KCRWs Left, Right & Center 11.21.08 Show
**** HAPPY THANKSGIVING EVERYONE *****
PLEASE see the "LINKS" post for all links mentioned on today's show.
Economy, Stocks/Auto Bailout/Obama’s Cabinet Picks
As the economy tanks, the panelists
agree with a Paul Krugman column in today’s NYTimes (see links post, next one down), we don’t have 2 months to
wait. Tony wants Obama -- knowing there’s only one president at a time – to take
the lead and signal where he’s going with the economy since W can’t get traction
and the Congress is less than useless. He calls the three testifying auto
company execs nitwits for being so tone deaf …and calls Congress stupid for
saying they’re not going to protect 3 million jobs because these 3 nitwits flew
in on private jets. Obama must act now. Arianna says, get rid of the nitwits
and put a general plan for restructuring in action. They talk about Hillary
Clinton – Bob worries she might be a hawk – and Janet Napolitano – Tony says
she’s not qualified… There’s a lot of action on today’s show. Tony’s rant is a
madrigal – and it’s beautiful! (words in the Links post below this one). And please share your thoughts.
Next week's show is: The Future of Capitalism: Which Way Now? A think piece for the holiday.
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Comments
RE:
"Senseless, Nonsense and Center"
I think it's time to rename the show. Perhaps with Ariana being credited with
"plus all of the above".
Talk about too many cooks in the kitchen! Obama isn't even president yet. It was like listening to an episode of Hell's Kitchen. I was hoping Chef Ramsey. Might be just what these guys need.
And there's Tony behind the big black couldron slowing stirring his witches brew thinking, "this is just too easy."
This show managed to avoid blaming the autoworkers for either being lazy malingerers or for just wanting high paying jobs and health care that should only be going to CEOs and executives. Miller even had something sympathetic to say about the UAW president, something you don't hear much in the media. Everyone is down on the auto executives and their private jets. And yet Scheer is right that the bank executives did not have to perform a public kow tow to the Congress. They remain well paid and out of sight. Labor lawyer and author Tom Geihagen asked during the Reagan era how the Republicans let the finance wing take over from the manufacturing wing. This suggests that our economic provblems have been long in developing. Yet, as Scheer points out, we treat the financial people as wizards, the smartest guys in the room who devised all these complex financial instruments that no one can understand. While as Miller points out, everyone knows the problems with their car.
Yet a bankruptcy of the automakers would essentially allow them to jetttison all their liabilities, particularly to the present workers and retirees. The conservative media has been hammering for this, although Blankley did not. Perhaps he is serious about his vision of a conservative movement tht will be populist, rather than serving business elites. We still have the issue of whether the public can demand good business structure and practices from these huge businesses that are entrenched in dysfunctional structures and corporate cultures.
One issue we face is whether the economy can be fixed at all or is it supertanker that can't be steered in the short run. Or perhaps more, like a roller coaster, in an endless boom and bust cycle. Is there such a thing as integrity in the economy, or just periods where everyone is going for everything that can be grabbed, following by periods where they keep their heads down? How much of this is psychology that is fueled by the modern news cycle. A few years ago we heard about endless expansion. Now the media predicts, and perhaps fulfils, intractable recession. How much of this is based on underlying realities, too few manufacturing jobs, too many service jobs, too much debt, not enough integrity in the process. For example, mortgages could be "reality based" with affordable payments, realistic appraisals, no traps or exploding payments, so people could expect to keep them and pay them off. Instead we have explosive complexity, go for it risk taking, speculation and ultimately a house of cards that collapses. The system lacks integrity, good results are exaggerated and prolems are moved off the books. The cop on the beat is either underfunded or in on the scam. And what is the effect of the wars that take billions out of the economy?
Other questions abound. Can we fix the economy without taxing the people who have money? Or can the government just create money, essentially prining it, without having economic wealth to back it up? Apparently throwing money at problems, in this case the unwillingness of banks to lend and enable debt based spending, hasn't worked here any more than conservatives say it does when the recipients are poor. Can the public make business do something other than make themselves rich and happy? Do any economists or government leaders know anything about what to do?
Perhaps the show should have an economist special, replacing the usual panelists with economists from the left, right and center plus one from the independent wierd economist blogosphere. Let the regular panelists, or blog contributors design some questions for them about the economy. Might be fun.
I've listened to the show for quite some time now and I have to wonder out loud why the name.
