Fearing Detroit’s auto-destruction, Henry Paulson has decreed a bailout of automakers.
For details of this smokin’ deal, see the Wall Street Journal‘s ‘U.S. Auto Makers Look to Federal Sales Incentives’
That’s the automakers’ reward for having spent the past 50 years refusing to produce electric cars and other energy-saving modes of transportation and lobbying aggressively against energy-saving and convenient mass-transit systems.
Good news for me, though: Paulson’s also going to bail out my bank.
Best headline today: ‘Citi Dump: Feds, Bank Giant in $1.2 Trillion “Toxic” Rescue’
Best bailout today: The Detroit Rescue, which is a landmark event in the history of U.S. capitalism: the end of the free-market system and the start of a full-blown free-marketing system.
At first blush, these steps may seem insane. A bank will be created to manage Citibank’s “toxic” assets — the ones that Citi’s executives worked so hard to acquire but which now are threatening their empire.
As for Detroit, auto sales are down, so the federal government is actually going to subsidize the automakers’ attempts to sell us more cars.
Does this mean even more TV ads bombarding us with news of vehicle “sales events”? (Adding to our irritation, the ads continue to say “sales events” or just plain “events,” instead of simply calling them “sales.” Hey, everybody, it’s an “event”! Let’s all go to the “event”!)
Oh, the weather outside is frightful, but the fire sales are so delightful. So let there be snow jobs.
These new twists to corporate welfare could be considered reckless driving leading perhaps to vehicular suicide, but only if you think that Paulson and the bailout crew really know what they’re doing instead of just scrambling to get the money flowing on Wall Street.
The bankers and their lawyers know full well how they made their billions of dollars: by setting up credit-default swaps and clever trading instruments based on shaky mortgage deals. So why don’t they know how to manufacture the proper antidote for themselves (and the global economy and, lastly, us)?
Think of the Street’s bankers and lawyers as kids sweltering on high sidewalks and then the federal government comes in and turns on the fireplugs’ faucets, flooding the place with gushes of cool, cool water.
Meanwhile, start thinking about what it would take to put you and your family in that brand-new vehicle you can’t afford because we’re in a recession.
Here’s a tip: Don’t pay extra for the “undercoating.” You’ve already paid dearly for it.
In the past 60 years, the federal government has built for the automakers the Interstate Highway System and at the same time refused similar help to the railroads, thus letting rail passenger service wither away. And of course, the feds heavily subsidized airports and other infrastructure for airlines while letting inner-city train stations decay.
What’s next? Henry Paulson’s going to spend the money to raise Eastern Air Lines from the dead?
In other rescue news, Barack Obama‘s team is working hard to help Hillary Clinton overcome her election embarrassment.
Eerie parallel to Wall Street’s meltdown: Wasn’t it Obama who caused Hillary’s meltdown? And now he’s bailing her out?
On Wall Street, the bankers melted down the economy, and Paulson, the ex-CEO of Goldman Sachs and thus one of the most powerful Wall Street bankers, is spending billions of your money to rescue them.
(Rant continues here.)
The bailouts are spreading like a fungus. Not that bailouts aren’t needed. But when exactly is the federal government’s infectious enthusiasm to help our corporate citizens going to reach the country’s human citizens?
Or at the very least, when is the federal government going to start bailing out the state and city governments that are having to slash their budgets — which means sacrificing the already underfunded social programs that promote the general welfare throughout the country?
If it pursues its present course, the federal government will eventually have to at least start setting up bread lines. Otherwise we’ll all be too weak to go further into debt to buy those overpriced, gas-guzzling Detroit cars.
Here’s an idea: Start directly saving the workers who build those cars by helping them restructure their mortgages and by making sure that vital social services for them and other ordinary Americans aren’t cut. Do what the FDIC’s Susan Bair suggests and attack the problem of getting the money flowing by starting at the bottom and working your way up, instead of starting at the top and letting these schemes trickle down — if they trickle down to us at all.
While you’re waiting for the government’s rescue engine to warm up . . .
NO PARTICULAR ORDER:
Bloomberg: ‘U.S. Stock Futures Climb as Citigroup Rallies 41 Percent; Exxon Falls’
Salon: ‘Barack Obama, honeymoon killer?’
“The Clintonites in his Cabinet, forgiveness for Lieberman, the creeping signs of centrism — progressives aren’t ready to panic, yet.”
Wall Street Journal: ‘U.S. Agrees to Rescue Struggling Citigroup’
Plan Injects $20 Billion in Fresh Capital, Guarantees $306 Billion in Toxic Assets
Times (U.K.): ‘Thirteen burned alive in Baghdad bus bomb’
“Prospective White House employees must cough up an unprecedented amount of detail about their online activity. Is the new administration being smart — or scary?”
GE Free NZ in food and environment is concerned that transgenic animal experiments in New Zealand are being undertaken without sufficient knowledge of the constructs being created, or analysis of the effects of cloning.
