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Sunday, March 08, 2009
The undertaker: Richard Shelby tries to provoke a run on Citibank
Richard Shelby proved that he is far too crazy to be in the United States Senate, when this morning on "This Week," he suggested a surprising fix to the banking crisis: close down Citigroup and other major banks. Writes George Stephanopoulos:
Sen. Richard Shelby, R-Ala., the top Republican on the Senate Banking Committee, said today on "This Week" that the government should let trouble banks fail.

"I don't want to nationalize them, I think we need to close them," Shelby told me this morning. "Close them down, get them out of business. If they're dead, they ought to be buried," he said. "We bury the small banks; we've got to bury some big ones and send a strong message to the market. And I believe that people will start investing [again] in banks."
Shelby didn't explain, nor was he asked, by the way, how pulling a Lehman Brothers on potentially dozens of megabanks would inspire investors to re-enter the markets, nor did he explain the particular free market principle behind having the federal government come in with the padlocks and shut down a private bank. George did ask Shelby if he had a particular hit list in mind:
I asked Sen. Shelby if he was referring specifically to Citigroup, the struggling bank that has received about $45 billion in taxpayer money.

"Well whatever. Citi's always been a problem child," said Shelby, who has long opposed giving federal TARP money to struggling banks.

But Thomas Donohue, head of the U.S. Chamber of Commerce, disagreed.
"It's not practical to talk about closing a bank that is integrated throughout the whole global economy," he said. "It is practical to talk about buying some of those assets away from those banks and holding them in an institution that would have both public and private money."
Shelby (and other Confederate GOPers) had the same prescription for Detroit's Big Three automakers: let them go out of business (the better to boost sales among non-union, Japanese and German firms who prefer the congeniality and relative worker impotency of the south.

Question: is it responsible, in the middle of a recession, for a United States Senator to suggest killing off major banks, by name? If there is a run on Citi, or a major sell-off, on Monday, would Shelby be to blame?

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posted by JReid @ 3:45 PM  
Thursday, February 12, 2009
Gregg on Gregg
Gregg tries to explain his sudden exit, not just from Commerce, but also from the Senate (he suddenly won't be running for re-election...)



It's "not his personality"??? That's the explanation? Come on, Judd. What's this really about? Some options:

Gregg withdrew because he discovered he could no longer use the position to blow up the Census... Actually this is a serious issue that came up almost immediately upon Gregg's nomination (or self-nomination, depending on whom you believe...) The issue is about Congressional apportionment after 2010:
In addition to not being a fan of the Commerce Department in the past, President Obama’s Commerce Secretary nominee, New Hampshire Sen. Judd Gregg, wasn’t a fan of spending a lot of money on the 2000 Census.

Especially given than Census undercounts tend to favor the GOP, The New York Times editorializes about whether or not Obama has thought through all the political ramifications of the Gregg nomination.

Good example. Texas is expected to gain as many as three House seats.

What if undercounts cost the D/FW Metroplex, or Houston, a seat, and a Democratic one at that?

Aha. In response to complaints from black and Hispanic leaders, the Obama Administration is pulling the 2010 Census out from Commerce control.


Oh, and option number two is that Karl Rove was about to out him as gay, or a tax cheat or something like that...

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posted by JReid @ 11:34 PM  
Friday, December 12, 2008
Granholm says it all
The governor of Michigan makes it plain:

Michigan Gov. Jennifer Granholm (D) said it was "un-American" for senators to have voted against approving a bailout of troubled automakers last night, saying their vote may cause a recession to become a depression.

"It is unacceptable for this un-American, frankly, behavior of these U.S. senators to cause this country to go from a recession into a depression," Granholm said during a radio interview Friday morning.

Negotiations over an agreement to assist Michigan's Big Three stalled last night in a 52-35 vote on a procedural motion to bring up the package for a vote. Republicans largely opposed the bill after it failed to win concessions from the United Automotive Workers union on wages and benefits.