This is
This is the first time that I disagree with ALL the LTC folks. The Big Three bailout will never work since these companies have proven inept at creating a working business model. Moreover, it is incorrect to equate the Big Three with the entire automobile industry and politicians would be particularly inept at picking winners and losers. There are a number of excellent new companies with very innovative (i.e., non-Detroit) automotive designs and the B3 bailout will just hurt these companies and prevent the free market from working. The Aptera Motors Inc. is one such innovative company and it is close to producing a ultra-fuel efficient car. We should also decrease the ubiquitous subsidies for cars. If an economic stimulus is necessary, it should be used to promote cost effective mass transit systems which, in the long run, will promote economic growth, international competitiveness and hopefully decrease the need to engage in multi-trillion dollar military endeavors aimed at securing oil.
Why not the government fund (in the form of a combination loan and equity) buying the stock of the auto companies and turning them over to the employees with an additional infusion of cash as a loan. Employee owned corporations are fairly successful. The employees can then form the board and hire the management they think would be able to lead them out of bankruptcy (this whole deal could be handled in Chapter 11).
Another benefit of this approach is that the employees would be able to examine the profitability of their companies in light of the restrictive work rules and benefits packages.
This approach would save millions of jobs for the employees for at least an amount of time. If they really do know better how to manage their companies they will succeed. If not, they will go down in a noble effort.
George
From 1980 to today even at 7500 the Dow has significantly out performed the previous 40 years at over 8x increase. Which means stocks technically have been SIGNIFICANTLY over valued for many years.
Just look at the long term graph of its performance. Now I am a bull and think it will be back over 11000 by 2011 which would mean HUGE gains for anyone who has been in the market a significant length of time.
Am I being censured for critizising bob Scheer? Why does my message get truncated?
Anyway, as I was saying. The show should be called, left, more left, marxist, and sensible (tony).
Robert is insane. I wish that just for once he would admit that capitalism has been a good thing. Our free market economy has done more to raise the standard of living for everyone than any other economic system in the history of the world.
Did people screwup for deregulating certain things? Of course, but stop throwing the baby out with the bathwater. Bob's rants are akin to saying people shouldn't have water anymore because a flood happened.
NO water for anyone Bob!!! It's too dangerous.
People can point to the sub-prime problem, hedge funds or lack of regulations, but these are just descriptions. The underlying cause of the crisis is of course the way profit is generated as the surplus value of labor.
The US built its middle class with the rise of unionism and a narrowing of the surplus value at home against the fear of social disorder and communism. Of course large profits continued to be generated by exploiting workers overseas.
When ever greater surplus value could no longer be generated in the US, the wealthy class went of the offensive moving operations overseas, driving down real wages at home, and attacking the welfare state. The result has been a steady widening of the income gap.
What is needed now is a reverse of this, which means workers must hit the streets and demand that the wealthy class give up a great deal of their unearned share. Don't count on the Democratic leadership doing this by themselves as they are part of the ruling class. Obama talks about fairness for fear of sounding like a socialist and he suggests tinkering with small percentages, but it won't be enough if unemployment keeps rising and social order is under threat.
The only other alternative, which is more likely, is for the wealthy class to create a war that will put the unemployed to work. The Iraqi occupation was the first attempt. Will the American people be fooled by this again?
Having grow up in the 'rust belt' as the steel industry imploded due to a lack of innovation/investment, and watched the auto industry head down this same path over the past 3 decades, some bold action is LONG overdue. We now have little choice but to make substantial public investment to keep this industry afloat (do you all really, REALLY want to see what the Great Depression looked like?).
Given this, why shouldn't 'we the people' approach this with a clear aim of getting a strong return for our investment?
While I agree with the above point about employee-ownership, I think the size and scope of the auto industry might make that strategy - on it's own - less viable. We not only need new leadership, we also need to attract new venture capital. It's time for the already allocated funds from the Treasury to be used to acquire controling interest in each of the Big Three (stocks are cheap!). We need to recruit the best minds in engineering into this public/private venture - combining new ideas with the unparalleled manufacturing capacity of these (merged) auto makers - to design, build, and market the next generation of super-efficient vehicles for world markets (cars, trucks, buses, light rail; in markets largely ignored by the Big Three).
It's time to get beyond the paralyzing ideology. This could be a win-win, saving a dying industry while charting one signifcant path to a more environmentally sustainable future.
Rail all you want against 'controling government bureaucrats' but the rotten-corrupt private sector approach in Detroit has had (and blown) it's chance. When we can get this industry back turning a profit and contributing to society, we could then turn it back loose. But not until we can recoup our public investment.
