GM, Mark of Failure

My first car was a 1968 Oldsmobile Delta 88. Rocket-455 V-8 engine (bigger than the one in a Hummer H3). 10 MPG city, 15 highway. (Cost of a gallon of gasoline when I had the car – about US$0.89). The car has a special place in my memory not only for that reason, but because it was my grandmother's car. Shortly after she'd bought it, she took me on its maiden voyage. We took a road trip, just her and I, to Quebec City. I was in charge of reading maps. I sucked at it. Instead of hitting the brand-new, high-speed four-laner, I mistakenly guided us to slower but much more scenic back roads, some of which ran parallel to the new highway. We stayed at the historic Chateau Frontenac. We walked around the charming old section of the town. I tasted Veal Cordon Bleu (the real deal) for the first time. I watched an episode of Lost In Space which had been dubbed in French. Nothing like watching Dr. Smith cower before an alien-possessed Will Robinson and grovel for his life in a language which I would not study until I began high school that fall.

My grandmother kept the car until the late 70's when my parents drove it up from Florida. My younger brother got it a few years later. He drove it until the mid-1980's, when it was handed down to me. It had its issues, as you would expect with a four-owner car, everything from occasional funny noises at certain speeds to refusing to start on winter mornings without radical intervention when the temperature went below freezing (read:squirting starting fluid into its carburetor and begging jump starts from passers-by). Nonetheless, for a car its age, it delivered stellar performance. Despite worn springs it had the rock-steady ride of the massive cars of that era. It got worse mileage than a modern SUV, but it had the kind of styling and grace that today's butt-ugly iron-box-on-wheels monstrosities don't. It was easy to fix, which was a good thing because it needed a lot of fixing. Its cracked and crazed paint looked like soil after a long drought but the body was thick steel; fender rot didn't set in until very late in the game. It looked beat-up on the inside, bit it was comfortable. Decrepit though it was, it accelerated on a nanosecond's notice. Passing cars was a piece of cake. It laughed at steep uphill grades. It met an untimely demise in 1991 when, while parked on the street, it was crashed into by someone driving another Oldsmobile - same model, same color, and exactly 10 years newer than my car (cue music: theme from Twilight Zone).

They definitely don't make 'em like they used to.

They can't make 'em like they used to. Economic realities, technological advances, safety requirements and fuel-efficiency laws long ago sent the classic 1960's road-whale the way of the rumble seat and the 8-track tape player. They won't make 'em like they used to. The taken-for-granted reliability of American cars started going downhill in the 1970's. “Buy American” has a nice ring to it. Expensive monthly repairs and frequent product recalls don't. Outsourcing to slave-wage nations and further aggravated the situation.

So now, the company which symbolized American industry for so many years - no, decades - which built my first car, which powered an economy and changed peoples' travel habits forever, is in bankruptcy.

So who's to blame? The Japanese? Well yes, but not for the reasons you might think. They simply made cars with far better reliability than Detroit. Detroit lobbied congress to have tariffs placed on import vehicles. This, they thought, would cement their place in the U.S. Car market. Except that people continued to prefer the Japanese and European cars, even with the stiff tariffs. That should have been a wake up call for GM, Chrysler and Ford, but they apparently chose to ignore it. The imperious, egotistical and stunningly ignorant businessmen who ran the American auto industry into the ditch brought this situation upon not only themselves but all Americans.

Now our government is in the car business whether we like it or not. And I don't think I do. Trouble is, if we need tanks, troop carriers and engines for aircraft carriers, we can't exactly outsource that. The reason we won the second world war so handily is because our industries were up to the task. So the too-big-to-fail GM gets bailed out and Chrysler gets bailed out, for a second time, with taxpayer dollars. This despite years of both firms exporting American jobs to Mexico, China or anyplace else where people work for a daily wage that would get you an order of fast-food French fries here (doubtlessly served up by former autoworkers). The smaller businesses which have gone under or have laid off thousands of family breadwinners never get that kind of treatment. The poor slobs who have been watching their unemployment benefits or lifetime welfare benefit quota get used up don't get that kind of treatment.

To president Obama's credit, he didn't just unconditionally toss cash at these corporate behemoths as the previous administration had a habit of doing. But it still burns my grits that these few big companies in a few towns get a bailout while small business operators watch their livelihoods dry up and blow away.

Yes we can! (Can't we?)

Are you among those of us who think that Barack Obama isn't quite getting the “hope” thing right? I mean, health care “reform” that leaves insurance companies in the drivers' seat? Financial “reforms” that seem to be merely cosmetic? Environmental “reforms” that do almost nothing to address the issue of human survival?

Barack Obama is no way the surrender monkey that Bill "NAFTA" Clinton was. But why does it seem that the man who represents our first, best shot at real reform in far too long might be too willing to compromise with the people who made the mess that we're in? For the answers to these and other questions, I'll turn over the floor to our greatest stand-up political analyst, Mr. Bill Maher.

Good News and Bad News

Photo creative-commons Wikimedia.

My friend Niles is a railroad buff. He’s constantly collecting books and magazine articles about railroading history, and is a co-author of this post.

Recently, he found an issue of Trains magazine from May 1972 that had an interesting article by George W.Hilton called "The view of the viaduct from in front of the diner", recounting a rather odd incident on the Erie-Lackawanna Railroad in 1961.

