Bail Out the Auto Industry? Maybe Not

Wasn't it just 48 hours ago that we heard the lame duck session of Congress would ditch an economic stimulus package in favor of trying to provide $25 billion dollars to help the crippled auto industry? Now there's news the car bailout may not happen. It seems Republicans in the Senate have some problems with helping the so-called Big Three. Far be it from me to agree with them, but GM, Ford, and Chrysler seem to be suffering from the same corporate brain lock we see in the financial sector. They just don't get it.

How else to explain their hesitance, even as they have their hands out, to pledge to produce more fuel efficient vehicles? This resistance gives fuel (no pun intended) to lawmakers who say problems in Detroit began well before the current economic meltdown. Fact is, American carmakers have been fighting off efforts to produce vehicles with better gas mileage for decades. They say they need bailout money not to retool their factories, but to deal with rising labor and pension costs.

As a person who believes in the value of unions and workers, it's hard to sit back and say let the Big Three fend for themselves. That usually means massive layoffs and plant closings. If any of the carmakers goes bankrupt, things will be even worse. On top of that, Republicans in Congress seem willing to gut the fuel efficiency requirements in order to expedite the $25 billion dollar loans currently in the pipeline. Yet there are still fundamental questions that require answers.

Why can't the auto industry commit to making more fuel efficient vehicles? Is there something in their DNA that makes them deaf to what the American people are telling them with their pocketbooks? Do they marvel at the sight of gas guzzling SUVs sitting in car lots, unsold and unwanted? It's like a drowning man refusing a life jacket because he doesn't like the color.

Auto industry executives will be coming, hat in hand, to Capitol Hill next week. That is, if there's a lame duck session of Congress to lobby. If economic stimulus and a car bailout are both off the table, why bother?

AIG-K-E-Y-M-O-U-S-E!!!

Let's pray that American corporate culture isn't embodied by the mammoth insurance firm AIG. This company, the recipient of first $85 and then $40 billion dollars from US taxpayers, seems clueless about the crippling effects of the economic downturn on everyday, hard working citizens. How else to explain AIG's secret gathering for financial planners held at a posh resort near Phoenix last week?

Now, in case you forgot or think we're repeating ourselves, this isn't the well publicized week long party AIG executives treated themselves to in southern California last month. It seems the company's one concession to the flack they got for that one was to tell the hotel in Phoenix to keep this one on the down low. A hotel worker told a reporter they weren't even allowed to use the word AIG. He may have meant acronym, but you get the point.

When asked about the secrecy, AIG CEO Edward Liddy came up with the preposterous notion that this was an example of cost cutting. How much is hotel signage going for these days? Then, the company went into full damage control mode. What else are you supposed to do when you're begging for all this money from Uncle Sam? AIG says reports about the Phoenix conference are "misleading". And imposing a code of secrecy about it wasn't? A statement from Liddy went on to say the cost to his company was minimal, paid for by in part by the financial planners who attended, and that these seminars were crucial to helping to repay the taxpayer.

So, they couldn't have held the conference in their own offices, either here in New York, or in someplace a little cheaper than the Pointe Hilton Squaw Peak Resort? No matter how Edward Liddy slices it, AIG is now the poster child for corporate culture run amok. Does he realize there are Americans who can't even plan to spend a paltry amount of money on gifts for loved ones over this holiday season? Would he like to tell them how important it is to fly first class, get driven around in limousines, and eat in fancy restaurants?

Think these are the only executives who haven't gotten the message the country is in trouble? You tell me.

Windfall for Lobbyists/Shaft for Us?

Now we know why there seems to be so little information available on just how the $700 billion dollar bailout of the financial industry will be doled out. The DC lobbyists, those folks everybody loves to hate, are swarming over the initial outlay like sharks after blood. That's right. The banks, savings and loans, and insurance companies that look to benefit from the bailout package have procured the services of what the New York Times calls "an army of hired guns" to make sure they get their fair share.

We also know this. All but $60 billion of the original $350 billion freed up by Congress has already been spoken for. The Treasury Department, the target of the lobbying zeal, has already had to pump an additional $40 billion dollars into AIG. Now they're hearing from, among others, boat manufacturers, Latino plumbing and home heating specialists, and even car dealers. Everyone, it seems, has their hand out.

Everyone, that is, except hard working Americans. Sure, President-Elect Obama has promised tax relief for the middle class. And Fannie Mae and Freddie Mac are promising new, better deals for struggling mortgage holders. Yet it seems for many people, the government gives with one hand, and takes away with the other. Here in New York, the people that run the transit system are talking about closing a yawning, $1.2 billion dollar gap by raising the subway and bus fare by as much as a dollar a ride. That would be coupled with service cuts, by the way. City and state governments across the country are making hard decisions about education, health care, police and fire protection. The list goes on and on.

Sure, the financial system needs help. So does the automobile industry. But when all is said and done, how much will the shills, the lobbyists make? Isn't the feeding frenzy that has followed the bailout just business as usual? Will anything ever change?
You tell me, because to me it sounds like more of the same.

Should Joe Go?

So it seems one of the thorniest problems the incoming Obama Administration must face isn't whether to bail out the auto industry, or even how to distribute the $700 billion dollars that's going to the financial sector. It's what to do about Joe Lieberman, the so-called independent senator from Connecticut. Lieberman, aas we all know, backed John McCain in the presidential race. Not only that, he spoke at the Republican National Convention! Remember, this is the guy who was Al Gore's running mate just eight years ago.

Here's the crux of the problem. Since winning re-election as an independent in '06, Lieberman has caucused with the Democrats. That means he's risen to become chair of the Homeland Security Committee. There are those who want to see him stripped of that post for his extraordinary lack of loyalty. In fact, some progressive Democrats want him run out of the caucus. They aren't worried about needing Lieberman's vote to move legislation to the floor.

Lieberman, for his part, is playing cagey. He's publicly toyed with the idea of caucusing with the GOP, saying in effect if he's stripped of his committee chair that's just what he'll do. Interestingly, there's a cadre of prominent Democrats who want to keep Lieberman in the fold. They include former president Clinton, and, get this, president-elect Obama. Neither has much to say about the turncoat's staying on as Homeland Security Committee chair.

To allow Joe Lieberman to dictate the terms of remaining with Democrats in the Senate is an affront. Had he remained neutral in the presidential race he might have had a case. He didn't. He became John McCain's moderate shill, perhaps on promise of a juicy cabinet post had McCain won. Lieberman has been holding a grudge against a number of Democrats since they abandoned him when he lost his state's primary two years ago. So why on earth should he be rewarded for treachery?

One would think it's the Democrats who have the upper hand here. It would seem simple enough to say to Joe Lieberman you can stay with our caucus, but you have to give up your committee chair. If not, see ya!

What do you think? Should the Democrats play hardball with Joe Lieberman?