People are still missing the point that the current crisis simply reflects a damage that has already taken place.
Americans have borrowed too much, and then instead of investing the money they spent it on plasma TVs, liberal arts college degrees, kitchen remodelings, and overpriced houses, not to mention SUVs. The government can do nothing but makes things worse, via confiscatory taxes or hyper-inflation. Baby-boomers lived the good life instead of saving their money, and now ordinary Americans are going to pay for it, because there is no other way. Taxes are unpalatable, so inflation is the most likely course of action.
The trigger to the crisis was the government's policies to push for artificially low rates and high house ownership. That the crisis is first rolling out in the banking sector is logical. After all, it is the most regulated portion of the money industry (the crisis didn't start in the unregulated edge funds). As for the business of money, well, money is the only item produced in the US under federal government monopoly. The crisis started in the most regulated branch of the most regulated industry. Let's stop this fantasy of blaming the crisis on deregulation. Regulation was the cause.
(One wonders whether congress didn't think of emergency deregulation - drop minimum wages, fuel efficiency requirements, etc - I guess it's not as fun as being profligate with our money.)
With regard to the auto industry, many car jobs are going to disappear, not because congress is waiting to act, but because those jobs shouldn't have existed in the first place. The demand for cars was artificially doped by (government regulated) low interest rates and (government created) bubble prices in real estate. This is finished. Nothing can bring that back.
As a side note, two things on "rescuing the auto industry". First, if 1, 2, or 3 of the Big Threes go under, that doesn't mean that the US auto industry will disappear. The valuable assets (brands with a good image, modern, low cost factories, best dealerships) will be bought and put to work. The production of (many, not all) American brands will continue. Second, to let some carmakers go under is the best way to make sure the management is changed. If congress goes around putting limits on pay and bonuses, all they'll get are mediocre performers.
People want to blame Management for producing the wrong cars (SUVs) but those were vehicles which were making money and keeping them profitable through the 90s (people liked them). The only way to go back to the way it was would be to keep gas prices low but the current prices won't last unless the USA opens more areas for exploration and production of oil and gas.
An you people who think that the government could run the company better need to remember that government rarely runs anything better than private industry. Just look at the Post Office.
Would an employee owned GM fire enough "employee-owners" and lower labor costs by cutting "employee-owners" wages and benefits to bring them in line with what other automakers pay? Would the Union simply act as proxy for the employees to run the company? Would GM lay off "employee-owners" in favor of more automation?
For myself I guess I expect the tax payers will lose no matter what action is taken, in the long run. This kind of maneuver will at least postpone the mass layoffs and cascading impacts on the economy while an employee-owned company might come up with a miracle. My druthers would be for the government to sign contracts for the car companies to convert to producing train rolling stock and get our rail system back in shape so we wouldn't need so many cars, but that is another story.
I think Obama is already accelerating the response to the economic crisis by putting together his economic team now. That way they'll be ready to begin working quickly as the new administration is inaugurated.
Obama's economic team is also working closely with the current administration, although both sides are being pretty opaque about how closely.
In any case, as Obama is announcing some of the economic team, the stock market seems to be rallying. Though it's generally not fair to attribute market performance to specific current events on such a day-to-day schedule.
Boomers Reaping What Was Sown
Boomers Reaping What Was Sown
For a generation the core issues that have driven politics of our nation revolved around Taxes and Human services; usually welfare, health and labor issues. Politicians would run on a platform of lower taxes and an expansion or reduction in human service; depending on the party affiliation. In short politicians were taking the temperature of the electorate and pandering to the issues of the moment.
What is plainly obvious is that “We the People” needed our representatives to be educated stewards of our future. Not because it was politically popular but because sometimes the answer to the popular demands must be NO. No to popular tax-cut policies; because a growing and aging country has fiscal and infrastructure demands that can’t always be predicted into the future, the rainy day maxim. Or, no to popular human services; because they may have the potential to bankrupt the system in the future as there isn’t enough money to pay for them…due to tax policies or – take your pick of national tragedies, natural or man made.
I am a 38 entrepreneur that is struggling to keep my business alive. I consider myself a very solid political centrist (common cense politics). I am also straining to make cense of all the political, media, and public hyperboly and hypocrisy. What I have come to believe is that my parent’s generation (the boomers) is completely to blame for everything that is currently taking place in our country.
