Romney the Pathetic blasts Obama over recession

By Michael J.W. Stickings

Mitt Romney really is pathetic.

And what's really utterly pathetic is not so much how desperately hard he's trying to be a strident movement conservative, because while he's certainly doing that to some degree he's also playing simultaneously to the somewhat more moderate GOP establishment by presenting himself as what seems to be the lone sober voice in a sea of utter insanity, but how he's trying desperately to join the Republican anti-Obama chorus by lashing out at a president with whom in reality he has often been in agreement.

For example, he said yesterday, clarifying previously ambiguous comments, that Obama has made the economy worse, that "the recession is deeper because of our president." Even then, though, he wasn't clear. Obama has apparently both "made the recession worse" and made the recovery, such as there has been one, "slower and more painful."

In other words, he doesn't know what the hell he's talking about. Or, rather, he presumably does but has gotten himself trapped in his own bullshit spin, not clear about what exactly his talking points are. Are things worse or is the recovery too slow? They can't be both. But Romney, poor pathetic Romney, can't seem to pick his preferred line.

Of course, the recovery has been slow, but how has that been Obama's fault? Obama inherited a terrible economic situation. The recession ended several months after he took office, but he did what he could, early in his presidency, to get the economy moving again. And if there is blame to hand out for the slowness of the recovery, it must be handed to the Republicans who objected to Obama's (and the Democrats') stimulus, or at least to the size of it, and prevented the government from injecting enough money into the economy to get it going again quickly enough. Romney for his part, and to his credit, supported the stimulus, but Republicans generally were the obstacle.

Obama then pushed for the bank and auto bailouts, which, however unpopular (and imperfect in application), certainly pulled the economy back from the brink. If anything, Obama prevented the situation from getting even worse. There was objection on both sides to the bailouts, but, again, the Republicans were the obstacle to recovery, not the Democrats and certainly not Obama, who worked (and led) within the limits he faced to get something done at a time when something was desperately needed. Who knows what the situation would now be like if Republicans had gotten their way.

Does Romney know this? Probably. He's an economic conservative who generally prefers trickle-down economics, but, if I may be generous, he's not a complete idiot. But that also means he knows he has to play the anti-Obama game to have a chance at the nomination. Sure, he's the frontrunner, but he's hardly a secure one. He still needs to play to the extremist GOP base, to the primary voters and their puppetmasters who want Obama's head on a pike.

That's what he's trying to do, but you can see just how bad he is at it, which suggests both that he's a bad attack dog, or at least that he's bad at faking it, and that he doesn't really believe what he's saying.

Like Jon Huntsman, a far less pathetic figure (actually an admirable conservative, if I may say so), Romney would probably prefer to remain civil. But he knows he can't, not if he wants to win, and so what we're getting from Romney the Pathetic is an act that rings anything but true and sincere.

But hey, at least we're not talking about Romneycare. Right?

On the backs of taxpayers

By Creature

Daniel Indiviglio [via Ezra]:

[The FinReg] Conference reconvened due to the protests from centrists Republicans in the Senate who didn't like the idea of taxing the big banks and hedge funds. Instead, taxpayers will pay for the regulation, since any TARP money unspent was supposed to go towards paying down the deficit.

And, in the NYT today, a little reminder of what our Treasury Secretary was up to at his old job:

The documents also indicate that regulators [Timmy!] ignored recommendations from their own advisers to force the banks to accept losses on their A.I.G. deals and instead paid the banks in full for the contracts. That decision, say critics of the A.I.G. bailout, has cost taxpayers billions of extra dollars in payments to the banks.

The banks escape. The people pay. Same old. Same old.

Easy money

By Carl

This is a kind of strawman argument to make by Obama, but nonetheless it will resonate:

In an interview with CBS's "60 Minutes" programme, he said he did not run for office to be "helping out a bunch of fat cat bankers on Wall Street".
Later on Monday, the president will meet some of the US's top bankers face-to-face.
He is scheduled to hold a meeting with executives from Goldman Sachs, JP Morgan Chase and Citigroup.
He is planning to tell them to step up lending to small businesses and get behind legislation to overhaul Wall Street regulations.

