Monday, March 30, 2009
--Victor Davis Hanson, The Corner
This is the hard reality facing automakers: their failure would be devastating to their executives, workers and suppliers - but probably not to the broader U.S. economy.Automakers and the couple million or so jobs they represent are apparently expendable compared to the entire financial system collapsing. Nice of Bush to leave that problem to Obama. Amputation vs. fatal infection is always a fun choice to make.
Obama is convinced that if AIG or some of the big banks collapsed, the economy could go down with them. That’s not the case with Chrysler, for sure, and probably GM, too.
The president’s budget plan is focused on building a new transportation system, one dominated by a new brand of vehicles running on new kinds of fuels. The U.S. auto industry has gotten its clock cleaned when it comes to producing hybrid cars Americans are willing to buy. The Obama plan forces both companies to move faster to catch up.
“While the impact of the auto industry is huge, it doesn’t touch everyone who needs to get credit or hire someone, like the banks do,” said the Democrat close to the White House. “The optics aren’t good, but the autos are a more discrete problem that can be dealt with on a targeted basis.”
Banks on the other hand? Too Big To Fail. One would imagine that it would be time to break the banks up if they are that large.
Conservationists claimed one of their most significant victories of the new administration Monday as President Barack Obama signed sweeping land reform legislation designating two million additional acres of public wilderness areas.As opposed to drilling, blasting, and burning the hell out of it like the GOP would do with every inch of Federal land if possible.
The federal wilderness designation provides the highest level of government protection from logging and other forms of commercial use and development.
City officials and housing advocates here and in cities as varied as Buffalo, Kansas City, Mo., and Jacksonville, Fla., say they are seeing an unsettling development: Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate.The real estate market has gotten so bad that the costs of foreclosing on some houses now exceeds the value of the house. The owner has walked away, the bank is walking away, and due to the maze of arcane bullshit that is your average CDO, nobody seems to know who actually holds the title to the home.
The so-called bank walkaways rarely mean relief for the property owners, caught unaware months after the fact, and often mean additional financial burdens and bureaucratic headaches. Technically, they still owe on the mortgage, but as a practicality, rarely would a mortgage holder receive any more payments on the loan. The way mortgages are bundled and resold, it can be enormously time-consuming just trying to determine what company holds the loan on a property thought to be in foreclosure.
In Ms. James’s case, the company that was most recently servicing her loan is now defunct. Its parent company filed for bankruptcy and dissolved. And the original bank that sold her the loan said it could not find a record of it.“It is what some of us think is the next wave of the crisis,” said Kermit Lind, a clinical professor at the Cleveland-Marshall College of Law and an expert on foreclosure law.
The practical upshot? The city/county taxpayer gets stuck with the bill and an eyesore of a vandalized, broken down property they can't move and they have to maintain, losing money off of it. Now multiply that by thousands nationwide, and you're beginning to see why we're only beginning down the steep slope to hell.
The commercial real estate crash is bad enough, but the residential real estate crash still has a long, long way to go.
Texas Sen. John Cornyn is threatening “World War III” if Democrats try to seat Al Franken in the Senate before Norm Coleman can pursue his case through the federal courts.Eric Kleefield at TPM has more.
Cornyn, the chairman of the National Republican Senatorial Committee, acknowledges that a federal challenge to November’s elections could take “years” to resolve. But he’s adamant that Coleman deserves that chance — even if it means Minnesota is short a senator for the duration.
TPM asked DSCC communications director Eric Schultz for comment. "Republicans have made it clear they will hold this Senate seat hostage in order to pursue their political agenda - at the hefty expense of Minnesota having full representation in Congress," said Schultz. "We're all awaiting the three-judge panel to return its verdict, and once they do, we will have yet another confirmation that Al Franken won the election - and hopefully he can get to Washington to do the job he was elected to do."Little chance of that, it seems. Hello, Democrats? Your Big Fat Party Of No Issue is calling.
George W. Bush came to office having lost the popular vote, with only 50 Republicans in the Senate. After his disputed election, pundits insisted Bush would have to scale back his proposed massive tax cuts for the rich. Instead, Bush managed to enact several rounds of tax cuts that substantially exceeded those in his campaign platform, along with two war resolutions, a Medicare prescription drug benefit designed to maximize profits for the health care industry, energy legislation, education reform, and sundry other items. Whatever the substantive merits of this agenda, its passage represented an impressive feat of political leverage, accomplished through near-total partisan discipline.What's wrong with the Democratic Party in 2009?
Obama has come into office having won the popular vote by seven percentage points, along with a 79-seat edge in the House, a 17-seat edge in the Senate, and massive public demand for change. But it's already clear he is receiving less, not more, deference from his own party. Democrats have treated Obama with studied diffidence, both in their support for the substance of his agenda and (more importantly) their willingness to support it procedurally.
Here endeth the lesson.
GM will get 60 days and Chrysler 30 days in which to make a final push toward proving they can run viable businesses. If Chrysler succeeds, it will receive a $6 billion loan. In GM's case, the officials would not specify how much money the carmaker might receive.So Chrysler has until April 30 and GM May 30 to turn it around, or the Big 3 is the Big One: Ford. Oh yes, this is a disaster of a mess of a screw-up...but it's yet another mess Obama inherited from Bush. Let's not forget this. An orderly bankruptcy six months ago would have solved the problem. Now? Bush punted because he didn't want to be the President that had to make the tough calls on automakers.
In the case of both companies, the officials said, stakeholders - and particularly debt holders in both companies - had not done enough to relieve the automakers of ongoing financial burdens.
"We have made very clear that we expect a very, very substantial reduction in liability for both companies," one official said.
The administration also said a structured bankruptcy is possible.
"While Chrysler and GM are different companies with different paths forward, both have unsustainable liabilities and both need a fresh start," according to an administration document. "Their best chance at success may well require utilizing the bankruptcy code in a quick and surgical way."
In order to help assuage consumer fears about buying cars from these companies as they restructure, the government is also setting aside funds to back up warranties on vehicles GM and Chrysler sell.
How long will it take I wonder before the wingnuts call for Obama to completely dissolve the UAW in order to save these companies? They're already comparing him to Hugo Chavez. How quickly the wingers forget Saint Ronnie fired 11,000 air traffic controllers and Reagan and the Bushes spent 20 years busting unions afterwards, but American workers are supposed to feel fear and dread at this "unprecedented" interference in the workplace for canning a CEO.
You get bailout money, you get rules.
- Eight people were killed in a shooting rampage at a nursing home in NC.
- Economists predict nearly all the G8 countries could be facing double-digit unemployment by the end of 2010.
- Insurance companies are seemingly blacklisting millions of people with common ailments.
- A second terrorist attack this month in Lahore leaves 22 dead in Pakistan.
- A new study shows playuing video games may improve your vision.