bmagnus

A Few Last Thoughts on Auto Manufacturing

By now, many words have been typed about the Big Three Bailout, also known as the “screw the UAW plan” or alternatively, the “Help Cerberus Make it’s Numbers plan“. Seriously, if a “competitive wage” meant “we’re going to give you the same pay they get in the Toyota plant”, nobody would have an issue with it, but it’s clear that what is meant is a more drastic slashing of wages and benefits.

Alas, it looks to me (and many others) like the only “plan” Ford, Chrysler, and GM have for becoming profitable in the future is to “spend less money“: cut wages, cut employment rolls, renegotiate with suppliers, cut expenses in everything but the executive suite. Nothing as innovative as making cars people want to buy and selling them for a reasonable sum of money, nothing like trying to lobby for Medicare For All and instantly — using their own numbers — cut $1500 from the price of making a car.

I think it says a lot that Ford is just saying “No, thanks. We don’t need money on those terms.”

In an interesting wrinkle, Honda is threatening to pull out of Japan! The CEO is frustrated with a government that isn’t doing anything to help exporters. The way things are still headed, I bet they can buy some nice, idle car plants near Detroit.

The auto industry is not the only American manufacturing interest, merely one of the biggest. Manufacturing as a whole in this nation is “tanking hard.” Some might say that is because we can’t compete globally. And when they do, they imply that either wages are too high or taxes and other regulations are too onerous. However, the bottom line is that without manufacturing, we won’t have the basis for a sound economy. We can’t run a country on selling one another lattes and cheap goods from overseas. The “service economy” is a giant pyramid scheme built on the idea that, well, we don’t have to build anything. The truth is that if we can’t create anything of value, all our money will eventually go the the countries that can.

Maybe we can start by selling more efficient busses to the world.

In closing: How does electronic voting compare to, say, a Vegas slot machine?; Drillers have close encounter with molten magma, find novel way for scientists to study volcanism; and sadly, Christmas tree thefts are on the rise. I still personally don’t get the charm of having a “real” Christmas tree sitting in your home. It’s messy, it requires care, it’s flamable, some people are allergic to them, and then you have to figure out how to get rid of the thing after Christmas. I’d rather plant one outside! Oh, and yes, I have planted multiple trees.

Happy Solstice. It’s gonna be a long night.

SNOW DAY!

Yes, it’s snowing in Vegas. Actually, snowing for the second time this week. But this time they have actually cancelled school. Yay, I guess.

Elsewhere tomorrow, the Feds are meeting to talk about reining in some of the abuses controvertial practices that credit card companies have used to bilk it’s most strapped customers. These include but are surely not limited to “practices like raising the interest rates on pre-existing credit card balances unless a payment is over 30 days late, and applying payments in a way that maximizes interest penalties.” It’s about freaking time.

In closing (yes, already): if we can’t agree that the death penalty is wrong, can we at least agree that it costs too much money?; Carrie brings us a dose of JapanFilter and the lack of safety net for workers who lose their jobs; some fscinating charts on what has happened to the American consumer; Maha on the middle class, wages, and the UAW; the head of the SEC admits they had warnings about what Madoff was up to and he has no good explanation for why they didn’t do anything about it; a Month Without Chryslers; and some renters who took matters into their own hands.

Economy Rodeo

Well, actually it’s more like bullfighting. The kind where they slaughter the bull at the end?

Just to get us in the proper mood, Harper’s reminds us that everything is worse than it at first appears, thanks to pollyannaish manipulation of the actual data. Really, most of this stuff you already know if you’ve been reading ShortWoman for long enough, but this article traces each tweak to its roots.

The Economic Policy Institute was on yesterday about how the number of job applicants is surging while the number of actual jobs to apply for is plummeting. Today we found out that the number of first time jobless claims is higher than it has been in the last 26 years. The 4 week moving average is up over 500,000, which would tend to indicate that 2 million people have applied for unemployment for the first time in the last month alone. Why do I say “tend to indicate”? Because that number is seasonally adjusted. Nevertheless, Ouch!

Nor are things tough all over only for individuals. It so happens that 43 of our 50 states are in financial trouble, too.

As crazy as the stock market has been, there is some chart-based evidence to support (heh, support. a stock charting joke) the idea that even now, the S&P 500 is going to drop at least another 10% just to “revert to the mean,” or the average growth it has had not just since the Great Depression, but since 1870.

There is some good news. Or is it bad news? For the first time since they started measuring it, household debt has declined! People are paying cash, using “lay-a-way” plans, anything but running up more debt. Even if they wanted more debt, American families are having a tough time finding someone who wants to lend. The “bad” part of this is it means a drop in spending.