“It is such an unbelievable stab at workers across the country,” Granholm added. “You give this big bailout to these financial institutions–don’t ask a single question, they can do what they want–and then you lay the blame for the auto industry, which is a victim of this financial meltdown, on the backs of the people who are working on the line.”

Bottom line: there is a party of working men, and a party of capitalists, and the latter's mantra is "low prices, low wages, maximum profits."

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posted by JReid @ 5:41 PM  
When Katrina hit, the Big Three didn't ask the south for a 'detailed recovery plan'
Great points made in this piece by the Detroit Free Press' Tom Walsh.

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posted by JReid @ 5:03 PM  
Gettelfinger names names
The UAW president calls out the Dixie Axis:

UAW President Ron Gettelfinger said today that U.S. automobile companies are being put at a disadvantage by government in competing against Volkswagen’s new auto assembly plant in Chattanooga.

The union leader questioned why government leaders in Tennessee are willing to provide assistance to the German-based Volkswagen while the state’s U.S. senators declined to back a federal loan to help the Big Three U.S. car makers.

Mr. Gettelfinger said that trying to equalize UAW pay with what foreign car makers pay in the United States, as urged by U.S. Sen. Bob Corker, R-Tenn., is like comparing apples to oranges. In its home country, Germany provides government-paid health care for Volkswagen workers, and VW is receiving $577.4 million in tax breaks and direct assistance from Tennessee governments to build an automobile plant in Chattanooga.

They use taxpayer dollars to subsidize our competition,” Mr. Gettelfinger said during a news conference. “It doesn’t help our industry.”

The GOP has, officially I think, lost the Great Lakes region for at least a generation. Ohio included. Good luck being the party of the former Confederacy, boys.

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posted by JReid @ 4:50 PM  
Yes to banks, no to working stiffs
ThinkProgress has the list of Senators who said "oh yeah!" to bailing out Wall Street bankers to the tune of $700 billion, but who couldn't find it in their little coal colored hearts to help the American auto industry. Here they are:
Sen. Max Baucus (D-MT)
Sen. Robert Bennett (R-UT)
Sen. Richard Burr (R-NC)
Sen. Saxby Chambliss (R-GA)
Sen. Tom Coburn (R-OK)
Sen. Norm Coleman (R-MN)
Sen. Bob Corker (R-TN)
Sen. John Ensign (R-NV)
Sen. Chuck Grassley (R-IA)
Sen. Judd Gregg (R-NH)
Sen. Orrin Hatch (R-UT)
Sen. Kay Hutchison (R-TX)
Sen. John Isakson (R-GA)
Sen. Jon Kyl (R-AZ)
Sen. Blanche Lincoln (D-AR)
Sen. Mel Martinez (R-FL)
Sen. John McCain (R-AZ)
Sen. Mitch McConnell (R-KY)
Sen. Lisa Murkowski (R-AK)
Sen. John Thune (R-SD)
There were another 10 Senators who voted for the TARP but were absent for last night's vote on the automakers:
Sen. Lamar Alexander (R-TN)
Sen. Joe Biden (D-DE)
Sen. John Cornyn (R-TX)
Sen. Larry Craig (R-ID)
Sen. Lindsey Graham (R-SC)
Sen. Chuck Hagel (R-NE)
Sen. John Kerry (D-MA)
Sen. Gordon Smith (R-OR)
Sen.Ted Stevens (R-AK)
Sen. John Sununu (R-NH)
Some had better excuses than others for not being around:
iden was tending to transition duties, while Kerry was in Poznan, Poland, participating in U.N. climate change talks. Alexander was home recovering from surgery. Why did these other Senators feel auto workers weren’t as deserving as Wall Street? We’d like to know.
Yeah, me too...

