Wednesday, December 03, 2008

Automobiles And Demand

MSNBC's Chris Matthews gets a lot of grief, some of it deserved, among liberal bloggers but he also conducts some interviews that are unparallelled on commercial network television. One such exchange took place on December 2 with General Motors President and Chief Operation Officer Frederick "Fritz" Henderson, which included the following (video below the narrative):

MATTHEWS: So the auto industry has made the right decisions. It's followed the consumer. It hasn't advertised its way to heavy vehicles, it's just followed consumer taste. It's not your fault, what's happened. Is that your point?

HENDERSON: Well, actually, no...

MATTHEWS: You're going to make (ph) the Congress-it was simply economic conditions, or was-you know, were the Japanese smarter than us? Were the Germans smarter than us? Do they understand the need for smaller, lighter vehicles that are better on mileage per ton? Have we gone too heavy with our vehicles? Have we really made a big mistake here going with big cars? Is that-you say it's up to the consumer, but advertising is relentless on television, car advertising. You encourage people to buy certain cars, don't you?

HENDERSON: Yes. We promote our vehicles when we develop them and launch them. As I look at it, first of all, we do make mistakes. I think all manufacturers do. We certainly have made mistakes in the past. I think it's-looking forward, it's about how do we get our cars and crossovers, get the right level of fuel efficiency and win in the marketplace? I would say that our competitors-all of our global competitors also launched larger vehicles and pick-up trucks and SUVs because the consumers had a demand for those. And frankly, the products-even our SUVs have segment-leading fuel economy. But they're bigger. And so therefore, we're going to focus our resources on smaller, more fuel-efficient vehicles going forward.


The auto industry, as with virtually every other industry in the United States, will tell us: we make (design/service/sell) what the consumer is demanding, and only what the consumer demands. And conservatives parody this fiction. So Matthews asks this executive: "but advertising is relentless on television, car advertising. You encourage people to buy certain cars, don't you?" This elicits the admission "we promote our vehicles when we develop them and launch them" and the charge "all of our global competitors also launched larger vehicles and pick-up trucks and SUVs because the consumers had a demand for those."

The latter remark should remind us of this: when those of us on the left (and much of the center) talk about the "failed business model" of GM, Ford, and Chrysler, we generally mean that the automakers have not met the demand of American citizens and the need of the nation for vehicles with higher gas mileage. But the automakers (domestic and foreign) will claim that the vehicles they have manufactured- including those with lower gas mileage produced even by the Japanese- have risen to meet the demand of the consumer.

When adherents to economic conservatism (or "fiscal moderates," as the press likes to celebrate them), to whom this kind of thinking is an article of faith, complain about the business model of the domestic automakers, they are not thinking of the need for smaller vehicles with greater gas mileage. Rather, they are exercised that workers can bargain collectively for a middle-class wage and health and other benefits. They appreciate greater demand for oil and the greater profits to which it avails the energy industry and they can tolerate the empowerment of foreign (even Arab) oil producers, including possible veto power over American foreign policy. But strengthening the middle class and the resultant reduction of tensions between it and the lower class, and between whites and minorities, strains even their sense of fair play.

Tuesday, December 02, 2008

Management And The Workers

General Motors, Ford, and Chrysler have submitted to the United States Congress their respective plan of operation if the federal government grants them the up to the $34 billion in emergency aid they have requested.

Part of the proposal entails a salary of $1 per year for the CEO of the three domestic automakers, Robert Nardelli (who already accepts only $1 in annual salary), Alan Mulally of Ford, and Rick Wagoner of General Motors.

That's a good start but, as this report from ABC News indicates, these chief executive officers still won't be homeless any more than the 32 heads of businesses in the Russell 3000 who take $1 a year in base salary have to apply for food stamps. Steve Jobs of Apple takes millions in stock options, owns millions of shares of company stock, and was given a Gulfstream Jet by Apple; Eric Schmidt of Google receiveds hundres of thousands of dollars from stocks and other bonuses and holds 9.5 milllion shares of company stock, currently worth $2.6 billion; Jerry Yang of Yahoo is a billionaire by virtue of founding the company and is a major stockholder; Jeffrey Katzenberg of Dreamworks Animation owns millions of shares, as well as stock and options vested, from recent years; Richard Kinder of Kinder Morgan Energy Products took in a cool $1 million in stock options in 1997; and Glenn Murphy of Gap, a relative pauper, earned $268,102 in "other compensation from the company."