A site that is only recently added to my list of Things To Read is Calculated Risk. Two recommended items are on net worth and home equity.

Yeah I know, I don’t go linking Kos very often, but “how we crashed the economy” is a good read.

A UCLA economist says that as bad as things are right now, 2009 is going to be worse.

And finally, some recommendations on public works that will do the public good in the long run.

Let’s hope it really is darkest before the dawn.

In closing: Enquiring minds really do want to know, What on earth was the Governor of Illinois thinking??; somebody spells out what actual Biblically based marriage would look like (hint, it isn’t pretty); Can Steve Jobs save GM?; a bunch of guys whose jobs depend on high college enrollment rates say that a college degree is vital (nope, no enlightened self-interest there); it may be that a Big Three bailout would primarily benefit former Treasury Secretary John Snow! (You remember, Mr. “A strong currency is hard to counterfeit“?); and cathouse.

It’s worse than that, really

A lot has been said today over the fact that the United States economy lost over half a million jobs in November, the job “creation” numbers since 1974. This brings the 2008 job loss figures to 1,900,000 and counting, almost 2/3 of that in the last 3 months. As alarming as these figures are, they don’t tell the whole story. First, as Dave Johnson points out, all those people who were classified as “contractors” didn’t count when the work went away. A couple more very sobering figures are pointed out by Robert Reich: the typical workweek has shrunk to 33.5 hours, the shortest since all those baby boomers got part time after school jobs; and the economy still needs 125,000 new jobs every month just to keep up with newcomers. Economists disagree on this exact figure — some say 150,000 and some even insist it’s more like 200,000.

So the actual unemployment number is a lot worse than will be reported. Not only are more people working fewer hours than since the Johnson Administration, more people are [not] working as “independent contractors”, and people who didn’t have a job won’t be getting one.

When you add the people who never were employed (125,000 x 11 = 1,375,000, I’ll use Mr. Reich’s conservative number) to the people whose jobs evaporated (1,900,000), our economy is short a minimum of 3.27 million jobs. This year alone. Not including December. Not counting the contractors. Not accounting for the people who are working part time who would like to be working full time.

No wonder 10% of homeowners are behind on the mortgage.

Here’s some bonus automotive items: the unions will give up the 85% pay they currently get while laid off (wouldn’t that be nice); Firedoglake on subsidies; maybe they can fix too big to fail by merging and being even bigger (aw gee, 3 failing companies made into one big failing company? How can it lose?); Carrie on modern electric cars; BradBlog asks about the EV-1; and I really wish I could find online yesterday’s interview of Mr. Nardelli by Maria Bartiromo. She verbally eviscerates him and his company.

In closing: maybe it’s a good idea to find out what real people want out of health care [insurance] reform; and In-laws in the [White] House!

Nail Gun Shorties

Just Say No…. to inferior drug tests that yield false positives. Yet another reason that random drug testing is a Bad Idea.

Back to the Future: As the economy continues to suck so badly we can no longer pretend it’s not already a recession, if not worse, some companies are reaching for the way-back machine to see if tried-and-true methods from the past might be the way to go right now.

Truckers don’t need sleep: at least thats what new proposed Federal regulations (that courts have struck down multiple times) say.

How many times do I have to say this? Insurance is not an investment! Your insurance agent is not a financial advisor! If he tells you he wants to sell you an “investment,” make him talk to your financial advisor (or toss him out of your living room). His job is to sell you insurance. When you buy something from an insurance agent, you should get regular statements telling you what you owe and/or how much what you have is worth. If you don’t get this regular statement, you should suspect that your insurance agent is a fraud.

Speaking of things that are not investments: Don’t buy stock in bankrupt companies. It’s a sucker’s game.

That’s not God talking: Listen, if “God” is telling you to ram another vehicle at 100 MPH, you need medication. Oh, and to get out from behind the wheel.

At a complete loss for Christmas ideas? You can donate farm animals to people in poor countries. It may not be fun to play with, but you might be doing good for an entire village.

A Prediction for GM’s Future: So, according to a colleague over at TMV, “Mulally is coming by car from Detroit. Wagoner will drive a Chevrolet Malibu hybrid sedan for the 520-mile trek. Nardelli won’t travel by corporate jet, but a spokeswoman declined to elaborate on his travel plans, citing security reasons.” First, Mulally and Wagoner never heard of car-pooling? They are going to and from almost identical places at exactly the same time! I bet they would save a seat for Nardelli, too! But in any event, I hereby predict that after Mr. Wagoner has driven a Malibu hybrid on a 520 mile roadtrip, there will be a lot of tweaks if not a complete re-design next model year.