The term "fat-cat bankers" is one of those totems of neurolinguistic programming that I have been urging Democrats to pick up on for quite some time. We are not in a race war in this nation, nor are we truly in a political fight with the right.

We are, however, in a class war, one that pits the monied interests against the hundreds of millions of Americans who not only are not wealthy, but stand absolutely no chance of ever becoming wealthy. ("No chance" includes a rounding error to account for that small percentage, perhaps one-tenth of one percent, who might actually get lucky and hit the lottery or write a novel that takes off).

"Fat Cat Banker" raises the image of Mr. Monopoly, Rich Uncle Pennybags, complete with top hat, morning coat and striped pants, wearing a monocle and smoking a cigar, or the image used in so many mortgage and business lending commercials prior to the banking crisis, with a wood-paneled office, drinking brandy from a snifter which the banker then uses to crush the poor little guy trying to get a loan from Megabucks Bank.

But it's the rest of his remarks that truly intrigued me.

"“They don’t get it,” Mr. Obama said. “They’re still puzzled why is it that people are mad at the banks. Well, let’s see. You guys are drawing down ten million, twenty million dollar bonuses after America went through the worst economic year that it’s gone through in decades, and you guys caused the problem.[...]

Much of it was due to the irresponsibility of large financial institutions on Wall Street that gambled on risky loans and complex financial products seeking short-term profits and big bonuses with little regard for long-term consequences.[...]

What's really frustrating me right now is that you've got these same banks who benefited from taxpayer assistance who are fighting tooth and nail with their lobbyists up on Capitol Hill, fighting against financial regulatory control," he said.

And here's the most effective point he's made while raising the image of the greedy banker: not so much that the banks were greedy for their own sake, but that they owe a debt of gratitude to the small business owners and taxpayers who stood by them when the shit hit the fan.

See, any idiot with a degree in accounting or finance (like me) could have told any banker that the risks they were taking by lending to anyone and everyone who walked up with a hat in hand were enormous and unnecessary. That the bankstahs spent more time listening to the shareholders who threatened mutiny if this quarter's earnings didn't meet or exceed last quarter's earnings and the board of directors who insisted on pay-for-share-performance than they did to the people warning them of the cliff they were about to drive over means they now owe a debt to the people who not only warned them, but who got down under the cliff and caught the bank before it crashed.

Greed is pervasive in the capitalist system. Hell, it IS the capitalist system and used wisely, greed is good. I'm not about to stick my neck out on the chopping block unless there's a better than even chance that I'll end up better, much better, off than when I knelt in front of it.

But here's the thing: that same greed should recognize the people who stood by me, my workers, my investors, my community. That same greed should acknowledge the role of my customers and my vendors. AND that same greed should reward the government that put me in a position to take the chance, by creating a framework that was safe for me to do business in.

And if anyone of these groups, these stakeholders, goes above and beyond the call of duty to assist me when I am in trouble, then greed should absolutely be given to them, not me.

The parallel in my mind is alcoholism. If a man is supporting his family and giving to his community and keeping up with his obligations, then by all means, if he's a drunk then let him drink.

But keep an eye on him, because at some point, the drink, the greed, will overtake him and someone needs to be prepared to step in.

The right wing knuckleheads will tell you that this should be a function of his family (the company), taking care of his alcholo problem (his greed), but they may not notice or worse, may not care. That's when someone else needs to step in and stop him.

(crossposted to Simply Left Behind)

Banks continue to record billions in profits

By Creature

I wouldn't mind the profits so much if the money made was being pumped back into the economy. The point of all the rescuing was to first stabilize the banking system, then to energize the economy, in part, by loaning out the money made.  Instead they hoarded, they padded their balance sheets, and they covered over their toxic losses with new math.

I was naive to think the banks would act in good faith.  I thought it was understood that when the taxpayer covers your ass and saves you from the cliff that maybe the banks would reciprocate.  I was wrong. Business as usual rules the day.  

They only tools the American people have left is reform and regulation.  I hope the Congress and the Obama administration have the stomach for that fight.  As of now, I doubt it very much.

Truth in Comics

By Creature



If it's Sunday, it's Truth in Comics.