The obvious question, then, is whether compensation of the chief executive officers aside from yearly salary would remain or even increase, and on what basis. But another: ABC News reports also

The UAW, scrambling to preserve jobs and benefits that could disappear with an automaker collapse, agreed to delay the companies' payments to a multibillion-dollar, union-run health care trust and scrap a jobs bank in which laid-off workers are paid most of their salaries, according to a UAW official who spoke on condition of anonymity because details had yet to be announced.

At an emergency meeting in Detroit, the union also agreed to restart contract talks with the Detroit Three to consider further givebacks.


The implicit threat to workers' health care obviously highlights the need to disengage the American health care system from employment or the profits of the insurance industry. Further, if the automakers, as is likely, receive substantial relief, will compensation to upper management revert to the exorbitant level at which it currently exists- and will employee benefits, cut in previous negotiated settlements, ever return even to the current level?

Monday, December 01, 2008

The Economy, 12/07-11/08

Bloomberg News has reported that a committee of the National Bureau of Economic Research, a private, nonprofit group of economists based in Cambridge, Massachusetts, declared on December 1 that the U.S.A. has been in a recession since last December. Bloomberg explains

Although a recession is conventionally defined as two quarters of successive contraction in gross domestic product, the private committee doesn’t require supporting GDP data to make a recession call. Its members focus on month-to-month changes in the economy.
The NBER committee defines a recession as a “significant” decrease in activity over a sustained period of time. The decline would be visible in gross domestic product, payrolls, industrial production, sales and incomes.


Responding to the country's economic ills, a former U.S. Senator, according to Bloomberg, has recommended "a $25 billion package of investments in clean energy, job training and unemployment benefits. He said lawmakers should be prepared to allocate another $75 billion."

This sounds insufficient, but the idea came from John Edwards- in December 2008. Campaigning in Lisbon, Iowa, Edwards argued "hard-working families across America are already struggling to make ends meet. Before things get worse, I urge Congress to take action immediately to strengthen our economy and create new jobs." And when Edwards the following month attacked Bush's proposal hours before the President would unveil it at his State of Union Address on January 18 (with the other presidential candidates, Clinton and Obama, also criticizing the proposal), the spokesman for the Republican National Committee childishly remarked

John Edwards’ attacks are nothing more than desperation from a candidate frantically seeking attention. The tax refunds Edwards is so quick to discount may not cover more than a few of his haircuts, but they would be valuable relief for millions of Americans.

And so today Federal Reserve Chairman Ben S. Bernanke noted the economy “will probably remain weak for a time." If the recession continues another five months, it will be the longest downturn since the Great Depression.

Just another example, I guess, of the leadership vacuum of the last eight years.

Sunday, November 30, 2008

A Man, A Gun, And A Shooting

It seems that sometime-star wide receiver Plaxico Burress of the New York Giants has a bit of a legal problem.

Mr. Burress appeared with Giants linebacker Antonio Pierce and running back Ahmad Bradshaw at the entrance of the Latin Quarter nightclub in mid-town Manhattan. Then, according to the New York Daily News

all walked through metal detectors - at which point, Burress informed security he had a gun. He was then pulled aside and frisked, revealing a handgun tucked in the waistband of his sweatpants, sources said. A manager was called over, and, after a brief discussion, he decided to allow Burress to keep the weapon. Burress said he needed the firearm because he was bedecked in jewelry and carrying a wad of cash. A security guard was assigned to the players. Burress then asked to go to the VIP area and was escorted up a flight of stairs. At some point, the gun jostled loose from the waistband, and as Burress - who was holding a drink in his hand - grabbed for it, a round went off.

The guys left the club, the gun (later retrieved) was taken to New Jersey somewhere by Pierce. The wide receiver went home and, accompanied by his wife and a friend, arrived at New York-Cornell Hospital in his Cadillac Escalade. He was checked in at 2:45 a.m. and was released some ten hours later after being treated.