What Maha Said: The “conscience” rule is trying to rise from the dead. Never mind reality. I am totally with her on that last line: “There is a simple solution to health-care workers with a ‘conscience’ problem — find another line of work.”

Speaking of Health Care: yet more proposals to “reform” medical residencies are too little too late. The problem is not residency. The problem is the $140,000 in student debt they have on average before they ever get to residency. Remember, internship and residency have been “employment” since the original Bush Administration. You regulate those with the Department of Labor.

And this person works at a university: I was reading along when I found something mind-blowingly stupid. Emphasis mine:

“We’re having to cut classes and professors,” says [Patricia] Hurley [financial aid director at Glendale Community College in California]. “Tuition will go up. And our outreach efforts to high schools and into the community are being hampered because we no longer have the financial resources. All this is happening at a time when it’s critical to get the word out that college is still affordable.”

So let me get this straight, services are going down, tuition is going up, financial aid is getting harder to come by, but we need to make sure everybody knows they can still afford college. Riiiiight.

Happy December, everybody!

A Serious Question for Black Friday

What is with you people? No, seriously, What Is With You People?

What bargain can possibly be so important that it is worth trampling a Wal-Mart employee to death?

Was it the Samsung 50″ Plasma HDTV? Maybe a Bissel Vaccum for $28? How about the Samsung 10.2 megapixel digital camera for $69? I’m pretty sure it wasn’t the $9 DVDs. It’s even more sad and absurd if it was over the DVDs.

Seriously? A human being died because of stupid cheap holiday bargains. Was it worth it? Do you actually like traffic and potentially dangerous crowds? Can none of you figure out Amazon.com? You know, you can buy gift certificates out of the Coinstar machine at the grocery store — at no charge — and not worry about having to use a credit card, right?

Shop Smart.

In closing: a couple items on the Citi bailout (remember, CitiGroup would not exist without Phil Gramm actually working to repeal Depression-era banking reforms); a nice group of items on exactly how much taxpayer money is being spent on bailouts, and what your personal share would be (I can think of better ways to spend it); Lies Conservatives Tell About Liberals; the economy sucks even worse if you are a woman; scientists can now at least predict how fast the ice sheets will melt; and ’tis the season to be charitable. Please remember Child’s Play this season. They help put toys and games in the hands of children in hospitals.

Thankfulness

I’d like to start with the other half of a story you may have seen today, the story of a man named Martin Gill. He took in two little boys one December just to have “a decent Christmas”:

A decent Christmas didn’t seem too much to ask. He said yes.

So that night, two small boys, one 4 years old and one 4 months old, came to Martin Gill’s home. The 4-year-old had on a dirty adult T-shirt and sneakers so small he wore them like flip-flops. Both boys were sick. The older boy’s medicine was unopened and expired, the baby’s barely touched.

The 4-year-old did not speak, and seemed mostly unresponsive. The only thing he cared about was changing, feeding, and taking care of his baby brother. Gill… quickly realized that this 4-year-old was the baby’s primary caretaker.

After about a month, the older boy finally began to talk. It quickly became clear that he had never seen a book, couldn’t distinguish letters from numbers, couldn’t identify colors, couldn’t count, couldn’t hold a pencil. At dinner time, he’d ask for more food at the start of the meal, hide it, and then sneak it into his bedroom because he was afraid it would run out. Gill… slowly got him to stop doing that by keeping plenty of food in the house and showing him at the start of meals that there was lots of food.

The boys have now been with Martin Gill… for four years. The experts and the judge have a lot to say about just how good that is. The kids have structured lives; they’ve lived in one place all four years, they eat meals together and talk (no TV or phones answered during meals), they go to school. They have friends. They have a family…. They have a grandmother. Gill even bought a Ford minivan.

The remarkable part of this story is that a court in the state of Florida said that finally, Mr. Gill and the grown-up love of his life can finally adopt these boys. You see, Mr. Gill and his partner are gay.

If you are at a loss for something to be thankful for, try the fact that this family can now work to make itself official.

In closing: things are tough all over (the world); a bill proposing single payer health care (true universal medicare for all, not mandatory health care) has been introduced; and Stupid CEO Tricks would be a whole lot funnier if we all hadn’t bought front row tickets.

Month-End and Other Tidbits

Wisdom of the Week: “You’re a smart lady” actually means “I am about to condescend to you, and say something completely unsupported, that I expect you to take on faith because I just told you how smart you are!”