Geithner, the Tax Man, and the Treasury

By Michael J.W. Stickings

Oh, how the right is salivating over Treasury nominee Tim Geithner and his tax problems, specifically, his failure to pay almost $43,000 in Social Security and Medicare taxes over several years earlier this decade.

Appearing before the Senate Finance Committee on Tuesday, Geithner explained, according to the Post, that the "mistakes on his tax returns early this decade were unintentional and that he has since paid back the $42,702 he owed, including interest... [H]e mistakenly believed that his employer at the time, the International Monetary Fund, was deducting those taxes from his paycheck." Democratic committee chairman Max Baucus called his mistake "serious," Minority Leader Mitch McConnell is withholding judgement, and two other Republicans, Jim Bunning and Jon Kyl, are temporarily delaying his confirmation, but, of all people, Orrin Hatch, one of the most conservative and most partisan of Republicans, came to his defence: "I still support him. I have no problem. He's a very, very competent guy."

But then there are those who are making much ado, such as the Politico's Roger Simon, a noted conservative, who asks today, "What if I didn't pay taxes?" Which isn't fair, of course, because Geithner still paid most of his taxes, he just neglected to pay certain taxes that he thought were already being deducted." It an incredibly and typically idiotic piece.

Then there's The Wall Street Journal, a right-wing rag (in editorial terms), which facetiously calls for "a Geithner tax amnesty." But Geithner didn't "forget" to pay his taxes, it was just an oversight on his part -- a serious one, to be sure, but it's not like he was engaging in tax fraud or otherwise simply refusing to pay his taxes.

And it isn't just the right. Even The New York Times (which is actually far more rightist than most people realize) editorialized that "the disclosures cannot be dismissed so easily, or papered over," that "Geithner must be questioned forcefully about these matters at the hearing next week, and his explanations must be credible."

As the Times reports elsewhere, though, "several tax experts" say that "it is an easy mistake for an employee of an international organization to make." Even the Politico admits this: "Should the U.S. treasury secretary know how to do his own taxes? Maybe not, say payroll lawyers, accountants and tax professors, who consider Timothy Geithner’s failure to pay four years of Social Security and Medicare payroll taxes to be a fairly common mistake — even for a top economist chosen to run the Treasury Department, including the Internal Revenue Service."

And while media outlets like CNN are similarly making much ado and focusing on all the supposed opposition to Geithner, Republicans, with few exceptions, are pretty much on Geithner's side, dismissing the tax oversight and stressing his abilities and qualifications.

Now, this is not to say that I myself am fully behind Geithner. I have my reservations, but they have nothing to do with his taxes. Rather, they have to do with the fact that he once worked for Henry Kissinger (I'd like to know more about what he did for Kissinger & Associates), that he's another Rubin-Summers (who were both enablers of the banking crisis back when they were at the Treasury in the '90s under Clinton), that he has been very much part of the problem with respect to the financial meltdown, and that he's an enthusiastic cheerleader for the ever-growing financial bailout.

Still, I'm not against him -- I trust Obama on this -- and, despite these concerns, I do not necessarily oppose his confirmation. Indeed, as Robert Kuttner (via Benen) noted last September, Geithner is actually quite progressive with respect to regulatory policy. And Paul Krugman likes him, which is, for me, very much in his favour, even if Frank Rich makes a strong and persuasive case against him for being "no less tardy [than Rubin] in discovering the reckless, wholesale gambling that went on in Wall Street's big casinos, all of which cratered while at least nominally under his regulatory watch."

Regardless, it looks like he'll be confirmed. Thankfully, the stupid matter of his taxes won't be his undoing.

Money, it's a gas: Ben Bernanke and the bottomless bailout

By Michael J.W. Stickings

Well, you knew this was coming. As the Times puts it, "the banks need more taxpayer money," "a lot more money."

Isn't this partly why so many of us were against the bailout, at least in principle, from the start? It wasn't just that it's a bailout of Wall Street instead of Main Street, which is to say, a bailout of the stinking rich, of those who are at the very core of the financial meltdown and who are very much to blame for it, it was that it was never clear, in terms of dollar figures, what it would amount to. The price tag was just a guess tossed out there by the Treasury, so high that it boggled the mind, initially preventing judgement, but so vague in terms of specifics that it, once the mind settled, it was nothing if not concerning.

