Bailout Talks Collapse. Will Carmakers be Next?

To almost no one's surprise, the Senate couldn't agree on a compromise plan to provide $14 billion dollars in loans to GM and Chrysler. The Upper House voted 52-35 to bring the measure for a vote, but that was 8 short of the 60 needed to move the bill forward. As was the case in the financial bailout, it was Republicans turning on their own president that doomed this bill. Bush managed a compromise with Senate Democrats, but in the end, the GOP wouldn't go for it.

At issue was the demand by Republicans that the United Auto Workers agree to what's called "parity pay" with non union plants operated by foreign carmakers. The UAW agree, but by no means should the blame for not getting this done be put on them. From the very beginning there were Republican senators who balked at help Detroit because they had foreign car plants in their states. Don't think for a moment those carmakers didn't have lobbyists on Capitol Hill fighting for their interests.

Now the question is, how bad will the fallout from not getting this done be? Even though it's still possible negotiations could get jump started somehow, it's not likely. GM in particular says it doesn't have the cash to operate much longer. Even if you oppose the bailout on principle, the collapse of one or two of the Big Three can't be an appetizing prospect.

It's almost as if members of the current lame duck Congress want to leave as large a mess as possible for the next one to clean up. Of course, the new president will also have that task. On top of all the other bad economic news, bankruptcy for GM and Chrysler could well turn a recession into something no one wants to contemplate.

Could we be using the "D" word sometime in 2009? You tell me.

Still at Work?

With all the unemployed Americans facing tough times, it's just galling to know that Illinois Governor Rod Blagojevich went back to work yesterday, and shows no sign that he's thinking of quitting. As the details of the case against him come into sharper focus, it's also obvious why he's staying. It's his only leverage against what looks now like a long stretch in prison stripes. Again, the man is innocent until proven guilty, but it's his own words that are damning him.

There is more information about the depth and breadth of both Blagojevich's greed, and the efforts to take him down. We now know that Rep. Jesse Jackson Jr. is the potential senate appointee identified as "Candidate #5" in the criminal complaint. That would be the one whose "associate" allegedly offered a half million dollars for the appointment.

The congressman held a press conference to angrily denounce Blagojevich, and to deny he ever authorized anyone to make that kind of offer on his behalf. If he's lying, he ought to remember that the prosecutor in this case if one Patrick Fitzgerald, who nailed ex-Cheney chief of staff Scooter Libby for doing the same thing.

Also exposed yesterday was the identity of "Individual A", a central figure in the complaint. He's lobbyist John Wyma, a close adviser to Blagojevich. He's also apparently the guy who ratted him out, not about the senate seat, but a different shakedown scheme the governor had concocted. It seems there was no government allocation too small, no appointment too big, no matter too trivial for Blagojevich not to attempt to profit from.

And in the end, that's why he was still in his office yesterday. Despite calls to quit from just about every politician in the state of Illinois and President-Elect Obama, Rod Blagojevich remains defiant, and by all accounts unrepentant. Short of calling a special election the Democrats might lose, there seems to be no way to force him to give up the only bargaining chip he still has....that senate appointment.

However, he won't hold that for long. The Illinois political apparatus that Rod Blagojevich was elected to reform will find a way to snatch the appointment right out from under his nose. Either that, or he's actually going to try and bargain with the feds for a lighter sentence in exchange for a quick exit.

If he thinks he can pull that off, he doesn't know Patrick Fitzgerald. What do you think? How long does Rod Blagojevich last?

Arrogance, Idiocy, or Both?

Now that Illinois Governor Rod Blagojevich has made himself the poster boy for political greed, avarice, and just plain stupidity, it may be time to sit back and contemplate just what kind of people we elect to public office in this country. To do that properly, we have to take a look at just what this "reform" governor from Illinois has allegedly done. For sheer gall, it makes NFL miscreants like Plaxico Burress and Pac Man Jones look like mere amateurs.

Perhaps we should preface all this by saying Rod Blagojevich is innocent until proven guilty, as are all Americans accused of crimes. Yet there are some things we do know, based on federal wiretaps of his phone. To take the sports analogy one step further, the governor himself likened the selection of someone to take Barack Obama's place in the US Senate to a sports agent shopping a free agent at the highest price possible. Such was his arrogance, prosecutors say, that he even thought about naming himself to Obama's old job.

