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Cash for Clapboards & Kennedy’s Replacement

Wouldn’t it be nice if the government decided to buy foreclosed homes – invite people to turn in homes they no longer want or can afford – like homes that are not energy efficient? The government could then buy these houses, rehabilitate them and sell them to people who can afford them! 

I suggest we call that program: “<strong>Cash for Clapboards” (CACLAP)</strong>. 

Its forerunner, “Cash for Clunkers” seems to have: 

•          Ignited under new car sales.

•          Thrilled General Motors (GM) so much, the auto maker decided to lend dealers money to run the program…while those dealers wait for the government to reimburse them!

•          Increased vehicle production. GM is adding 60-thousand vehicles in the third and fourth quarters and re-hiring about 1400 laid-off workers. 

Under The Car Allowance Rebate System (CARS program), owners traded in their gas guzzlers. That made them eligible to get from 35-hundred to 45-hundred-dollars towards buying a newer model that meets or exceeds higher mile-per-gallon standards. Dealers fronted the money and the government reimbursed them. 

According to the Associated Press, the government’s “Cash for Clunkers” program has: <em>revived business at car dealerships, taken gas-guzzlers off the road and given a badly needed boost to struggling auto factories. By many measures, the government’s Cash for Clunkers program has been a success</em>”. 

Well then! My “Cash for Clapboards” (CACLAP) program could similarly inject a substantial infusion of cash into the struggling housing market/industry. 

Under CACLAP, homeowners could trade in that draughty old colonial for that new, energy-efficient detached with the big yard that you’ve been drooling over! Water saving, energy efficient appliances, solar panels on the roof – just think of it! 

Cash for Clunkers ends Monday, August 24, 2009. I say we start “Cash for Clapboards” immediately! 

*****  

I don’t support changing the Massachusetts Succession Law because a situation has developed that could benefit Democrats. 

The Boston Globe says Senator Ted Kennedy (who’s been battling brain cancer since May 2008) has written to Governor Deval Patrick asking the governor and legislative leaders to change the succession law. Kennedy apparently wants to ensure that Massachusetts will have a Senate vote when his seat becomes vacant. 

Massachusetts governors used to have the power to fill Senate vacancies. 

But in 2004, democratic lawmakers didn’t want republican Governor Mitt Romney to fill Kerry’s seat with a Republican if Kerry became president. So Democrats (who also held the majority back then) changed the law and created a five-month vacancy. 

Now that little self-serving trick could come back to bite democrats. President Obama and Democrats may face a close vote to pass health care legislation…and if Kennedy is out of the running, that’s one crucial vote short…unless that seat can be filled quickly! 

I tend to be pro-Democrat, but that doesn’t mean I support everything they do…or want to do. 

Why don’t I support it? <strong>Because it was Democrats who changed the law when it didn’t suit them – and if they changed it solely to tie Romney’s hands – what makes them think they can just as opportunistically change it now</strong>? 

Sometimes just having the required votes and the ability to do something…<em>doesn’t mean you should do it! </em>I like it when people fall into holes that they’ve dug for others! 

At one time Rome was the superpower. At one point it was Egypt. The Huns ruled, the Aztecs ruled…and more recently, Europe ruled. Empires come…empires go. Civilizations come and civilizations go! 

Learn from this. Politicians come and politicians go. Parties come and parties go! 

<strong>Whichever party has a majority should understand that this state of affairs will never last! What use is history is we never learn from it?</strong>

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ODE: To Cash For Clunkers

Have you junked your old car yet — under the government’s Car Allowance Rebate System (CARS)…aka “Cash for Clunkers”?

The House of Representatives passed the 2 billion extension July 31 and the Senate approved the money August 06.

The voluntary vehicle trade-in and purchase/lease program falls under the Consumer Assistance to Recycle and Save Act of 2009. Consumers, who trade in a less fuel efficient car or truck, can get a government rebate of up to 45 hundred dollars to pay for a new, more fuel efficient car or truck from a participating dealer.