In other words, the Treasury didn't know how money was needed for the bailout, and so it was, and is, in effect, a bottomless bailout. It was never going to be just $700 billion.

And now the banks, with Fed Chairmain Bernanke at the head, is back at the trough, asking for more.

Will there be no end to it?

I said at the time, back in October, that, whatever my opposition to it in principle, it seemed to me that something had to be done, and soon, if only for the sake of public confidence and market stability -- and that the bailout was at least something.

Still, confidence and stability aside, the bailout is essentially nothing more than a massive transfer payment to Wall Street, a blank cheque for Treasury Secretary Paulson and the Wall Street oligarchs.

"More capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets," said Bernanke.

There will be an end to it, eventually, but the wedge has already been driven in. And if the banks get their way, as I suspect they will, more and more taxpayer money, how much nobody knows, will flow in their direction.

What's at stake

By Mustang Bobby

David Brooks is worried that Barack Obama is overconfident about his financial stimulus package:

This will be the most complex piece of legislation in American history, and as if the policy content wasn’t complicated enough, Obama also promised to pass it via Immaculate Conception — through a new legislative process that will transform politics. The process, he said, will be totally transparent. There will be no earmarks, no special-interest pleading. In a direct rebuttal to Federalist No. 10, he called on lawmakers to put aside their parochial concerns and pass the measure in weeks.

And as if that isn’t enough, he promised next month to make repairing Social Security and Medicare a “central part” of his budget. “I’m not out to increase the size of government long-term,” he told John Harwood of The Times.

This is daring and impressive stuff. Obama’s team has clearly thought through every piece of this plan. There’s no plank that’s obviously wasteful or that reeks of special-interest pleading. The tax cut is big and bipartisan. Obama is properly worried about runaway deficits, but he’s spending money on things one would want to do anyway. This is not an attempt to use the crisis to build a European-style welfare state.

[...]

Maybe Obama can pull this off, but I have my worries. By this time next year, he’ll either be a great president or a broken one.

Mr. Brooks is worried that the Obama stimulus plan is being put together in a hurry. But unlike some people, Mr. Obama's team has been aware of the financial crisis for a while longer than four months, and there is more substance to Mr. Obama's plans than the smoke, mirrors, and balloon animals that the Bush administration cobbled together in their hurried and messy response to the collapse of Wall Street in September; remember Treasury Secretary Paulson's three-page memo granting him absolute power?

If Mr. Obama's campaign for the presidency and his deft handling of the transition so far are any guide, it appears that when it comes to planning ahead, Mr. Obama has got this. His confidence, which seems to be unsettling to Mr. Brooks, is sure enough that he is willing to work with Republicans and recalcitrant Democrats to accomplish his goal without worrying about his ego or his legacy. I know this may come as a shock to Mr. Brooks, but unlike some of his predecessors, including his immediate one, but Mr. Obama isn't in this to establish his legacy. (In the first place, his legacy is already been set by his election.)

Like a lot of conservatives, Mr. Brooks is confusing self-confidence with bravado. I know this might be a new concept to some people, especially those on the right who have this annoying habit of turning everything into a cult of personality, but whether or not Mr. Obama is a great president or a broken one a year from now doesn't really fit into the equation, because if the economy isn't on the road to recovery a year from now, it won't matter: there won't be much of a country left to be president of.

(Cross-posted from Bark Bark Woof Woof.)

A handshake deal is reached around the table

By Carl

Now, I'm against most bailouts, but this industry is in hard times:

WASHINGTON (CNN) — Another major American industry is asking for assistance as the global financial crisis continues: Hustler publisher Larry Flynt and Girls Gone Wild CEO Joe Francis said Wednesday they will request that Congress allocate $5 billion for a bailout of the adult entertainment industry.

“The take here is that everyone and their mother want to be bailed out from the banks to the big three,” said Owen Moogan, spokesman for Larry Flynt. “The porn industry has been hurt by the downturn like everyone else and they are going to ask for the $5 billion. Is it the most serious thing in the world? Is it going to make the lives of Americans better if it happens? It is not for them to determine.”

