job Brownie...
We have seen the enemy and it is right in front of us....Every Day....
The terrorist didn't destroy our democracy....
The terrorist didn't destroy our constitution...
The terrorist didn't destroy our bill of rights and freedom..
The terrorist didn't destroy our honor ( torture and treason )..
The terrorist didn't destroy our military....
The terrorist didn't destroy our economy...
And the terrorist didn't destroy and divide us...
It has been our own d... government under the control of corporations , oil companies , financial institutions and the greed of the elected officials which has sold their soul for their own power and wealth and that of this Global (Monopoly) Corporate Empire.
Why should we bailout a German Auto Company that already has State and Local tax exemptions, are not paying some of their American Suppliers and the little guys are going bankrupt.
BMW is eying Germany's bailout plan.
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