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posted by JReid @ 4:39 PM  
To the rescue: Henry Paulsen and George Bush???
The White House appears ready to step in to prevent General Motors and Chrysler from collapsing on George W. Bush's watch. From the WaPo:
The Bush administration said today it is willing to consider using funds from other sources to provide emergency aid to the nation's Big Three car companies following the Senate's rejection Thursday night of a congressional bailout plan.

The statement from White House spokeswoman Dana Perino marks a shift in tone for the administration, which has so far rejected the idea of using money from the $700 billion Troubled Asset Relief Program or other sources under its control to help the auto industry survive. After the collapse of negotiations in Congress, however, the White House said all options are on the table to help keep the automakers in business. GM and Chrysler have said they are in critical need of help, while Ford's position is less dire.

"Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms," the White House statement said. "However, given the current weakened state of the U.S. economy, we will consider other options if necessary -- including use of the TARP program -- to prevent a collapse of

"A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time," the statement said.

An official at the Treasury Department, which administers the TARP, said separately that the agency was "ready to prevent an imminent failure" of the auto companies, the Reuters wire service reported.

The reason for the urgency: suppliers to GM can't extend credit to the company so it can keep producing cars, so GM will have to ... stop producing cars. And the reason for that? The banks who received hundreds of billions of your tax dollars, refuses to lend the money out, including to the suppliers.

DETROIT -- Cash-starved General Motors Corp. and Chrysler LLC within weeks will be hit by $9 billion in bills for already-delivered auto parts, a tab they likely can't afford to pay without emergency government assistance.

Parts suppliers, hammered in recent months by a severe downturn in U.S. auto sales, face shortfalls of their own if the auto makers fail to pay.

The impending payments to suppliers, which in GM's case account for nearly half the cash the company had available at the end of the third quarter, present the most immediate threat to the auto makers as they plead for a lifeline from the Bush administration following the defeat of a $14 billion auto loan package late Thursday by the Senate.

Concerns are rising that parts manufacturers now could take steps to tighten payment terms, which would accelerate the cash burn that threatens the viability of the auto makers.

"We need to satisfy suppliers that there is going to be a tomorrow," United Auto Workers President Ron Gettelfinger said Friday at a news conference.

"If suppliers believe they can't operate, what are they going to do? They aren't going to deliver the goods. If they don't deliver the goods, the plants go down," the UAW chief added.

The reality is that many of the suppliers are just as challenged as GM and Chrysler, which have said they need more than $10 billion in government assistance by year's end to avoid collapse. Just as the auto makers rely on their suppliers and the trade credit they provide, parts manufacturers have suppliers of their own.

Meanwhile, in one of those patented "strange bedfellows situations," the UAW is now putting its faith in President Bush, having been failed by a weak Senate majority leader, and a wicked bunch of Dixiecans whose goal, after all, was to crush the UAW.

UPDATE: Dubya has apparently been warned by George Voinovich that if he doesn't act, he'll be known as "George Herbert Hoover Bush," and apparently, the Dark Lord sent the same message to his party ...

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posted by JReid @ 4:28 PM  
Big Three rescue falure meets Asia
Asian markets are down sharply this morning after southern Republicans tank the auto bailout. From CNN Money, proof that Shelby, Corker and McConnell's scheme to tank Detroit in order to
help Japan and Germany didn't quite work that way:

A week of solid gains ended on a sour note for Asian markets Friday as stocks across sectors got hammered after a $14 billion government bailout of the Big Three automakers collapsed in the U.S. Senate.

Regional car makers such as Toyota Motor Corp., Honda Motor Co. and Hyundai Motor Co., who depend heavily on the U.S. market, plunged in afternoon trading.

Major global currencies also plunged against the yen as risk-averse investors reversed their short sales of the Japanese currency after Senate Majority leader Harry Reid said the Democratic and Republican Senators failed to reach a compromise on the bailout package, which cleared the House of Representatives Wednesday night.

Meanwhile, GM is seeking advice from bankruptcy counsel.