A hospital spokeswoman told the Daily News (two consecutive days) that Burress had never been there but Giant employees reported it to the New York Police Department, and Burress probably will be charged with criminal possession of a weapon. Burress' gun had a permit for his gun in Florida, where it had been purchased, but it was not registered in New York.

As someone who is as fond of the New York Giants as, say, a Boston Red Sox fan is of the New York Yankees, I always will defend the right of a Giant receiver to blow a hole in his right thigh. Still, it does raise in a reasonable person at least four "what was" questions:

.... the night club doing a) letting in a guy with a gun; b) not reporting the shooting to police; and c) cleaning up afterward (which, admittedly, follows logically from not informing the authorities)?

....the hospital contemplating apparently committing the Class A misdemeanor by not telling police (who were first notified by the Giants organization) that someone had admitted with a gunshot wound? Two obvious possiblities, neither pretty: the facility was covering up for a celebrity (Burress had given his name as "Harris Smith" but he was recognized by hospital workers); or the facility typically covers up for violent offenders by not reporting the presence of their victims to law enforcement authorities.

....the NYG football team (which at least didn't cover up the incident) thinking when it allowed both Bradshaw and Pierce to play in the game (won by the Giants 23-7) on Sunday against the Redskins? Probably the organization recognized the legal issues in which it would have been involved by taking immediate action against the players, primarily an appeal by the National Football League Players Association and the players' attorney(s). Still, the NFL personal conduct policy (as of early 2007) includes

It will be considered conduct detrimental for Covered Persons to engage in (or to aid, abet or conspire to engage in or to incite) violent and/or criminal activity. Examples of such Prohibited Conduct include, without limitation: any crime involving the use or threat of physical violence to a person or persons; the use of a deadly weapon in the commission of a crime; possession or distribution of a weapon in violation of state or federal law....

....a guy who would accidentally shoot himself doing with a gun in a nightclub? Not figuratively, but literally- what would he be doing with it? A fellow who recently signed a five-year, $35 million contract would be able to hire a bodyguard or two.

At least, the New York City Police Department should be commended. As of this point, it- almost alone- has done nothing irresponsible, morally reprehensible, or criminal.

Friday, November 28, 2008

At Wal-Mart

Those men and women hungry for bargains on Black Friday can sure kill the holiday spirit.

The New York Daily News reports that 34-year-old Jdimytai Damour, a (temporary) maintenance worker, was trampled to death after a Wal-Mart store in Valley Stream, N.Y. store opened at 5:00 a.m. the morning after Thanksgiving. One employee described the victim as "bum-rushed by 200 people" while "they took the doors off the hinges. He was trampled and killed in front of me." Employees unsuccessfully tried to save the victim and contain the rioters, some of whom, when told they had to leave the store, reportedly kept shopping while screaming "I've been on line since Friday morning!"

Police arrived and the store was closed- till 1:00 p.m., when hundreds of shoppers were welcomed. A spokesman for the Nassau County (N.Y.) Police Department stated that an investigation would be conducted to determine whether anyone responsible for the death of Mr. Damour could be identified. He also commented that Wal-Mart had insufficient security on hand.

Perhaps the District Attorney's office might want to consider the possible culpability of the corporation in this affair. Meanwhile, we can lament yet another demonstration of the secularization, and commercialization, of Christmas, as noted by Ian Anderson/Jethro Tull here and here.



Rush, Barack, And The Market

Rush Limbaugh, the biggest of the big of talk radio, assured us on November 6, 2008:

The Obama recession is in full swing, ladies and gentlemen. Stocks are dying, which is a precursor of things to come. This is an Obama recession. Might turn into a depression. He hasn't done anything yet but his ideas are killing the economy. His ideas are killing Wall Street....

The Dow Jones Industrial Average is down 780 points since Obama won the election, and he hasn't passed anything yet. The seas have not parted; the sea levels have not declined.


President-elect Obama announced his economic team on Friday, November 21, 2008. The previous day, the Dow Jones Industrial Average had closed at 7552.29, Nasdaq at 1375.12, and the S&P 500 at 752.44. As of the end of the day today, November 28, 2008, these averages stood at, respectively: 8829.04; 1535.57; 896.24. This would be an increase for the Dow Jones Industrial Average of 16.9%, Nasdaq of 11.7%, and the S&P 500 of 19.1%. This since President-elect Obama announced the people who will help him take charge of the economy, after eight years of neglect.

