Transportation

The latest agreement to "help" the auto industry is not a "breakthrough" as described, but a fiasco that continues almost 40 years of incompetence and dereliction involving the automotive industry and America remaining on its knees to foreign oil. From the oil crisis of the early 1970s what was needed, on autos specifically and energy generally, was clear. Since then Democrats have failed, Republicans have failed, presidents have failed and Congresses have failed. Only Jimmy Carter made a real effort, and he lacked the clout to make it happen.

And now it continues with a fiasco that provides little more than $15 billion for auto companies, which will barely last weeks, and takes the money away from the most urgent mission, making cars of the future that will sell, that affects generations. If we are talking about only $15 billion, Obama should have called Treasury Secretary Henry Paulson and said: "I want this and I want it now.” Instead, Paulson and Fed Chairman Ben Bernanke stiffed the Congress and refused to testify. The chairmen of the House and Senate committees should have told Paulson and Bernanke that they would get subpoenas within hours if they refused to do their job and deal with Congress. Read more...

Time and again we hear the same infuriating argument — words to the effect that “even though the [fill in the blank] industry has been grossly mismanaged by greedy incompetents, we have no choice but to feed them billions upon billions in public money. If we don't, everything will collapse. If they go under, we all go under."

Sound familiar? Of course it does. Now we're hearing this broken record about the broken economy from the suddenly humble U.S. auto industry executives. Like massive tapeworms, they've managed to burrow into our society. In this case, they have become so embedded, they are essential even as they sap our strength. Read more...

When the Soviets shut off all land routes to Berlin after the close of World War II, there were many bright people who said expending a huge effort to save a few million hungry Berliners would be a waste. The denizens of Berlin had started this war, and were we to let the few there in Berlin who believed in democracy lose, it would give us a better chance to protect democracies elsewhere.

Those people were wrong. The Berlin Airlift was us proving to the world and to ourselves that there is no challenge so great that it can overwhelm the combination of American effort and American ingenuity. Read more...

Let's build a patriot car within five years that moves into the 21st century with leapfrogging technology, historic gains in fuel efficiency, new standards of automotive excellence, a new spirit of national confidence, a plan that will be profitable for taxpayers and sales that will rise across our nation and in global markets from China to India with exploding demand for autos that will last for generations.

It would be unnecessary, catastrophic and wrong to follow the course of defeatism and pessimism. Bankruptcy would be a disaster and lead to cascading failures from the auto suppliers, which would also be driven to failure, and banks, which would find more loans not repaid, adding a disaster upon a disaster if auto companies go bankrupt. Read more...

Hey, Friday night, I saw Shai Agassi talking about what looks like very serious infrastructure for electric cars. His approach and company BetterPlace.com have plans for electric cars and what it takes to make it real.

Summary from DeutscheBank: Project Better Place's approach has "the potential to eliminate the gasoline engine altogether."

Looks like this has been vetted and has convinced the governments of Denmark, Israel and the state of California. Read more...

We face here today a cultural sea change. Volvo-driving liberal senators who have not driven an American car since their fathers taught them how to drive in ’52 Chevies with three on the column and brakes you had to begin to apply a block before negotiating the turn, are in a panic to pour money into Detroit. It would be a done deal already if Mitt Romney, who knows something about cars and about Detroit, hadn’t spoken up last Tuesday in a New York Times op-ed saying the car manufacturers would have a better chance of recovery if they were allowed to go bankrupt. Read more...

Republicans, still smarting and searching for leadership in a leaderless party, should take a look at Mitt Romney's latest flip-flop. Sure, bailouts are unpopular with Republican voters, and most voters across the spectrum these days. So Romney, as you may have seen, penned an editorial in The New York Times opposing a federal rescue for Detroit.

"If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the automotive industry goodbye. It won't go overnight, but its demise will be virtually guaranteed," wrote Romney. "Don't ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost." Read more...

In order to preserve labor peace over the post-war period, the Big Three have entered into a Faustian bargain with the United Auto Workers (UAW).

In addition to paying above-market wages, management agreed to a number of very expensive benefit programs. These programs include employee medical, retiree medical, rich pension benefits and a program to pay redundant employees not to work. Read more...

The talk of a bailout for the American automobile manufacturers reminds me of the decision by the United States Olympic Committee to start using professional basketball players in the early ’90s.


Let me explain.


During much of the Cold War, basketball was the one sport that America clearly dominated. That was true up until 1972, when the Soviet Union team beat the American squad in a contested and controversial game. Read more...

This has an Alice in Wonderland feel to me.

Billions and billions of dollars going to cover “paper” — Wall Street meltdowns, insurance companies like AIG that I don’t even understand (how could you possible give them $150 billion — for what?), banks that aren’t banks, loans that aren’t loans, changing the rules every day and what qualifies for help and what doesn’t.

Meanwhile, we have our No. 1 manufacturing base — the auto industry — about to go under. Mind you, about to decimate our economy more than we can imagine. Here are just some facts that should raise the hair on the back of all our necks: Read more...