Francis said in a statement that “the US government should actively support the adult industry's survival and growth, just as it feels the need to support any other industry cherished by the American people."

Look, boob jobs ain't cheap. This is clearly an industry that is desperate for assistance. It needs to be firmed up and a hard injection of capital is probably just what the doctor ordered after his examination.

Sales reports do seem to indicate that things are sagging in porn. Market penetration is way off, and their assets simply aren't what they used to be. Of course, prior years' results could have been artificially inflated, but my suspicion is we're just seeing the tip of the iceberg.

The hole is deep, my friends. I've studied reams of data which suggest that at least half the adult stars blew their chances to sock away a little for retirement and will have to press their noses to the grindstones in order to make ends meat.

In the true spirit of American capitalism, these pioneers of prurience have opened wide and bared their assets for the shot, just the shot, at a peak market.

But as we all know, markets have their ups and downs, and no doubt right now, porn is at its bottom. However, with a brief respite, and this stimulus package, I have no doubt that as interest rises, this market too shall begin to swell and grow.

(Cross-posted to Simply Left Behind.)

Vote for Simply Left Behind in the Weblog Awards.

**********

Needless to say, there's much more on this oh-so-sexy story over at Memeorandum. Check out Think Progress, which notes that Bush's '08 stimulus package stimulated the porn industry. -- MJWS

The culture of victimhood

By Mustang Bobby

One of my favorite episodes from the late and lamented comic strip Calvin and Hobbes shows Calvin, the six-year-old Everyman, exclaiming, "Nothing that happens is my fault! My family is dysfunctional and my parents won't empower me! Consequently, I'm not self-actualized! My behavior is addictive functioning in a disease process of toxic codependency! I need holistic healing and wellness before I'll accept any responsibility for my actions!"

Hobbes replies, "One of us needs to stick his head in a bucket of ice water."

Calvin marches on, proclaiming, "I love the culture of victimhood."

This seems to have been the mantra of the conservative movement and the Republican party in particular in 2008, and it will likely continue on as the Bush administration whimpers to an end. Everything bad that happened on their watch wasn't their fault. No one could have predicted that Osama bin Laden would fly planes into skyscrapers. No one could have predicted that a major hurricane would strike the Gulf Coast and break the levees. No one foresaw that there would be a terrible backlash of terrorism and hatred against Americans unilaterally attacking and invading a sovereign country ruled by a braggart dictator, and that invading said country would need a lot more than just a few thousand troops. No one could have predicted that the housing bubble and the E-Z credit market would burst because of lax regulation and insider connections on Wall Street and bring down major brokerage houses and threaten the existence of the last major manufacturing companies in the United States. And no one could have predicted that putting politics ahead of competency would give us a government of loyalists who couldn't run a business on their own but voted the right way in 2000.

Except, in every case, a lot of people did predict that all of those things would happen, and some of them lost their jobs for having the temerity to point it out.

This is not altogether a surprise from the party that calls on everyone else to show personal responsibility -- wags their finger and shakes their jowls at everyone else for their moral and political failings -- yet populates the prisons with their own senators on the take. It's not that the Democrats or anyone else doesn't have these failings, too, but at least they don't go around raising money on someone else's hypocrisy. And for a party that calls itself the bastions of more freedom and limited government, they certainly seem to have a list of exceptions that include women controlling their uterus, same-sex couples wishing to get married or adopt children, or failing banks that need a hand-out so they can still have their big Christmas party blow-out and year-end bonuses.

And yet when they're held to account for it, they're the victims here. Alberto Gonzales says he is just as much a victim of terrorism as everyone else and honestly can't understand what he did to earn him so much scorn. Vice President Dick Cheney has no idea why his poll numbers are so low, but then, he says he doesn't care about things like that. White House Chief of Staff Josh Bolten and National Security Adviser Stephen Hadley can't understand why America couldn't see what a likable and compassionate person George W. Bush really is.