If you’re wondering why congress rushed to approve more money (after the initial one-billion-dollars ran out), while they’re balking over Health Care, here’s my take on it.

Forgive my poetic license:

“Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore,
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door…” **

Not the newly homeless or jobless about
Who go hungry…we think!?
Nor those whose pensions are wiped out
Their HEALTH be dammed! Live on the brink…

Easier to spend billions on clunkers
Get new cars rolling off the lot
Than invest in Healthcare
For those who need support

WE your congressmen…and women
Hate waste and graft, we’re moved by expedience
Having voted for a wasteful war
(Well, we didn’t have good examples from before)
We find, we think, and do concur
That universal healthcare is a…
Socialist way to go!

Someone dared to pipe up from the crowd:
Excuse me, Mr. Big, Omniscient Congressman
Social Security IS a socialist concept
AND IT REALLY COSTS A LOT

Is way too expensive
And likely to go bankrupt!

And the big, powerful congressman
Retorted: don’t think!
You sent us to Washington to do that for you
Those decisions, YOU, must let US do
Facts are unimportant things
It’s not the Truth
But the spin you wrap it in!

Clunkers make us look caring, dear
New vehicle sales will double, triple
Employers will hire
So ultimately, the jobless will get Healthcare

Then he added: Well, only those with jobs
Whose employers still offer healthcare
And those workers who can afford it
But does that matter…?

** Inscription on Statue of Liberty, from Emma Lazarus Poem, “The New Colossus”- 1883)

Bailouts and Inevitability

We’re now being told to invest in construction and telecom stocks…

Because the president elect has outlined a plan to pour billions into infrastructure to jumpstart the economy. And some of that will include broadband.

Mr. Obama was the guest on NBC’s Meet the Press, Sunday (December 07). He outlined his plans for a path for long-term, sustainable economic growth.

OBAMA: …and that’s why I spoke in my radio address on Saturday about the importance of investing in the largest infrastructure program–in roads and bridges and, and other traditional infrastructure–since the building of the federal highway system in the 1950s; rebuilding our schools and making sure that they’re energy efficient; making sure that we’re investing in electronic medical records and other technologies that can drive down health care costs. All those things are not only immediate–part of an immediate stimulus package to the economy, but they’re also down payments on the kind of long-term, sustainable growth that we need…

BROKAW: …the real question in the stimulus program that you have just described and as you shared with, with the American audience in your radio address is how quickly will it mean jobs out there across America and how much is it going to cost and who’s going to pay for it?

OBAMA: Well, I think we can get a lot of work done fast. When I met with the governors, all of them have projects that are shovel ready, that are going to require us to get the money out the door, but they’ve already lined up the projects and they can make them work.

So there we have it, from the horse’s mouth, so to speak.

• On another talking point…the auto industry, I’m picking up hints that the auto bailout is just a stop-gap measure to keep the economy from sliding deeper into recession. Seems to me the U.S. auto industry, especially GM and Chrysler, are on their deathbed and will eventually go bankrupt. Giving them a loan will only keep factories and jobs from disappearing now, and NOW (in an already weakened economy) is NOT the best time for this to happen. Technically, they’re going on life support…but there won’t be any donors.

So, does the president elect think the Big Three deserve to survive? Brokaw asked:

OBAMA: Well, I think that the Big Three U.S. automakers have made repeated strategic mistakes. They have not managed that industry the way they should have, and I’ve been a strong critic of the auto industry’s failure to adapt to changing times–building small cars and energy efficient cars that are going to adapt to a new market. But what I’ve also said is, is that the auto industry is the backbone of American manufacturing. It is a huge employer across many states. Millions of people, directly or indirectly, are reliant on that industry, and so I don’t think it’s an option to simply allow it to collapse…

(Mr. Obama believes any government assistance should come with conditions. He also thinks it’s NOT a good time for such a large industry to go belly-up.)