Then there are the profanity laden rants that have been released to the public. No need to detail them here, but suffice to say this guy could give the late John Gotti a run for his money for most expletives caught on a wiretap. Even his wife Patrti got into the act, telling her husband to go after the now bankrupt Tribune Company, whose newspaper the Chicago Tribune, has suggested he be impeached. They've no doubt been proven right about that one.

As Illinois politicians try to figure out how to snatch the power to name Obama's successor from the unrepentant Blagojevich, (his lawyer says he won't quit, and as long as he's in office he gets to choose) the question on a lot of minds in Washington is whether or not any of this mess will blow back on the president-elect. The immediate answer might be no, since Blagojevich was taped fuming that the Obama people weren't about any quid pro quo when it came to naming the new senator. Yet Republicans love a scandal that doesn't involve one of their number, so expect them to make the attempt to link Obama to all this.

Maybe the irony in all this aside from providing much fodder for late night tv shows, is that Rod Blagojevich's lawyer says all these charges will come to nothing because it just politics. If he's right, we're all in deep, deep trouble.

What do you think? Will Blagojevich fold and leave the Illinois Governor's office, or will he stick it out and actually try to name Barack Obama's successor? You tell me.

Old Story, New Twist

We've been seeing and hearing about shuttered factories, businesses, and laid off workers with frightening frequency lately. And so the closing of Republic Doors and Windows on Chicago's North Side might have escaped our attention, except for one thing. Workers there decided to occupy the factory. In doing so, they've become national news, even earning praise from Chicago's favorite son, Barack Obama. Their beef is legitimate, their cause is peaceful. They've met with Illinois Governor Rod Blagojevich, who took action on their concerns.

The 300 workers were due vacation and severance pay, as are many (but not all ) workers who are losing their livelihoods on the cusp of the holiday season. Trouble is, the company shut down abruptly last Friday because Bank of America canceled Republic's line of credit due to a downturn in the firm's business. That would be the same Bank of America that received billions in taxpayer dollars as part of the great financial bailout of 2008.

The best the bank could come up with is they're not responsible for the company's obligations to their workers. Yet they are responsible to the American people. What exactly did they think the $25 billion dollars they got in the bailout was for, anyway? In the face of this arrogance, Governor Blagojevich has ordered the state to stop doing business with BoA. Score one small one for the workers.

What the employees of Republic Doors and Windows are experiencing is being felt by businesses, big and small, all over America. This factory occupation could well be a template for other workers who find a bunch of high rolling bankers have their foot on their necks. Imagine a taxpayer revolt against banks that take government money yet refuse to use it to keep otherwise profitable businesses alive.

The Rev. Jesse Jackson understands the stakes here. That's why his Rainbow-PUSH Coalition handed out free turkeys and bags of food to the workers inside Republic Windows and Doors. And the empathy shown by our president-elect can't be underestimated either. It's not often we see people taking direct action to protest their circumstances.

Let's hope it spreads, don't you think?

Liberals Worried about Obama?

The issue has been on the down low, and the concern has been incremental. Does Barack Obama really represent the change he talked about during the campaign? For some liberals/progressives, the answer is at best hazy, and at worst no. The president-elect's cabinet choices, and his switch on reversing tax cuts for people making more than $250,000 a year are giving some folks pause. For his part, Obama and some of his supporters say it's way too early to judge. Is it?

His backers in the labor movement point out that when he introduced his economic team, he didn't appoint a labor secretary. Some think that omission signals a lesser role for a constituency that backed him with votes and money. Then there's the appointment of Hillary Clinton as secretary of state, and the retention of Robert Gates at the Pentagon. The grumbling here is that Obama could be waffling on his pledge to start ending the Iraq war on his first day in office.

Of course, he hasn't had a first day in office yet. And no matter what his economic and national security teams look like, it will be Barack Obama setting policy. Still, the man who promised change as a candidate doesn't seem so committed to change as president. Then there's the question of what change was promised, and what was expected. If the change is from the Bush years, a case can be made he's setting about that, even with the retention of Gates. After all, does anyone think a massive economic stimulus package would be on the current president's agenda?

However, if people interpret Obama's promise of change to be something more fundamental, it should come as no surprise that some people find him lacking. Right now, every appointment and utterance from this president-elect is going to be heavily scrutinized. The nation's economy has fallen down a deep hole, and in the end, that's the change people will most want to see. Last month, the number of people losing their jobs jumped to 533,000. Change may best be measured not in cabinet appointments, but in putting people back to work.

What do you think?

Keep the Tax, Dump the Tolls?