Since nothing that happens is their fault, it has to be someone else's, right? Blame the media for not seeing the wonderfulness of George W. Bush. Blame them for not seeing the mavericky goodness of John McCain. Blame them for not following up on the truth behind Barack Obama's birth certificate or that the Rev. Jeremiah Wright's outbursts were just a clever cover-up for Mr. Obama's true Muslim beliefs. Blame the media and the moon and the stars for causing the financial markets to melt down just as John McCain was pulling ahead in the polls in September, and blame David Letterman for making him look like a panic-striken ditherer. Blame the voters for being too stupid to see through the charade of celebrity, and that all that "no-drama Obama" was really a clever plot by the hysterical lefty blogosphere to make him appear that he's calm and in control. But he smokes! That's a sure sign he's weak!

The Religious Right deserves their own pew for wailing about being the victims. They spew hatred and bigotry about gays and lesbians, equate same-sex marriage with criminal acts, pour millions of dollars into a campaign of misinformation and demagoguery to revoke a right granted by the Supreme Court of California, and then get all weepy and whiny when -- too late -- the provoked gay community fights back. The intolerant have the chutzpah to claim they're the victims of religious bigotry. My, my.

People who are capable of adult behavior and mature thought processes would take the lessons that were taught them and learn from them. But apparently that's not the way it works for the conservative mind. No, the way to really get back into the good graces of the American people is to proclaim that what we really need is more finger-pointing, more demonizing, more race-baiting -- "Barack the Magic Negro" is just the curtain-raiser. We need more of Sarah Palin, more of Joe the Plumber, more union-busting, more poor people going to the emergency rooms for their health care, and more smiting down of the queers by the hand of God to really teach this country a lesson.

In one respect, I hope they cling to this mantra of victimhood because it really does make it easy to mock them and dismiss them as the infantile alibiers that they have become. As Paul Krugman notes,

Will the Republicans eventually stage a comeback? Yes, of course. But barring some huge missteps by Mr. Obama, that will not happen until they stop whining and look at what really went wrong. And when they do, they will discover that they need to get in touch with the real “real America,” a country that is more diverse, more tolerant, and more demanding of effective government than is dreamt of in their political philosophy.

Maybe what they need is Calvin's holistic healing and self empowerment...but the bucket of ice water solution sounds good, too.

(Cross-posted from Bark Bark Woof Woof.)

Drawing lines

By Creature

The question with bailing out everyone, and their mothers, usually comes down to drawing lines. I understand a frozen financial system harms all (the life-blood argument blah, blah, blah). I understand the importance of keeping Detroit, and its millions of interconnected jobs, alive as well. And, I'm all for a huge stimulus focused on infrastructure, education, and green. But keeping greedy property developers and commercial building owners in the black is a step too far and should be rejected without a second thought. As Calculated Risk points out: "How many jobs will be lost if the ownership of an office building or mall changes? Very few." If at all. Enough is enough.

(Cross-posted at State of the Day.)

Bush, Big 3: Nope, you can't pin this on the 'little guy'

By LindaBeth

Friday Bush announced that some of the TARP funds intended for the financial industry will be used as a temporary lifeline to the Big 3 auto makers, after the Senate failed to pass the auto bailout bill last week.

From The New York Times:

The plan pumps $13.4 billion by mid-January into the companies from the fund that Congress authorized to rescue the financial industry. But the two companies have until March 31 to produce a plan for long-term profitability, including concessions from unions, creditors, suppliers and dealers. (emphasis mine)

The funding is on the condition that the union workers' wages be reduced to the level of non-unionized workers at foreign auto plants. Now I've written this before, but I'm going to say it again: there were no such stipulations given to the financial industry bailout. I'm not opposed to restrictions and conditions, but the white collar/blue collar double standard in juxtaposing the two bailouts is astounding.

For the financial bailout, no one insisted on increased regulations to ensure such abuse would not happen again, no one said that traders would need to take a commission cut, no one demanded that the financial industry take accountability and explain how this will not happen again. And it's not like this was the first time the government has stepped into the affairs of the financial sector, just like this hasn't been the first state funding given to the auto manufacturers.

