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Week of March 29, 2009 - April 4, 2009

Life Behind the Wall: Stuck in Reverse


I've been wanting to visit Cuba ever since I read Alejo Carpentier, and seeing Before Night Falls and some early Cuban films renewed it. But we've got a wall to maintain. I can visit Russia, play cards in Chechnya, lunch with Gaddhafi, observe Chinese prison workers make electronics, buy Chinese knick-knacks from Tibetans in rags inside Lhasa's Potala Palace, dine with some of Pol Pot's finest henchmen, chew ghat with Taliban terrorists in Kandahar, lash immoral women in the Swat valley, buy leftover AIG stock from Hank Greenberg in Manhattan, talk education with William Ayers, meet up for drinks with Scooter Libby and Alberto Gonzales at The Palm, and waterboard inmates in Guantanamo, but I can't visit Havana. At least not legally. But I did get to see signs in Yucatan and Jamaica denoting cheap air and boat trips. The next best thing to being there, outside of Miami.

Cubans who reach our shores get automatic US citizenship, and now they can send back as much money as they have and visit as often as they want. But not me. I'm subject to the US embargo against Cuba. Of course this embargo is brutally effective. Cuba is barred from trading with anyone except Canadians, Brits, the French, Somalians, Russians, Chinese, Iraqis, Polish, Spanish, Japanese, Thailand, and a few other select 150 countries. It's so effective that the US is only the 7th largest exporter to Cuba with 4.3% of its imports.

And I'm glad to see Obama reaching across the aisle to embrace the enduring legacy of our great patriots and modern political philosophers, Jesse Helms and Dan Burton (whose bigger fame of shooting pumpkins labelled "Vince Foster" has started to fade). Because it would be a shame to prop up the Castro regime with my money when I could be supporting Chinese gulags or helping Burmese drug lords or promoting female circumcision and macheteing arms off kids in Africa . Democracy is very fragile, and we have to put a line down somewhere. Which just happened to be Cuba, don't ask why.

And speaking of arms control, while Cuba may seem a bit retro, retro's in, so much so that in the middle of this time of terror and crashing financial systems, any day now I expect to hear a big policy speech on nuclear arms control and SALT WARS VI, Return of the Jaded. Perhaps we can look in Putin's eyes and find he does have a soul while he turns off the gas spigots to Europe. And that soul spells the most American of sentiments, $$$$ Ka-Ching. Next stop, Mars?


Let's All Sing to the Death of a Clown: The Decline of Private Unions



From a high of around 18 million in 1975, private sector union membership has declined to around 8 million today. Presuming the UAW will effectively be wiped out by the latest dictums on Detroit, that will knock out another 465,000 or 6% of the total. (Sure, Ford's UAW membership could still exist, but that will be a rather toothless tiger).

It's been a steady fall for the UAW since its peak in 1979 at 1.5 million. Reagan ushered in the anti-union spirit, especially with his mass firing of flight controllers in 1983. But the steady decline of manufacturing and the non-unionization of computer jobs has turned the US into a largely non-unionized workspace today. And despite the IT field being largely non-unionized, that didn't save it from being scapegoated as "too high salaries" in the early 2000's, with more calls for more H-1B's from India. Demonization of unions has become standard fare for describing our ills even as unions have largely turned ineffectual.

And conservatives hate unions as much as they hate the National Endowment of the Arts. The destruction of the UAW is not the last stone. Unions in education are consistently blamed for our educational ills (with school vouchers being one way to suck air from that system, No Child Left Behind being a way to kill off local and thus union control). Health Care unions will certainly be a target of any attempts at national health care, under the sad refrain that insurance companies just can't make a profit as long as health care workers insist on making decent salaries. Pilots have sucked up cuts in recent years to keep airlines afloat. It's just not an easy time to negotiate contracts that benefit workers, and with the trillions that have spearheaded efforts to ensure "stockholder value" (read: "short-term profits"), you can bet that workers don't have money to fight back both against internal and external efforts.

As for public unions, now up to 8 million, just remember: 1983. And 2001. We won't let you shut down government. That would abet the terrorists. It's a time of war, you know.

Fortunately the trend is now for workers to have 401(K) and 403(B) retirement accounts to move around. Unfortunately, those accounts are getting battered between stock and real-estate crashes as well as normal pension raiding. Fortunately workers now have COBRA to ensure they can pay $1500/month to keep medical benefits in times of inevitable layoffs, which if they don't quite manage lead them to have half their care labeled "pre-existing conditions" if they happen to find replacement work. Fortunately we have a court system that's sympathetic to workers' complaints in wrongful firings and treatment. Fortunately unions are no longer needed because the needs of the average citizen are universally recognized and protected by both government and corporations themselves. 

Laa-la-la-laa-laa, laa-la-la-laa, let's all sing to the death of a clown...