It has been announced by the CEO of Nexia Biotechnologies Dr. Jeffrey Turner that his US-based company has destroyed 214 genetically modified goats that were modified with a spider silk gene and bred to produce fibre that could be used in sutures and body armour. He admitted that the project was one of the company’s “less successful” programs to develop high-strength fibers”.
Wall Street Journal: ‘Anatomy of the Morgan Stanley Panic’
“Trading Records Tell Tale of How Rivals’ Bearish Bets Pounded Stock in September.”
Wall Street Journal: ‘Scowcroft Protégés on Obama’s Radar’
Wall Street Journal: ‘U.S. Auto Makers Look to Federal Sales Incentives’
As executives from the Big Three auto makers prepare to make a second pitch for a federal bailout, concern is rising in Detroit that it will be difficult to show lawmakers how they can return to profitability with sales at their current depressed level.
Their solution: Get Washington to help them sell more cars.
General Motors Corp., Ford Motor Co. and Chrysler LLC may go back to Washington and urge Congress to take measures to spur consumer demand, in addition to providing the $25 billion in loans the auto companies seek. . . .
On Monday, Sen. Charles Schumer (D., N.Y.) plans to send a letter urging the Federal Reserve to make financing available for the auto companies’ lending arms, which would allow them to offer more auto loans, a spokesman for the senator said. The letter will also ask the Treasury to speed approval of GMAC LLC’s request to become a bank holding company.
Vehicle sales are tracking at such a low level right now that most or all auto makers are losing money in North America. Globally, Toyota Motor Corp., Chinese car makers and even Europe’s normally recession-proof luxury auto makers are struggling to stanch losses, the executive of the Big Three firms said.
N.Y. Post: ‘Citi Dump: Feds, Bank Giant in $1.2 Trillion “Toxic” Rescue’
“The feds late last night announced an unprecedented plan to rescue Citigroup by taking a $20 billion stake in the desperately troubled . . .”
Newsday: ‘Gunman in NJ church kills his wife, wounds 2 others’
Times (U.K.): ‘Gordon Brown defends plans to tax the rich’
N.Y. Post: ‘HILLARY NOMINATION WOULD BE AN OBAMA-NATION’ (Dick Morris)
It is still hard to believe but, if Hillary Clinton’s “confidantes” are to be trusted, Barack Obama is about to appoint her secretary of state and she is about to accept. This appointment represents the capstone of betrayal of Obama’s promise to be the “change we can believe in.”
Having upended the Democratic Party, largely over his different views on foreign policy and the war in Iraq, he now turns to the leader of the ancient regime he ousted, derided, mocked and criticized to take over the top international-affairs position in his administration.
No longer, apparently, does he distrust Hillary’s “judgment,” as he did during the debates when he denounced her vote on the Iraq War resolution. Now, all is forgiven. After all, Obama’s election, the only change he apparently truly believed in, is a fait accompli.
Apart from the breathtaking cynicism of the appointment lies the total lack of foreign-policy experience in the new partnership. Neither Clinton nor Obama has spent five minutes conducting any aspect of foreign policy in the past. Neither has ever negotiated anything or dealt with diplomatic issues. It is the blonde leading the blind.
Salon: ‘Progressive complaints about Obama’s appointments’ (Glenn Greenwald)
N.Y. Times: ‘Radio Host Has Drug Company Ties’
An influential psychiatrist who was the host of the popular public radio program “The Infinite Mind” earned at least $1.3 million from 2000 to 2007 giving marketing lectures for drugmakers, income not mentioned on the program.
The psychiatrist and radio host, Dr. Frederick K. Goodwin, is the latest in a series of doctors and researchers whose ties to drugmakers have been uncovered by Senator Charles E. Grassley, Republican of Iowa. Dr. Goodwin, a former director of the National Institute of Mental Health, is the first news media figure to be investigated.
Dr. Goodwin’s weekly radio programs have often touched on subjects important to the commercial interests of the companies for which he consults. In a program broadcast on Sept. 20, 2005, he warned that children with bipolar disorder who were left untreated could suffer brain damage, a controversial view.
“But as we’ll be hearing today,” Dr. Goodwin told his audience, “modern treatments — mood stabilizers in particular — have been proven both safe and effective in bipolar children.”
That same day, GlaxoSmithKline paid Dr. Goodwin $2,500 to give a promotional lecture for its mood stabilizer drug, Lamictal, at the Ritz Carlton Golf Resort in Naples, Fla. In all, GlaxoSmithKline paid him more than $329,000 that year for promoting Lamictal, records given to Congressional investigators show.
(Full disclosure: Daily doses of Lamictal are to blame for enabling me to write this column. If I had received $329,000 from the drug’s manufacturer, I wouldn’t have needed the drug.)
This article from the Village Voice Archive was posted on November 24, 2008