What's also key here is who is required to "concede": unions, creditors, supplier, and auto dealers....hmmm, what's missing on this list? CEOs, perhaps? Why must the automakers be required become viable on the backs of the blue-collar workers who dare to earn the median income, vacation time, and health care! The average union wage is $29/hour (Factcheck.org debunks the $70/hour lie, and has a great analysis of the difference between wages earned and labor costs "per worker"). The average non-union, foreign auto maker worker makes about $24/hour, and they particpate in profit-sharing program. For example, in 2007,

Toyota Motor Corp. gave workers at its largest U.S. plant bonuses of $6,000 to $8,000, boosting the average pay at the Georgetown, KY, plant to the equivalent of $30 an hour. That compares with a $27 hourly average for UAW workers, most of whom did not receive profit-sharing checks last year.

Which means that domestic union workers and domestic plants for foreign carmakers are pretty comparable. But when times are tough, Bush is demanding that worker benefits and pay be cut, when CEOS are making ridiculous compensations despite their leadership failure. It is not the auto workers who aren't doing their jobs. Why don't we begin with making U.S. CEOs cut their pay down to what the foreign automakers earn? From USA Today:

Detroit automakers have focused on the gap between their hourly workers and those of the non-union foreign automakers in the USA. Union workers say the executive pay gap should be examined, as well.

[...]

Japanese companies are not required to break out salaries and bonuses for top executives. Instead, they lump them together. Last year, Toyota's top 37 executives earned a combined $21.6 million in salary and bonuses, according to filings with the Securities and Exchange Commission. U.K. firm Manifest Information Services, which analyzes proxy information, estimates Toyota's top executive, Hiroshi Okuda, earned $903,000 in 2006.

At Honda, the top 21 earned $11.1 million, combined, in salary and bonuses, SEC filings show.

"There is this huge gap between the average worker and the CEO, and the gap is greatest in the U.S.," Kim says. "That kind of thing might work where individual work counts the most, but in the manufacturing sector, it's all about teamwork."

This alongside the recent revelation that Bush included a one-line loophole to allow excessive executive pay in the financial bailout package. From The Washington Post:

But at the last minute, the Bush administration insisted on a one-sentence change to the provision, congressional aides said. The change stipulated that the penalty would apply only to firms that received bailout funds by selling troubled assets to the government in an auction, which was the way the Treasury Department had said it planned to use the money.

Now, however, the small change looks more like a giant loophole, according to lawmakers and legal experts. In a reversal, the Bush administration has not used auctions for any of the $335 billion committed so far from the rescue package, nor does it plan to use them in the future.

Or listen to Air America's The Daily Left report:

Again, from FactCheck:

A final note on all this: Labor costs only account for about 10 percent of the cost of producing a vehicle. And it's not the cost of American cars that people complain about; they're already often thousands of dollars less than their Japanese counterparts.

American cars don't not sell because greedy union workers earn $4 more/hour base pay than non-union workers of foreign autos do; their health care and vacation time does not result in an equal quality, more expensive car than the Hondas and Toyotas of the world. There's clearly a problem with Detroit's business model, and the Big 3 have no one to blame but their leaders, who are getting paid a shitload for their companies' unprofitability. You can't pin this one on the little guy.

(Cross-posted to Speak Truth to Power)

Well this just figures

By LindaBeth

According to Open Secrets, a recent study by the Center for Responsive Politics reveals that many of the same corporations that have come to Washington spent a pretty penny underwriting this year's Republican and Democratic conventions, just a few short months ago.

Embattled insurance giant American International Group (AIG), which received an $85 billion loan from the government just weeks after the GOP convention, gave $750,000 to each gathering. And AIG isn't the only high-profile company that sought a handout from taxpayers after writing a big check toward the summer's political gatherings. Others included Citigroup (which spent a total of $600,000 on the conventions), Goldman Sachs (which spent $505,000), Ford Motor Co. ($100,000 to each convention) and Bank of America (which spent $100,000, entirely on the Democratic convention). The federal government took over Freddie Mac just weeks after the mortgage buyer split half a million dollars between the two conventions.

Even more recently, Citi, the recent recipient of $2o billion in bailout funds, will still be paying $20 million per year for 20 years for naming rights to the new Mets Stadium. AIG isn't trimming its sponsorship budget either.

Glad our taxpayer dollars are going to some good use: funding overpriced political proms and naming stadiums that make more rich white guys even richer!