Limbaugh concluded "Obama is not facing a sinking economy. He's not facing a sinking economy. That's exactly right. He's causing it! He is causing the sinking economy." O.K., Rush: after nearly eight years- 408 weeks- of George W. Bush, President Bush has had nothing to do with our economic calamity. After 0 weeks as President, Barack Obama has caused an economic crisis.

It's hard to believe, but there are people who listen to Rush Limbaugh and take him seriously.

Tuesday, November 25, 2008

Hatred Of America From The Right

Thinkprogress.org reports that on his November 25 radio program, right-wing talker Glenn Beck stated

So the question is, do states have the right to secede anymore? Because it was a compact. It’s not perpetual. In fact, in the Declaration of Independence it says it is our right, it is our responsibility to get away from a government who doesn’t listen to us any more.

Do you even have a right to do that as a state any more? Do you have the right to say, “You know what, you guys are going down a path that I don’t even agree with”? Is that even possible?


You will recall that Sarah Palin and husband Todd Palin attended the 1994 convention of the Alaska Independence Party (motto: Alaska First-Alaska Always"), at which time Todd joined the party, where he remained a member for several years. Demonstrating that her sentiments had not materially changed, Mrs. Palin recorded a video greeting that was played at the 2008 convention of the AIP in Fairbanks. Besides referring to Alaskans as the "hardest working, most grateful Americans" (which leaves those of us from the other 49 states, the District of Columbia, Puerto Rico, and elsewhere out), Governor Palin told the Party to "keep up the good work, and God bless you."

There you have it: two of the luminaries of the Republican right- the talk radio host with more listeners than all but two other individuals, and the GOP's vice-presidential nominee in 2008 (a few months after she lauded the secessionists in Fairbanks). What is it with the right wing of the Republican Party? Why are they intrigued by secession? And why do they always blame America first?

A Sales Job

An evangelical minister in Texas has come up with a twist on the "health and wealth gospel"- believe in God, pray to God, and prosper- of nouveau Christian clergymen.

Reverend Ed Young of the Fellowhip Church in Grapevine on November 23 urged married couples in his congregation to engage in a week of "congregational copulation." The following Sunday the 47-year-old Reverend Young, who has been married for 26 years and has four children, urged the couples to "keep on doing what you've been doing this week. We should try to double up the amount of intimacy we have in marriage. And when I say intimacy, I don't mean holding hands in the park or a back rub."

This advice is strictly biblical, Reverend Young assures us. He quotes "two shall become one flesh," an apparent reference to Genesis 2:4, which has little if anything to do with sexual relations; and "do not deprive each other of sexual relations," the latter apparently a reference to 2Corinthians 7:5, in which Paul writes "stop depriving one another, except by agreement for a time, so that you may devote yourselves to prayer..." Have fun, so God loves you: follow his advice and you'll learn "How to move from whining about the economy to whoopee!”

This sounds a little like the famous Joel Osteen of Lakewood Church in Houston, Texas (Texas again!), who contends

A lot of psychological principles and even medical principles, you see them coming around to what the Bible said hundreds of years ago: a merry heart is good like a medicine. I’ve read many articles on how a positive attitude, laughing every day and being happy, does help people to recover and live longer.

It's really comforting to think that a sovereign God wants nothing more and nothing less than for us to be happy, "laughing every day (with) a merry heart." For a more traditional, more orthodox (and what is known as a "reformed" perspective) Christian view, check out the writings of Michael S. Horton, PhD. of Westminster Seminary in California.








Saturday, November 22, 2008

Obama's Choice

Senator Claire McCaskill (D.-Mo.) was a very early supporter of, and constant surrogate for, Barack Obama, and fittingly, backed the bid of the Independent Senator from Connecticut, Joe Lieberman, to remain chairman of the Senate's Homeland Security and Governmental Affairs Committee. In an article in Salon, Mike Madden quotes the Missouri Senator as saying:

He has sent a very clear signal since his election -- one of humility and one of reconciliation and healing, and it's very clear to all of us that he doesn't want to play the old political games. Old politics would have been revenge and retribution. New politics would be, let's get to work.