A little bit of follow-up: Ford may sell the private jets. After all when you are grubbing for money, there are appearances to be maintained. Oh, and GM doesn’t see bankruptcy as an option.

A Trio on Health Care and Health Insurance: I am going to actively try to stop conflating the two, and I hope others will join me. Five Myths, Insurance companies are willing to cover everyone if and only if everyone is required to pay them regardless of what they choose to charge; and almost half of American doctors would get out of medicine if they could. Yeowch.

The economy: on the backdrop of the FDIC taking over 3 more banks (yeah you have a great weekend there, America!), President Elect Obama discusses how we can put out-of-work Americans to work building infrastructure we need, such as fixing our highways and building renewable energy resources!

The Past: It’s the 45th anniversary of the death of JFK. Oh, and the Vatican has chosen to forgive John Lennon for saying he was more popular than Jesus some 40 years ago. Way to go, there Vatican, forgiving somebody who has been dead for close to 30 years for something he said while he was very probably stoned. You are totally showing how “with it” and “hip” you are. How about getting off the high horse to feed some hungry and comfort the afflicted?

Retrospectacular, or some of my favorite November posts of the last five years: To the President on Tax “Reform”; on Investing; on the crappy economy we were pretending was great 5 years ago; on Why politics will always stink; on framing; and it’s hard to believe Call of Duty 4 has been out 2 years. Well, Call of Duty 5 (“World at War”) came out a couple weeks ago. If you nice people don’t mind, I have a Japanese Castle to storm.

Cars

A lot has been said over the last few days about the idea of bailing out the American automotive industry. I’m still having a really hard time getting around the idea of “why should we bail out a business that has been killed by bad management?” On the other hand, some of the problem is health care costs. But then again, why haven’t the CEOs and stockholders of the Big Three advocated a true universal healthcare system that couldhave fixed the problem a decade or more ago? But the gripping hand is: maybe they could try building quality cars in attractive, safe designs with good fuel efficiency and enough “giddyap” to be satisfying on the onramp (somehow, Honda and Volkswagen have that down, among others). Then there are the arguments “for” a bailout: if we don’t it could cause not just a recession but a full-on depression; nobody likes it but they’re “too big to fail” (which I still treat as “too big to be allowed to exist”); and my personal favorite, the automakers themselves think things will magically get better by 2010. I’ll gladly pay you Tuesday for a hamburger today!

The auto industry desperately needs several things. First, a break-up of big companies into a bunch of smaller players. Second, true universal health care. Third, to stop believing in magic and change their ways, including rejecting all the “we can’t do that!” thinking. Maybe they can study the Asian and European automakers and figure some things that work better than what they’ve been doing.

They could start by learning a few things from the 50 worst cars ever made.

In closing: Advice from Mr. Bush to Mr. Obama; a cheery Christmas thought, real (bad) retail sales; thanks to Ding for pointing out some people who really are pro-life, even the kind after birth; almost half of all primary care doctors would leave medicine if they thought they could; if you are stumped for Thanksgiving, here’s some side dish ideas; or perhaps you’d prefer cake in a mug.

Peace, be still. It’s Armistice Day.

Poppies

Picture — as you may have guessed — courtesy of FreeFoto.com.

Many people will be writing about Veterans Day today, also known as Armistice Day on the other side of “the pond”. Here is the official history according to the United States Army. Beleive it or not, there are some veterans of The Great War celebrating today. There are also veterans of World War 2, some of whom would like to forget but cannot.

I’ve been asked to say a few words particularly in support of our newest Veterans, the ones returning from Iraq and Afghanistan. There is an organization called Survivor Corps. They want to help the 1.5 million Americans who have come home, some of whom have obvious physical wounds and some of whom have subtle mental injuries which, left untreated, could have a terrible impact on their lives and families.

Hug a veteran. Pray for a soldier, sailor, or marine. Pray for peace.

In closing: Well if they can put their 10 Commandments over there, we can put our religious statue here!; the economy oversimplified; what to do with a dead car dealership; somebody else who would like to see the pro-life crowd support those who are actually living; back to work, you lazy woman, no college for you!; Duhpartment of Research finds that kids with severe arthritis don’t exercise much (couldn’t have anything to do with the pain, d’ya think?) and kids tend to eat like their parents (who incidentally buy the groceries); Supreme Court to decide whether the real life CSI investigators have to defend every lab test in court every time a test is used; it turns out that TSA checkpoint “family lines” work well; excuse me sir, is that a cheetah in your cargo hold?; thoughts on the election turnout; and things are tough all over in this mini-depression.