[PS - on my previous posts I made the mistake of saying auto companies got roughly 0.2% or 0.5% of the bailout money, depending on what figures you use. Sorry, they got repayable loans instead, along with severe conditions on reorganization, layoffs and forced wage and benefits cuts to union. It was AIG that got the no-conditions free money with big bonuses to upper staff. Mea culpa.]

[PPS - for the inevitable testimonials, the best cars I owned were an Olds 98, a Ford Maverick (bought for $100 and driven across the country several times), a Ford Econoline van for $400 that spewed smoke and had loose steering but was invaluable for a poor musician, and a Renault van that drove nicely. Had a Subaru that absolutely sucked, a Dodge van that was pretty awful, a Toyota that isn't quite all there. I don't go to consumer reports for any of this stuff, just plop my nickel down, takes my chances.]




Panic in Detroit


[Pieced together from my comments on the previous piece.]

Obama committed the tax funds to Detroit, or Congress/Bush did back in 2008? The auto makers asked for $34 billion in December. Instead they were given $13 billion with another $4 billion to come in February. So much for committing lots of money to Detroit. AIG got $85 billion, then up to $150 billion, and now up to $170 billion total. I'm happy Obama is the sole arbiter of which bailouts are systemic and which are sectorial risks, which indigent companies get to come back for more and which are stiffed, and now gets to be the decider on corporate management staffing. I'm sure he learned this teaching constitutional law.

I find it ironic that the folks in Michigan didn't get to vote in the Democratic primaries, something that quite a few are regretting today - no representation for the 8th most populous state, and it also means that Obama went into the presidency without having to make any appearance before or promises to that state. Since labor/UAW is taken as de facto Democratic bloc voters, all leverage was gone. Elections have consequences, and lack-of-elections have consequences too.

If you want to discuss systemic risks, discuss our over-reliance on oil, our inability to change CAFE standards, our continual lack of addressing the leftover burden of 1960s benefits in a 2008/2009 competitive field (i.e. all legacy companies are screwed), our inability to confront health care which unduly affects manpower-intensive industries, our subsidies/giveaways for defense, agriculture, oil, big pharma, finance & housing, but our insistence that Detroit has to play by market rules. (Laughably we do something similar with Amtrak, while subsidizing the competition - airports, highways, guaranteeing the low price of oil, etc.)

Venomous? No, I'm just being normally cuttingly ironic. The long knives are still sheathed. Writings on Bush & Cheney and cronies were 100x more pointed. But thanks for being sensitive - we need your type around.


From www.openleft.com -

"[White House officials] have more confidence in the leadership on the banking side - that there are people in place who understand what went wrong and the steps necessary to deal with this disaster."

....

Sirota and others point out that much of this is tied up in the personality of Steve Rattner, the hedge fund manager that is overseeing the auto company bailout/restructuring. I'm sure running companies into the ground for profit on Wall Street trained Mr. Rattner in how to compete with the Japanese in making next generation's cars (especially in fending off non-union Japanese plants in southern states that provide scrumptious tax benefits).

http://online.wsj.com/article/SB123845917380171771.html

Via OpenLeft: "DETROIT -- President Barack Obama's recovery plan for General Motors Corp. and Chrysler LLC appears to take aim at union retirees, a usually reliable Democratic constituency. After studying the plight of the companies, the president's auto task force concluded GM and Chrysler's survival is dependent on greater concessions from the United Auto Workers union."

Yes, the sole determinant of success in the auto industry is ending employee benefits - soon new car models will rain from the sky, at least for GM.

Just to get us back in perspective, we're talking $8 trillion in bailout, but only $17.4 billion for Detroit (half of what they asked), which comes to about 0.22%. Yes, zero-point-two-two percent, 1/500th of our bailout. About 12x AIG bonuses. And I'm glad some hedge fund schmuck knows what Detroit needs to do - screw the retired line workers. Guess that's why he pulls down the big bucks.
http://www.politico.com/news/stories/1208/16620.html

And just remember, those left wing progressives complain too much.

DC to Detroit: Drop Dead!!!


Or better, "You're morons, we ain't".

In what seems like an amazing amount of chutzpah, a man who's never worked an industrial job or in an industrial field, whose executive experience is say 2 months worth, and who so far has looked pretty dismal in reining in those financial corporations aside from showering them with trillions - well, he just bought himself some auto companies. Up and fired the head of GM, how's dem apples? Renegotiating (i.e. demanding huge cuts for) employee benefits and a range of other issues.

I bet a few people around Detroit are wishing they held a presidential primary last year.

But looks like besides owning banks and mortgage companies, we just got ourselves in the auto business. If we want to nationalize a few oil companies while we're at it, I know some guys who can help.

Funny, it almost feels like Donald Trump became President. "You're fired. Giddoutahere." Guess it's all in the attitude.

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