…some people have said let’s just send them through a bankruptcy process. Well, even as large a company as GM, in ordinary times, might be able to go through a Chapter Eleven bankruptcy, restructure, and still keep their business operations going. When you are seeing this kind of collapse at the same time as you’ve got the financial system as shaky as, as it is, that means that we’re going to have to figure out ways to put the pressure on the way a bankruptcy court would, demand accountability, demand serious changes. But do so in a way that it allows them to keep the factory doors open.

• Like agent Smith told Neo in the movie: The Matrix: (Pretend Neo/Mr. Anderson is the auto industry.)

“You hear that Mr. Anderson? That is the sound of inevitability. It is the sound of your death… Goodbye, Mr. Anderson”.

Some would argue that Neo survived. Remains to be seen how much life imitates the movies!

Auto Bailouts and Ted Turner


2010…

U.S automakers Ford, Chrysler and GM would have us believe 2010 is their “Year of Magical Turnaround”.

But for NOW, the CEO’s from the big three U.S automakers are either at the mercy of Congress…or their own folly!

Today, (December 04/2008) they returned to Capitol Hill looking for a “rescue package/bailout/bridge loan”. And to underscore their good faith and show that they too can turnaround, the auto execs left the corporate jets at home. All three arrived in Washington in fancy, futuristic, green models.

But they still need to sell congress and the American people on their long-term viability. And so far, they don’t seem to be doing too well.

A majority of Americans (61-percent) do not support giving government/tax dollars to U.S auto companies.

That’s according to a new poll (CNN/Opinion Research Corporation) released Wednesday. (December 03/2008). About 11-hundred people were surveyed by phone December 1-2. The margin of error is plus or minus 3-percent.

Just before Thanksgiving, the Big Three was asking for 25-billion-dollars. Two weeks later, 25-billion is no longer enough. Ford, GM and Chrysler have added another 9-billion. They say they now need 34-billion in emergency loans from the government.

General Motors and Chrysler are much worse off than Ford. Both are burning through billions of dollars in cash. At privately held Chrysler (owned by New York based Cerberus Capital Management and Germany’s Daimler AG), the company won’t even disclose CEO Robert Nardelli’s compensation package!

Here’s what the automakers are asking for:

• GM says it needs 4 billion immediately to avoid complete collapse before year’s end. It also wants 8-billion early next year and access to a 6-billion-dollar line of credit.

• CHRYSLER is asking for a 7-billion-dollar bridge loan to help it operate through 2009.

• FORD wants a 9-billion-dollar line of credit, but might not really need the money.

While lawmakers debate if they should use tax dollars to help “save” the automakers, Americans have apparently decided already. According to the CNN/Opinion Research poll:

• 70% of respondents think any auto bailout is unfair to taxpayers.

• Most also think a bailout would not help the economy.

• Only 15% of those polled think a bankruptcy in the auto industry would have an immediate impact on their families.

• 43% think a bankruptcy would eventually have an effect on them.

Among those who would rather NOT help the automakers, is media mogul, Ted Turner. The Cable News Network (CNN) founder appeared on NBC’s Meet the Press, Sunday, with host Tom Brokaw. Here is an excerpt:

BROKAW: You’re not very sympathetic to what’s going on in Detroit.

TURNER
: Well, I am. Really, I don’t like to see anybody do–not doing well, but I’m afraid–I saw it coming years ago, Detroit was going–headed for a crash, and it’s amazing to me that they didn’t see it, either, you know, and start building smaller cars, more fuel efficient cars a long time ago. Because anybody, anybody with half a brain could see we’re going to have, you know, big disruptions in the fossil fuel business.

BROKAW: Let me read you what you had to say about it recently. “If we give the Big Three automakers a $25 billion bailout, they’re going to blow through it by the first of March. They won’t know what to do with it. Let them go bankrupt and get Toyota to buy them out.” A lot of jobs are connected to the American automobile industry. Do you think that the government ought not to have any role in trying to put them back together?

TURNER
: I don’t, I really don’t know, but I feel like that it would be a lot better if we’re going to put–if the United States government’s going to put money in anything, why not put it into clean, renewable energy and create jobs for the future instead of trying to keep alive a smoke stack industry of the past whose days–the days of big automobiles are over. The days of fossil fuel are over”.