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posted by JReid @ 8:21 AM  
Thursday, December 11, 2008
Three-time un-American
Left to right: Senators Bob Corker (R-TN), Mitch McConnell (R-KY) and
Richard Shelby (R-Bama.) Are they acting as agents of foreign governments?


The pared down, $14 billion Big Three bailout loan deal, passed the House today, but appears dead in the Senate after talks broke down late tonight, mostly because of the objections of a trio of southern Senators, who had vowed to kill the bill there with a good old fashioned, Old Dixie filibuster, unless the auto workers' union agrees to "bring their members' wages and benefits in line with those of Japanese automakers.' And while you digest the fact of American Senators calling for U.S. workers to bow and scrape for whatever foreign companies have on offer, ask yourself these questions:

Why would three southern Senators want to kill the American automotive industry? Would United States Senators really attempt to crush a crucial part of our homegrown industrial base on behalf of foreign automakers? And if so, shouldn't Richard Shelby of Alabama, Bob Corker of Tennessee and Mitch McConnell of Kentucky have to register with the attorney general as agents of foreign governments? After all, Japan and Germany heavily subsidize their auto industries, and both countries provide universal healthcare, which is one big reason Toyota, Honda, Volkswagon, et.al have much lower legacy costs than the Big Three. And when these companies earn profits, what they don't pay in federal and payroll taxes, goes right back to their home governments, hence our three Senators are in essence, lobbying on behalf of Tokyo and Berlin.

To backtrack, these three gentlemen, and I use the term very loosely, all-but promised to kill a deal to bail out the Big Three in Washington, even though one of them, McConnell, was key to passing the much bigger bank bailout. The problem? Again, not bailouts, per se. They're for them when it comes to the banks (except Corker, who voted against the Wall Street handout.) The trouble here, is that all three of these guys have major foreign automakers implanted in their states, those automakers having been drawn to places like Alabama, Kentucky and Tennessee by billions of dollars in ... you guessed it ... (state) government handouts. Crippling Detroit, even at the cost of millions of American jobs, could only help the Senators' foreign clients out, in no small part by breaking the United Auto Workers union, and preventing it from attempting to unionize southern auto workers, thereby reserving the preferred status conferred on the Toyotas, Hondas and Volkswagons of the world. From the Detroit Free Press:

Alabama is home to plants for Mercedes-Benz, Honda, Hyundai and Toyota. Tennessee is getting a new Volkswagen plant and is home to Nissan’s North American headquarters and other manufacturing facilities.

Georgetown, Ky., in McConnell’s home state, is the site of Toyota’s biggest plant outside Japan.

Sen. George Voinovich, R-Ohio, a supporter of the auto industry rescue plan, said he’s still waiting for specifics on what the legislation’s critics are demanding.

“I think it’s antiunion. I think that’s the motivation behind it,” said Mike Kennedy, 44, of Warren, a member of UAW Local 961 who works at Chrysler’s Detroit Axle plant on Lynch Road. “They want us to file for bankruptcy so they can walk away from their obligations.”

Kennedy said he’s hearing a lot of anger toward Southern senators among rank-and-file members, likening it to a civil war ready to break out again, North against South.
And then there's the small matter of politics: the UAW is a big booster of Democratic Senate candidates, and who needs that, right boys?