In an ironic way, McCaskill is half right. Unlike the comments of some such as Daily Kos founder Markos Moulitsas ("what happened, happened in the Senate- not in the White House, in the Senate"), McCaskill seems to understand that the primary reason Lieberman (who lost his position as chairman of a subcommittee) was given an ineffectual slap on the wrist was Barack Obama. It was the President-elect's spokesperson, Stephanie Cutter, who, in an e-mail of November 11, wrote Greg Sargent of Talking Points Memo

We aren't going to referee decisions about who should or should not be a committee chair. President-elect Obama looks forward to working with anyone to move the country forward. We'd be happy to have Sen. Lieberman caucus with the Democrats. We don't hold any grudges.

If the leader of your party, recently elected in a near-landslide and currently enjoying great popularity, says (through a representative) a)"we'd be happy to have Sen. Lieberman caucus with the Democrats" (though evicting Lieberman from the caucus never was on the table); and b)"we don't hold any grudges" toward a politician who has said that you are "a talker" who hasn't always "put country first," the message is clear: I want that guy to remain in a position of influence. And another message: cross me, and I will reward you.

At some point during what he hopes will be an eight-year run, President Obama will be faltering in the polls with little support among the American people. And he will need the vote of a wavering member of Congress, who will then remember the message Barack Obama sent in his advocacy of another member of Congress who actively, and virulently, attacked him throughout the campaign. And that member will know that bucking President Obama carries no retribution and no consequence, except possibly reward.




Al Qaeda Concerned

Did Al Qaeda want Barack Obama to be elected President of the United States?

Evidently, the McCain-Palin campaign thought so. A comment posted in October on a website linked to Al Qaeda called for the election of John McCain. ABC's Jake Tapper reported on his blog on 10/23 that Randy Scheunemann and former CIA chief James Woolsey and Randy Schuenemann responded by suggesting that Al Qaeda preferred Obama. Woolsey asserted "it is ridiculous to believe that in its heart of hearts Al Qaeda wants John McCain to be the President. And it is ludicrous." Scheunemann, one of McCain's foreign policy advisers, claimed "only Senator Obama has advocated withdrawal and surrender to Al Qaeda in Iraq when Al Qaeda was at the peak of its power."

On November 19, Al Qaeda's no. 2 leader posted a statement on numerous militant web sites. In his 11 minute, 23 second video, Ayman al-Zawahiri emphasized "America has put on a new face, but its heart full of hate, mind drowning in greed, and spirit, which spreads evil, murder, repression and despotism continue to be the same as always." He called Colin Powell, Condoleeza Rice, and President-elect Obama "house negroes" and claimed

You represent the direct opposite of honorable black Americans like Malik al-Shabazz, or Malcolm X (may Allah have mercy on him). You were born to a Muslim father, but you chose to stand in the ranks of the enemies of the Muslims, and pray the prayer of the Jews, although you claim to be Christian, in order to climb the rungs of leadership in America. And so you promised to back Israel, and you threatened to strike the tribal regions in Pakistan, and to send thousands more troops to Afghanistan, in order for the crimes of the American Crusade in it to continue.

Al Zawahiri appears to fear his "brothers" will not understand that Americans "continue to be captive to the same criminal American mentality towards the world and towards the Muslims." He finds a need to explain the "criminal, trespassing Crusader, continues to be the same as ever." He seems to be angry that the U.S.A. has chosen as its leader someone who will not incur the enmity in the Muslim world as President Bush and that his co-religionists throughout the world now have a more benign view of our nation.

And what if an Al Qaeda official had delivered this vicious, hateful, bigoted message prior to the election? Almost certainly it would have evoked great sympathy- and empathy- for Barack Obama, a sense that the mission of the Illinois senator is the same as ours. Referring to the Democratic nominee as a supporter of Israel, a Christian, and, especially, as among "the enemies of the Muslims" would have allayed a few of the concerns of voters. His victory would have been almost assured and his winning margin of 6.8% enhanced. It's likely Al Qaeda understood the likely impact of such an attack and wisely (though without avail) held off its denunciation until the election of Barack Obama, an event which appears to have alarmed the terrorist organization.