I see it this way. This may be the dawning of yet another age in the energy revolution.

In the 1800’s, whaling was very big business. And New England, NOT the Gulf Coast, was America’s energy hub.

Here in Massachusetts, New Bedford was the world’s whaling center. I read online that back in the 1840’s, the now depressed city was home port for about 400 of the world’s 700 whaling ships.

When oil arrived, and lamps started using kerosene instead of whale oil, New Bedford, “The City that Lit the World,” was out. Texas was in!

But New England survived…and so did America. The power was not lost. It just shifted to another region.

There’s a lesson there somewhere…!

No Legislation…Without a Plan!

“No Taxation Without Representation” The early cry of those pesky Boston revolutionaries…

Today (November 20/2008) Congress is telling auto makers: No Legislation Without a Plan!

Congress has sent the auto executives back home empty-handed…with one directive: YOU HAVE TWELVE DAYS TO SHOW ME YOUR PLANS!

The CEO’s of these three companies, GM, Chrysler and Ford didn’t find much sympathy at the Capitol. And the story about their fancy, expensive private jets did not help, either! GM’s Rick Waggoner says, well, he’s been swamped lately, so he hasn’t done much flying on the company jet. At this point in time, Mr. Waggoner, you don’t need a jet. You need a bailout plan. Ditch the jet and come up with a plan. Quickly!

I saw on T.V an auto worker, who like many others, was shouting to save her job. She said she had worked in the auto industry for 26 years; she just needed another four to retire. I’m like: So what. Just because you want to retire in style, why should taxpayers foot that bill? Many can’t even afford to retire! I saw her as a symbol of everything that’s wrong with the auto industry.

It’s not that I don’t feel sorry for this woman. I would probably feel the same way in her shoes. But many of these auto workers retired at fifty! Which leads me to think that the whole retirement culture in the U-S needs to change. Workers need to start taking responsibility for their own retirement.

The age of cradle to grave employer largess is almost over. That was the Mesozoic age. T-Rex is gone. (If the Googles out there want to do it, no problem.) This is the age of the 401K.

When we don’t plan wisely, we play the blame game. The United Auto Workers President says lawmakers need to take immediate action…because “inaction is simply not an option.” If you’re looking for dinosaurs…here’s another one.

Ron Gettelfiner says: “If one of the companies goes over the cliff, it could take one or more with it.” Translate that to mean: it would also take the UAW with it. Are we to believe he’s more concerned about “jobs” than the UAW’s currently shaky future, without a bailout? Many people don’t seem to mind the auto companies going down at all! It would give the three companies a chance to tear up those constricting UAW contracts, for one!

The UAW boss is also blaming states like Alabama, and their lawmakers, for offering billions in juicy tax breaks to foreign auto companies, (to compete against us) while opposing help for Detroit.

Maybe telling Toyota to go set up shop in India would have made more Americans buy more hummers or Escalades? So now Ford, GM and Chrysler are facing bankruptcy because Honda is making cars here? If we’re going to be buying foreign cars, anyway, are we not better off making them here…and salvaging some auto jobs?

The auto companies say a 25-billion-dollar bridge loan will let them stay afloat through to the end of the year. Now that’s what I call a REAL Bridge to Nowhere. The Alaskans insist that their bridge was going somewhere, and it was. (Sorry Ketchikan!) Nobody can see where this rescue bridge across The Great Lakes is headed. Not even Congress. Hence the need for a plan…

 Like how GM plans to stop bleeding 2-billion-dollars a month?
 Like how Ford, GM and Chrysler plan to make better/cheaper cars?
 How they plan to reign in suffocating health care costs?
 How they plan to streamline their assembly lines?
 Show me your new green/fuel efficient technologies!
 Show me how you plan to restructure!
 And finally, when do they plan to call Sarah Palin to help put their jets on e-bay?

All is not lost. Lawmakers (including a bipartisan group from key auto manufacturing states) are still trying to cobble together an agreement of some sort.