(Cross-posted to Speak Truth to Power.)

Senate Republicans kill auto bridge-loan

By Creature

They really want to see the United States economy go under. And why? Because they hate unions. The enormity of this ideological blunder by Senate Republicans cannot be overstated. Overnight stocks have already tanked and the U.S. stock market is set to do the same. All eyes now look to George Bush to save the day. How fucked up is that?

Update: Ian Welsh thinks Obama can still twist a few arms. I'm not that hopeful.

(Cross-posted at State of the Day.)

Bailouts and the corporate form

By LindaBeth

Some things have really been bothering me about the auto bailout talk vis-a-vis the financial sector bailout, and especially the recent Citigroup bailout.

First, I agree with Rachel Maddow that something seems off when the (white collar) financial sector can get a quick bailout with few strings attached with no blame placed on employees and CEOs compensation structure (or any suggestion that it be revamped to take the federal funds), but in the case of the auto manufacturing (blue collar) sector, the quick blame is placed on the unionized workers, with their outrageous expectation for health care and decent wages. These worker "demands" are unreasonably passed on to consumers in the form of higher vehicle prices, according to conservatives like Cal Thomas, and that's the real reason US car manufacturer's cannot compete. Meanwhile, CEOs still rake in overly inflated incomes, benefits, stock options, and other perks instead of lowering vehicle prices so as to not "pass on" health care costs to the consumer. Be sure to check out this excellent analysis of the cost-per-employee figures being used to blame union labor.

Class warfare, indeed. I don't mind criticizing compensation structure, but how is unionized labor being blamed for the failure of the auto industry? What about the auto CEOs? And finance CEOs compensation is irrelevant to their bailout? This is akin to blaming welfare to the poor for the economic strain on the middle class, while the average compensation for an S & P 500 CEO in 2007 is projected to have been $14.2 million; in 2006 the average Fortune 500 CEO received $10.8 million, which is 364 times the average worker. In 2007, the Ford CEO's total compensation was $21,670,674, and GM's CEO's was $14,415,914. The average of auto worker's wages (not the pay of the average worker, but the average of workers' pay) is $20.53/hour, or $42,702/year--just below the median income. And it's the unions' fault?

Second, why is the troubled banks seen as economically "necessary" and an industry with $1.1 direct workers (in 2005) and several million related workers is not? Auto manufacturing, like the manufacturing sector of time past, has been a way for lower-skilled, less educated workers to have jobs with security, with decent wages, and health care. Sure, they can get new jobs, but what will these new jobs look like? In our deindustrialized economy, when these jobs go, they aren't going to be replaced with like jobs. The loss of these jobs will undoubtedly create new economic hardships for a slew of families. When we start talking about "necessary" industries, I want to ask, Economically necessary for who, and why?

Third, and this is really what's been getting me, I am absolutely floored that when corporations are coming to the government for help in a state of desperation and vulnerability, that we are not adequately using this leverage to make demands for corporate change. We have the position of power here. These CEOs don't want their companies to go down--think of their company stock and stock options that would become valueless! Why aren't we using it to get the regulations and accountability we've desired of them?

I just used the excellent film The Corporation (watch it in installments here) in my sociology classes this week in doing the Politics and the Economy chapter, so after watching it again -- 3 times this week -- it's been invading my thoughts. Underlying the definition of the modern corporation is that it's only legal obligation is to the shareholders, and that under a ridiculous usage of the 14th Amendment, the corporation itself is a person, meaning that no actual human being is held responsible for the actions of the corporation. This was not always so. Originally, corporations existed for the purpose of the public good. Now, they do not have any commitment to the community or tho their employees; they are legally required to act in the best interests of their shareholders in the pursuit of short-term profit (which, not surprisingly, is tied to a huge chunk of CEOs' compensation). Corporations and their activities are not held accountable to the democratic process, which is supposed to keep institutional power in check. Well, until now. To me, our economic crisis ought to be an opportunity to evaluate the way we do business (literally) in the United States, and to make steps that will hold corporations ultimately accountable to the interests of the public good (environmental, social welfare, whatever), not the interests of pure profit.

(Cross-posted to Speak Truth to Power.)