The transit commission empaneled by Gov. David Paterson here in New York has come back with a report that, while promising bus and subway riders a break, is being met with skepticism by that same public. The plan would drastically cut the amount of a fare increase, from 23% to 8%. Plugging the Metropolitan Transportation Authority's yawning budget gap would fall to two major revenue generators. One is a payroll tax on employers in the region. The other is tolls on on East and Harlem River bridges that are now free to cross.

You can imagine the reception the latter got. Lawmakers from Brooklyn, Queens, and the Bronx screamed bloody murder. This they've done every time the notion of tolls on those bridges has come up. That's precisely why they' re still free. Yet we live in different times. Although a New York Times analysis says the payroll tax alone would plug the budget gap, the tolls would serve another useful purpose. It's proposed to use that money to fund an expansion of existing bus service, from the creation of new depots to the creation of dedicated bus corridors that would be separate from other traffic.

This proposal is intriguing, and worth a look of its own. Many cities already have these corridors, and they reportedly make bus travel a faster and more efficient experience. As it stands now, vehicular traffic over the East River has no rhyme or reason. The RFK Triboro Bridge, Battery and Midtown Tunnels already charge to cross into Manhattan. The 59th St., Williamsburg, Manhattan and Brooklyn Bridges don't. There is, of course, no feasible way to install toll booths at these crossings without creating perpetual gridlock. Technology being what it is, however, that problem can likely be overcome.

In the interest of fairness and the future of the city's transit system, this plan should be implemented, but with modifications. All bridges and tunnels over the East River should cost no more to cross than it does to come into Manhattan from New Jersey. That's not currently the case. This means they should all cost no more than $8 dollars round trip. The Harlem River crossings should be nominal, since the bridge spans are much shorter, no more than $5 dollars round trip.

Yes, it's going to hurt, but a 23% increase in the subway and bus fare would hurt more. What do you think?

Keep the Tax, Dump the Tolls

Hardball in the Senate? Nah!!!

We saw an item recently about Hardball's Chris Matthews thinking about running in 2010 for the Pennsylvania seat in the US Senate now held by Arlen Specter. Didn't think much about it at the time. Now it seems he's serious. He's reportedly shopping for a house in the state where he was born. It's also true that he's harbored a boyhood dream to be a senator. I've always wanted to be a subway motorman. That doesn't mean I'm looking to take the test.

Chris Matthews wouldn't be the first tv personality to run for political office. Gee, there's the late Sonny Bono, Fred Grandy from the Love Boat, and Jesse "The Body" Ventura. And they all won! But seriously, Chris Matthews would have a hard road to Capitol Hill. For one, he's been hosting a political talk show, which means he's got friends for sure, but also enemies in Washington. Also, despite having been born in Pennsylvania, he's most closely associated with DC.

Then there's his ill advised slam of Hillary Clinton during the presidential primary. You may remember he said she got where she was because "her husband messed around". Chris Matthews may find out that the Clintons have a long reach, and long memories. Then there are those who view the noise about a Matthews senate run as merely a negotiating ploy to get more money from NBC when his contract expires next June. Don't laugh. It's been done before.

Matthews doesn't face an open road even to the Democratic nomination for the job he covets. Should he get past potential challengers in his own party, he faces a venerable opponent in Arlen Specter. True, the incumbent will be 80 years old in 2010, but Frank Lautenberg just got re-elected in New Jersey, and he's 84. Would Chris Matthews dare bring up the issue of age?

The MSNBC host has always been an acquired taste, but one who has a following despite being pilloried on occasion by the right. He should stay where he is, and do what he does best. Boyhood dreams don't always work out.

What do you think? Should Chris Matthews run for the Senate?

Mo Money Mo Money Mo Money!

The Big Three came back to Washington Tuesday, and this time they seem to have gotten the message about those corporate jets. Now the only question is whether Congress will buy their plea for a bailout before one or more of them goes broke. Instead of the $25 billion they were asking for just two weeks ago, GM, Ford, and Chrysler want $34 billion. But hey, what's $9 billion among friends?

Detroit came to the table this time with plans. GM's seems to be the most detailed, probably because they're in the most trouble. They say they'll cut as many as 30,000 jobs by 2012, close 11 factories, trim about 1700 odd dealers, and sell off Hummer and Saab, while shrinking Pontiac and getting rid of it;'s its Saturn brand completely. And like the other two CEOS, GM's would take a $1 dollar annual salary. Chrysler is in similar straits but is asking for $7 billion rather than the $18 billion sought by GM.