Hopefully we’ll have some blueprints, after Thanksgiving.

50 Thousand Jobs…Going, Gone!

I was at my local Bank of America branch Monday morning (November 17/2008) when a staffer told me the bad news. The markets are down again…City Bank is cutting FIFTY thousand jobs!

What? Did he say Citi is cutting 50 thousand jobs? 50 – as in 10, 20, 30, 40, 50? Not 500, not 5-thousand…50-thousand? (Well 52-thousand to be exact!) Citi Group is also selling off assets. The New York-based banking giant has been bleeding cash for the last year or so. Last quarter, it lost 3-billion-dollars!

Still, I was in shock. And for the first time since this “crisis” began, I was scared. I’m beginning to get a taste of what it felt like during the Great Depression and I don’t like it! When 50-thousand people clean out their desks and go home, there go 50-thousand people whose spending power just got cut to zero or near zero.

About half of these job cuts, some 26-thousand, will be here in the U.S. That means fewer people taking public transportation; fewer people ordering out or eating out; fewer people able to pay their mortgages, meaning more homes are likely to be foreclosed; fewer people going to the movies; fewer people buying big-ticket electronics; fewer people making charitable donations; fewer people buying gas or cars…or taking vacations. Toll revenues go down, tax revenues go down, and people’s hopes and dreams go down.

Experts have been warning American consumers that they were over-exposed. Was no-one listening? There were voices urging both consumers and the government to cut down on debt. Too much borrowing. But who cared. The Bush administration’s first response was to give people a 600-dollar “tax rebate” and send them out to stimulate the economy. Shop, Baby, Shop! Buy, Baby, Buy!

Now credit card companies are stealthily lowering consumers’ credit limits. If someone charged 5-thousand-dollars on a card with a 10-thousand-dollar limit and the credit card company lowers the credit limit to 6-thousand, or 5-thousand, that person’s FICO score is messed up! Just like that. And now that consumer runs into all kinds of credit issues, especially if the consumer is using several credit cards with high balances.

The Wall Street Journal says the mining industry is beginning to feel the pinch. Seems China’s building boom is contracting and demand for steel and metals worldwide is slowing. The Journal says America’s largest steelmaker (by production), U.S. Steel, plans to lay off almost 700 unionized workers.

Cruise ships are feeling the pinch. Now is a mighty good time to go cruising, if you can afford it. Retailers are panicking about the holiday shopping season – they say it’s make or break. (Retailers always say that!) But this time they may just be right. Experts say there may be a rash of closings after the holidays, if sales tank!

Here in Massachusetts, tolls are being raised. Some as high as 7-dollars (for cars/cash. With transponders it’s $6.00. Taxis pay $9.00 cash). People are taking creative ways to avoid the tolls, cutting through formerly quiet suburbs. Residents are beginning to gripe that they can no longer reverse out of their driveways!

Amid all this, I have an uneasy feeling over a statement from Citi Group. The bank says it has lower exposure to U.S. consumer mortgages than other banks, like Bank of America and JPMorgan Chase.

Sooo…if Citi has lower exposure than those other banks and it’s laying off 50-thousand people…what does that tell us about those other banks with higher exposure? Massive layoffs there too…? Not necessarily. But still, very, very scary!

On a more positive note:
While Ford, Chrysler and GM are in Washington begging for a bailout, Honda (Japan’s number two carmaker) today dedicated its new plant in Indiana.

Nearly 900 people are making fuel efficient Honda Civics at its Greensburg plant. Did you hear that Detroit…you and your leading cheerleader, Senator Carl Levine (D-MI)? Honda plans to add a second shift next year. The plant is expected to produce 200-thousand cars annually, and employ 2-thousand workers at full capacity. (Honda says it got 30-thousand applications!)

The first cars rolled off the line October 09/2008. Honda apparently isn’t looking for a bailout from Congress.

Why did Honda even bother building a new plant? It can as well just march up to Chrysler or GM and take over their building. They don’t seem to know what to do with it, anyway.

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