Because of a selfish demand for personal interest at the expense of others, many conflicting policies were perpetuated for decades. And this was only made possible by uneducated, partisan political candidates elected by an equally uneducated and partisan electorate. I’m not insinuating that voters are stupid but rather most are superficially educated to the issues they are voting for or against without knowing the true costs to their vote. Therefore the political process for near 40 years has been like the blind leading the blind.
It is this historic view that allows me to believe that if Social Security and Medicare were to collapse that it wouldn’t necessarily be a bad thing. I certainly don’t want to continue to pay for the ignorant policies of the past, which I had little or no voice to effect.
The Great Depression was a wake up call for the generation of my great grandparents which ushered in a new era of personal, economic, and government accountability. Perhaps this new financial crisis is a wake up to the baby boomers who drove this country so far off course.
The bailouts are saddling us with a catastrophic debt making it difficult to imagine a future of prosperity for my entire generation. It may just be necessary to triage our social structure. Similar to how surgeons amputate a dead limb to save the patient, perhaps its time to cut the bloated and unfunded social policies the boomers refused to fund with their own taxes. I know this concept appears heartless but no more then the heartless consideration boomers have shown for future generations.
I'm on the old side of GenX, but I clearly recall that it was the 'trickle-down fantasy' giveaway to the rich, followed by vastly bloated military spending - brought to us by that pre-boomer Ronald Reagan - that made our national debt into an issue of concern.
This current %$*# now in the White House, brought that debt to astronomical new heights even before this current crisis.
In between those two jokers, it was our boomer President Bubba that balanced the federal budget!
In their cynical attempt to keep government from doing sensible things (like providing health insurance), Republicans have persistently driven us toward bankruptcy.
Read your history and give your boomer parents a break!
A capitalist world economy runs on the productive power of capital and labor, as well as other resources like land and raw materials. If labor wants a bigger share then it must become more productive and/or participate in ownership of the residual risk. Trying to get a bigger piece of the pie at the expense of capital investment will get you to Detroit faster than a speeding bullet. This has been the UAW's tactic, in collusion with mgmt., as they both hoped to stick it to consumers and taxpayers.
Thuthdig's time line minimizes the prescriptive role of federal policy in the proliferation of sub-prime mortgages and, worse, deliberately overlooks the participation of "Fannie" and "Freddie," since to call attention to those influential factors would disappate the impact of blaming "deregulation." The reality is that we had plenty of regulation - it was just that regulatory powers were used to achieve political purposes. No surprises there.
Thanks for your reply. It isn't that I am against rewarding risk, but that I think the rewards accrue unfairly. Workers take a risk when they entrust their labour to the owners of capital.
Also, capital is more mobile not as a natural fact, but because laws and regulations or the lack thereof in some places allow for it. So we are talking about regulating the flows so they don't wash away social institutions and landscapes and don't provide large enterprises with unfair advantages.
You say that labour must become more productive if it wants a bigger share, but please can you explain why capitalists or the corporate soldiers of capital keep getting a bigger share when they are not more productive, either for their business in the long term or for society. And by more productive, don't you mean they must increase output for the same labour cost or replace themeslves with machines? How does this make sense for workers or for the good of society?
Instead of going for a spiral down strategy of allowing capital to seek out the cheapest labour in the worst working conditions, thus forcing companies at home to pay workers less, shouldn't we not be working for a spiral up situation?
I don't disagree with your criticisms - we tolerate far too much "heads we win, tails you lose" deals with our elites--in business, politics, and labor. I don't think the prescription for this is more power sharing at the peak level by these elites. I prefer a grassroots demand for legal protections for shareholders, worker/shareholders, and other stakeholders.
This is often treated as an industrial organizational problem, but it's really a political and legal one. As an individual I want to combine my skilled labor with capital to maximize my own productivity - and then, if successful, I want to receive the just reward for the risks assumed. I agree we've established rules that favor vested interests (in both capital and labor) and we should re-examine these to insure free competition. But I don't want my ownership of a piece of America to go through Washington or the UAW or my corporate boss or Wall St..
I'd have to say labor vs. capital mobility is more a function of the inherent factor though - capital is fungible and unencumbered by physical distance, labor is much less so. I.e., labor requires an entire infrastructure of housing, food, legal rights, transport, time, etc. to move across borders, capital just a good line of communications and a functioning currency exchange market for instant transfers.
To relate this to our LR&C crowd, they are still squabbling inside the ideological box instead of thinking outside it. Bob Scheer is quite erudite as an historian and social analyst, but the world he envisions will never obtain in the real world. It's time to change the paradigm. Maybe 12 years calls for a turnover of thinkers? Sorry, everybody has to retire at some point...