According to Hilton's account, a westbound Erie-Lackawanna train from New York to Chicago, which he was on at the time, stopped at Hornell, NY, about an hour west of Corning, where things got interesting. Not even half a minute had passed since the train left the station to continue on its way when the engineer suddenly saw that just ahead was an eastbound freight train about to enter the main line at a nearby junction, which meant that his passenger train would be right in its path. Not a happy situation, to be sure. The engineer realized that if he jammed on his brakes right away, the freight would hit one of his head-end cars (the closed cars up at the front, for baggage or freight) and miss his single passenger coach, which was the last car on the train. As it turned out, one of the head-end cars was in fact hit by the freight locomotive, and the other cars derailed, but the passenger car stayed on the rails, apparently safe and sound. When the dust cleared, Hilton got up and jumped from the rear doorway of the coach.

Here’s where the story gets interesting. Hilton writes:

"What seemed odd to me was that two soldiers were running around,
obviously in some agitation, with their rifles over their shoulders
and otherwise ready for action. I hadn't seen them previously... From
where had these soldiers come, and why did they appear in such distress?”

It turned out that the freight car which had been hit had been carrying nuclear weapons. The soldiers were responsible for guarding them. The railroad very wisely called up the Atomic Energy Commission (or AEC, forerunner of the present-day Nuclear Regulatory Commission), who had good news and bad news for them. The good news was that no nuclear components were on board. Those were shipped separately through other channels. The bad news was that since all nuclear weapons contain a fairly powerful conventional-explosive detonator, there was some risk of a fairly big bang. The AEC cautioned the railroad against building a temporary bypass or “shoo-fly” track around the wreck to let other trains pass until a safety engineer could be flown in from Washington to oversee the safe removal of the detonators.

I think that the incident depicted in this article is a great metaphor for the fiscal train wreck we’re now witnessing on Wall Street. The safety engineers, Mr. Bernanke and Mr Paulson are recommending a taxpayer-financed three-quarters-of-a-trillion-dollar “shoofly” (the much-talked-about bailout which as of this writing is still not a done deal) for the criminally-mismanaged firms which ran the train off the track in the first place. The porter, Mr. Bush, is trying to reassure the passengers that everything is under control and there’s no reason to panic. Meanwhile, no one knows, or will say how big the explosion from the damaged lead freight car will be, a recessionary fizzle or a 1929-style Armageddon.

April 15th is just around the corner!

"Only little people pay taxes!"
- attributed to Leona Helmsley












Is this what Adam Smith had in mind as the founder of capitalism?

The following are passages from Susie Bright's blog:

... Jimmy [Cayne] is the disgraced former Bear Stearns CEO whose company went kablooey this week, but which was saved by a bailout the Feds engineered with... our tax dollars.

Funny, I was just working on my taxes. Also this week, twenty thousand California teachers got their pink slips, taking our state to the the absolute bottom in public education spending.

But Jimmy and the other Bear Stearns blowhards need my money more.

Jimmy just closed a deal on a twin set of adjacent apartments at the famous Plaza Hotel (home of Eloise!) for $28.24 million.

Altogether, Jimmy and wife will have 6,000 square feet at the Plaza, plus room service, maid service, a concierge, and stunning views of Central Park. I'm so glad everything is working out for them!...

And after all, it's these people's fault that their fortunes went up in smoke, just as it is to Jimmy Cayne's credit that he's found a golden parachute. Right. ...

Read the whole thing here.

(And remember, since Ms. Bright's usual journalistic beat is sex vis a vis politics, this link may not be work-safe).

Why there is no hope, September 12th 2007 Edition

There's a man whose name you need to know: James Howard Kunstler.

Mr. Kunstler writes, and writes very clearly and articulately, about economics, architecture, suburban sprawl and some kind of liberal nonsense called "peak oil" in a blog called "Clusterfuck Nation". (That's clusterfuck as in "very bad turn of events", not as in "group sex".) From the biography on his site:

" James Howard Kunstler says he wrote The Geography of Nowhere, "Because I believe a lot of people share my feelings about the tragic landscape of highway strips, parking lots, housing tracts, mega-malls, junked cities, and ravaged countryside that makes up the everyday environment where most Americans live and work.""

One of Mr. Kunstler's frequently-made points is that we are as a nation headed for what the elder George Bush once referred to as "deep doo-doo". His exquisitely no-nonsense essays on our culture, our politics and especially our economy, delivered at the rate of one every Monday, are all worthwhile reading for anyone who suspects that things are a bit different than what we see on the news and that maybe we just might not be living in the Best of All Possible Worlds®. One in particular, written just two years ago, had a significant impact upon me me, kind of like a two-by-four upside the head. It is this one. Check out this excerpt:

"Americans were once a brave and forward-looking people, willing to face the facts, willing to work hard, to acknowledge the common good and contribute to it, willing to make difficult choices. We've become a nation of overfed clowns and crybabies, afraid of the truth, indifferent to the common good, hardly even a common culture, selfish, belligerent, narcissistic whiners seeking every means possible to live outside a reality-based community.

These are the consequences of a value system that puts comfort, convenience, and leisure above all other considerations. These are not enough to hold a civilization together. We've signed off on all other values since the end of World War Two. Our great victory over manifest evil half a century ago was such a triumph that we have effectively - and incrementally - excused ourselves from all other duties, obligations and responsibilities.

Which is exactly why we have come to refer to ourselves as consumers. That's what we call ourselves on TV, in the newspapers, in the legislatures. Consumers. What a degrading label for people who used to be citizens."

Is this guy on the mark, or full of beans? Why not read the rest of it, and his other essays, and see what you think?