What this crisis has created is the unbelievable spectacle of supposedly loyal Americans, starting with Mssrs. Shelby and Corker, demanding that American auto workers accept whatever wages foreign automakers pay their employees, essentially reducing these United States Senators to bag men for the former Axis powers. In fact, freshman Senator Corker's plan read like a World War II appeasement letter:
Corker's four-point plan requires existing bondholders to accept 30 cents on the dollar to help reduce automakers' debt, and force the car companies and United Auto Workers to bring wages immediately in line with foreign automakers. It also would drop supplemental unemployment payments to workers. He also wants the UAW to agree to take half of the payments they are owed from Detroit's automakers to fund a trust the union would manage beginning in 2010 to pay for retiree health care. In exchange, General Motors Corp. and Chrysler LLC would get up to $14 billion in emergency loans immediately to help them fund their operations. If they didn't get concessions by March 15, they would have to file for bankruptcy.
So what else is Bobby Corker famous for, besides making oodles of money in real estate and beating Harold Ford Jr. in 2006 with the help of that "call me" ad? Luring foreign automakers to his home state, of course, and hating on Detroit:
He grew up in Chattanooga, a city that was repeatedly rejected by U.S. auto makers as a site for new plants. But Volkswagen turned around Chattanooga’s fortunes in July by agreeing to build a $1 billion assembly plant near the city–the German auto maker’s first assembly plant in the U.S. Volkswagen plans to build hundreds of thousands of vehicles there in the next few years, providing 2,000 manufacturing jobs as well as countless more jobs in supply and logistics. So, where the Big Three had let the city down, Volkswagen capped the city’s long-desired industrial revival. As Corker told the Associated Press at the time, the city “will never be the same again.” Volkswagen is building the plant to compete with Toyota Motor, which puts Chattanooga inside the most competitive dynamics in the global auto industry.
McConnell, the Senate minority leader, has made no secret of his eagerness to see the American auto industry say "sayonara" so that the Japanese can keep greasing up non-union Kentucky:

GOP Senate Leader Mitch McConnell’s not so concerned about the death of the US auto industry because Japanese companies make cars in his state:

“We also have other auto manufacturers who are doing quite well,” McConnell said, naming Toyota’s Georgetown, Ky., operation. “It happens not to be American companies and that is sad. But it’s not like we don’t have success in the auto industry. We do.”

And Shelby, the ranking Republican on the Senate banking committee, has been equally skeptical of the absolute need to have a strictly "American" automobile industry:

WASHINGTON (Nov. 19) - Sen. Richard Shelby, who represents a state with 134,000 people who help build cars for Asian and European companies, was unpersuaded Tuesday when American auto executives asked Congress for emergency financial aid to stay afloat.

"Are we here in the Senate being asked to facilitate a stronger, more competitive auto manufacturing sector, or to perpetuate a market failure?" Shelby asked at the opening of a standing-room-only hearing on Capitol Hill.

After the hearing, he concluded that it was the latter.

And about those state subsidies, you know, the government money being thrown at an auto industry, only the governments are former Confederate states and the automakers are NOT American? Well ... it's a LOT of money:

Shelby's position is not merely that of a fiscal conservative. His home state has provided millions of dollars in taxpayer subsidies to lure Honda, Hyundai, and Mercedes-Benz to build huge plants there. Indeed, some critics believe that without the incentives from Alabama - and similar tax breaks given by a number of other states to a dozen foreign automakers - the Detroit companies would not need a federal bailout.

The foreign-based automakers have received relatively little attention during the debate over the auto bailout bill because they have not asked for money from Con gress. Yet their role is immense: In 2007, for the first time, foreign firms produced a majority of cars sold in the United States. While Detroit's auto industry is shutting plants and slashing union jobs, the foreign-based auto companies have been booming, particularly in the South, with new nonunion plants slated to open in Tennessee and Georgia.

House Financial Services Committee chairman Barney Frank of Massachusetts, who is playing a key role in hammering out a loan deal, said in an interview that some opponents are "completely hypocritical" because they back local tax incentives to lure foreign companies that now pose some of Detroit's stiffest competition. Frank also denounced those members of Congress who oppose the assistance for the Detroit automakers as a matter of fiscal prudence at the same time they fight for agricultural subsidies for their states.

So how much money are we talking?

It is difficult to ascertain the exact amount of tax subsidies provided to the foreign automakers because they are provided by so many localities and in different ways, including property tax breaks and corporate tax abatements. One study found that the total subsidies to foreign automakers exceeded $2 billion.

Alabama paid more up front per job in tax subsidies to the foreign automakers than Detroit is asking per job with the loans, said Cole of the automotive center.