Ford says it can be profitable by 2011, and only needs $9 billion to use if necessary. Ford is in an interesting position here. While all three automakers say they'll focus on making more fuel efficient cars to sell here in the US, Ford already sells a number of such vehicles in other parts of the world. In fact, two Ford cars get better than 40 miles per gallon, with one getting an astonishing 63.6! Sadly, both are diesels, and neither is available here in the US.

Yet as we ponder whether the Big Three's commitment to more fuel efficient cars and leaner operations is real, consider this. The average fuel consumption figure for US cars, minivans, and SUVs stands at 22.6. In Europe the figure is 40.3, and in Japan it's 40.6. Maybe Detroit ought to come up with plans to raise the US number. For years, they've been resisting such calls, arguing the cost is prohibitive. Maybe the need to borrow $4 billion dollars from US taxpayers to survive the rest of the year ought to change that attitude.

One attitude has changed, for sure. The Big Three CEOs will all be driving hybrid vehicles fro Detroit to DC later this week. No more corporate jets, not after people noticed.

So, the question is, did the automakers make their case? You tell me.

Burress Shoots Himself- Career in Critical?

By now most people know that New York Giants star wide receiver Plaxico Burress shot himself with a gun he was carrying in a New York nightclub in the wee hours of last Saturday morning. The media frenzy that followed as entirely predictable. Burress has had trouble follow throughout his pro career, but nothing quite like this. On Monday, he was arraigned on a pair of felony weapons charges that could land him in prison for a mandatory minimum of 3 1/2 years. That would be on each count.

The reaction of the sporting press was outrage, the kind of outrage reserved for athletes they consider pampered who do something inarguably stupid. Sports journalists all too often ignore the presumption of innocence that is the foundation of our country's legal system. In the case of Plaxico Burress, no less a personage than the Mayor of New York, Mike Bloomberg, weighed in. He says Burress should be prosecuted "to the fullest extent of the law". For Bloomberg, that means three and a half years in prison. After all, he was the one who successfully lobbied the state to increase the punishment for illegal weapons possession from a year.

You can argue all day whether Burress deserves jail time or counseling, but a few things need to be established here. Athletes and celebrities often walk around armed, and don't get caught. That's because they fear being robbed, as several have been leaving clubs or even in front of their own homes. Why Burress didn't simply hire a legally armed bodyguard is anybody's guess. It's a delicious irony that Plaxico Burress, a man who makes a really good living catching a football, couldn't manage to hang on to a gun in his own pants.

The central question here, whether you're outraged by what he did or just think he's an idiot (or both) is whether he's offered a plea bargain or if he actually goes to trial. in the case of the latter, a mandatory minimum sentence wouldn't likely be imposed. Perhaps proper punishment for Plaxico Burress is a trip out of town. The New York Giants won this past weekend without him. For all his skills, he is in fact expendable. Voiding his contract for misconduct would cost him the better part of $35 million dollars.

Then let Plaxico Burress go out and make a living like the rest of us.

Will Fine Tuning be Enough?

As President-Elect Obama rolls out his national security team Monday, the Big Three automakers are preparing for their second plea to Congress for money. You may remember their first trip to DC didn't turn out so well. Not only did they come to then nation's capital in private jets, they came without a plan about how they'd spend the money if they got it. The money in this case is $25 billion dollars.

Reports say GM, Ford, and Chrysler all worked feverishly through the weekend to come up with plans to restructure the way they do business. At the top of their list ought to be how to create a quantum leap in fuel efficiency for their vehicles. A recent online article made the point that miles per gallon figures in Europe and Japan far surpass even the best projections of Detroit. What's ironic is several of the cars mentioned in that article are made by Ford yet are unavailable here in the US.

One silver lining in Detroit's cloud is the willingness of he United Auto Workers to offer concessions in an effort to convince the Congress to come up with the money. UAW president Ron Gettelfinger says the union will do its part if they see sacrifices on the part of management. One can hardly see how the bigwigs can say no to that. After all, a cap on executive compensation is something Democratic members of Congress will demand.

The down side is that the carmakers will be coming to Capitol Hill on the same day sales results for last month will come out. They expected to only be marginally better than October, when sales were at a 25 year low. The crucial question is whether the plans, which vary somewhat among the three automakers contain enough detail to sway those members of Congress who thus far have been less than inclined to help. There are still some lawmakers who see Detroit's problems as being of their own making, which, to be blunt, they are.

However, if Ford, Chrysler, and GM come to the table Tuesday with a plan that makes sense, they should get the money they are looking for. What do you think?