I've heard figures of upwards of $250,000 per job gained. Meanwhile, the GOP is about to preside over the flushing of 3 million jobs and the pensions of 850,000 retirees ... many in swing states. For Shelby, Corker and McConnell, who live in ruby red states, that may not matter. But it will matter to their party, which will be blamed ... make no mistake about it ... if the Big Three, or even just General Motors, vanish under Bush's watch. Believe it.

I say all of this, by the way, as one who is no fan of the "built in obsolescence" crowd that's been running the U.S. auto industry for a generation (and the moron politicians who heaped SUV tax break largesse on them), and as somebody who specifically detests the Ford Motor Company (my three-year-old Expedition having literally exploded in my driveway a couple of years ago, and the company having sniveled out of responsibility for it, and sent me a nice letter about the ignition switch recall the NEXT DAY.) My mother had a Chevy Cavalier when I was growing up that was a piece of shit, too. In fact, all our cars when I was growing up were made by General Motors, and the only one that was worth a plug nickel was my gigantic 1974 Buick Apollo that my mom's best friend gave me for $300 my senior year in high school (in 1986. Hey, you can fit a lot of friends in a Buick Apollo...) I have, on occasion, vowed out loud to never buy another mother-bleeping American car. And yet, at my house, we have one foreign and one domestic -- an Acura and a Jeep Grand Cherokee Limited. I drive the Jeep. And I must admit, I love the bloody thing. But what's most important is that for all their faults, and I think all of the management should be fired, I believe that whatever Shelby, Corker and McConnell might think, America simply cannot remain an industrial power without a homegrown manufacturing industry, and right now, the auto industry is the biggest manufacuring sector left. If we let it go, even 10 million Honda jobs in Dixie at Wal-Mart wages won't buy us back our economic clout.

I end with a few prophetic words from Patrick J. Buchanan:

In the 1950s, we made all our own toys, clothes, shoes, bikes, furniture, motorcycles, cars, cameras, telephones, TVs, etc. You name it. We made it.

Are we better off now that these things are made by foreigners? Are we better off now that we have ceased to be self-sufficient? Are we better off now that the real wages of our workers and median income of our families no longer grow as they once did? Are we better off now that manufacturing, for the first time in U.S. history, employs fewer workers than government?

We no longer build commercial ships. We have but one airplane company, and it outsources. China produces our computers. And if GM goes Chapter 11, America will soon be out of the auto business.

Our politicians and pundits may not understand what is going on. Historians will have no problem explaining the decline and fall of the Americans.


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posted by JReid @ 10:20 PM  
Sunday, November 02, 2008
Pray for Senator Durbin
Sen. Dick Durbin's oldest daughter hies died at age 40.

Christine A. Durbin, the oldest daughter of Illinois Sen. Dick Durbin, died Saturday at age 40, according to a spokesman for the Democratic senator.

Christine Durbin died in a Washington, D.C.-area hospital from complications relating to a congenital heart condition. She had been hospitalized for several weeks, Durbin spokesman Joe Shoemaker said.

Sen. Durbin was with his wife, Loretta Durbin, and family in the Washington, D.C., area on Saturday.

"Most of the family was at her bedside when she passed away," Shoemaker said.

Christine Durbin worked for 16 years for the U.S. Department of Agriculture in the emerging markets division. She lived with her husband and son in a suburb of Washington.

She "fought a heroic lifelong battle with heart disease," Shoemaker said. "Our thoughts and prayers are with the entire Durbin family."
Durbin was the man who first approached Barack Obama about running for president. The senior senator from Illinois is also, by all accounts, a good and decent man, and a statesman.

From my favorite book of the Bible, the Book of Matthew: "Blessed are they that mourn: for they shall be comforted." (Matthew 5:4) The prayers of my family, and those of millions of Americans, are with you, Senator.

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posted by JReid @ 8:34 AM  
ReidBlog: The Obama Interview
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