Bailing out the Big Three

The topic of the week is whether or not the federal government should bail out the Big Three American car companies. If it doesn't, there are a number of foreign car companies poised to step in. Megan McArdle tries really hard not to be a heartless libertarian. Turning whimsical (complete with Tom Lehrer videos!), she proposes bailing out journalism, of which group she is one. She also proposes an analogy with the film industry (she's from upstate New York, home of Eastman Kodak). The problem with this analogy is that film was rendered irrelevant by a new technology - digital cameras - that didn't use film. Nothing is going to be replacing cars any time soon.

Thomas Friedman takes a few blasts, not only at the management of the Big Three, but at the entire Michigan Congressional delegation, for their mistakes. Then he admits that he's terrified of what would happen if GM actually declared bankruptcy. As are most people.

I have a complicated view of this. As a Democrat, I would normally be defending the union, but I've heard enough to know that the UAW made sure that they were taken care of really well when times were good, and unwinding that legacy has been, and will be, a big part of the problem.

But can you blame the union for making sure they got theirs? They got what they could out of their negotiating partners. They demanded, and got, great pay and benefits because that's what the companies could afford to pay them. There's a reason some Detroiters refer to as GM "Generous Mother." Friedman grudgingly admits that something is going to have to be done, but demands conditions. Which I think the Big Three are going to have to agree to. The UAW is not quite as agreeable, as they feel that they have been paying the price for a long time. They're right. The Big Three have been downsizing for years.

In a sense, that's a good thing. A lot of the hardest work has already been done.
That's one of the reasons I support a bailout (with conditions). The Big Three have already offered a chunk of people buyouts. They've already written massive losses. They've done some of the necessary restructuring - GM killed Oldsmobile a few years ago. Ford sold Jaguar. Chrysler killed off Plymouth. The current recession will force the closure of some unnecessary dealerships. There will be a great deal of pain. There already has been a great deal of pain.

Politically, I can't believe the Republicans are opposing this. I understand that most of them opposed the Wall Street bailout as well, but it ain't going to play well in Peoria to write a check for $700 billion to white guys in suits, but deny a fraction of that amount to blue collar workers in the Midwest. Obama did very well in the Rust Belt this year. If the Republicans really oppose this bailout, they can pretty much write off Michigan and her neighbors for a long time.

I'm not a fan of nostalgia in politics, but this is, in some respects, deeply personal for me. My family history is deeply intertwined with that of the American car industry, going way, way back. On my mother's side, one of my great-grandfathers was the construction foreman on Henry Ford's mansion. My paternal grandfather only finished eighth grade, but went to trade school at Ford, became an engineer, and eventually ran his own tool and die shop. His roommate in the 20's was a man named Walter Reuther, who was president of the UAW for 24 years, and one of the most important labor leaders of the 20th century. My grandfather hated unions, but he always told us that Walter Reuther was the most honest man he had ever known (and one of the cheapest - Walter didn't like paying for gas, so they would double-date, and my grandfather would always drive).

Someone in my extended family has worked either directly for one of the Big Three, or for a supplier, for decades. My father got his undergraduate degree in mechanical engineering from General Motors Institute (now Kettering University). I have a cousin who currently does PR for Chrysler. I have an uncle who tried to change GM from the inside for many years. So I'm not a fan of nostalgia in politics, but I can't help but be nostalgic about the American car industry.

Economically, it would be a catastrophe of the first order to let the Big Three go under. I hope and pray that no one demands that they declare Chapter 11, because that could very easily lead to Chapter 7. Ron Gettelfinger, president of the UAW, explained the problem this morning on NPR: would you buy a car from a bankrupt car company? Many people wouldn't, so Chapter 11 could very easily be the beginning of a death spiral. The people affected wouldn't just be the workers and their families - the ancillary effects would be felt by their suppliers, and many other companies who serve the populations of Michigan, Ohio, Indiana, etc.

Apart from the hardheaded economics, I think the most important reason to save the Big Three (or Big Two, if GM takes over Chrysler) is one that I have to admit borders on nostalgia: to let the Big Three go under would be an admission of failure on the part of this country as a whole. We have already seen many industries leave for other shores, and each loss has a certain poignancy, but nothing compares to the importance of the car industry, on many levels. Sure, we've all had "Kodak moments" shot on Kodak film, but I don't notice a much of a difference when it's captured by a CCD instead of 35mm (motion picture film excepted, for all my DP friends).

In purely romantic terms, there is a sizable piece of American history carried in the icons known as the Corvette, the Mustang, and the Jeep, among others.

I'm not advocating spending billions of dollars on preserving sheet metal memories. I'm a romantic, but I don't like using nostalgia to save doomed projects.

What I am advocating spending billions of dollars on preserving is the incredible insfrastructure - physical, corporate, industrial, cultural, intellectual, and even artistic - that the Big Three represent. Unwinding the Big Three would cost billions, just for dealing with car dealerships. The psychic cost would be staggering. But I'm not advocating a $25 billion Xanax.

Millions of people have put incalculable amounts of blood sweat and tears into the Big Three. There is still an incredible amount of brainpower and willpower in those companies. I'm not sure whether or not current management is up to the task of saving these companies. I'm perfectly willing to see the boards all tossed. In fact, I have a suggestion for someone who should be on the GM board: Dan Neil, the car critic for the LA Times. As a critic, he has intimate knowledge of pretty much the entire range of the automotive market. He's the only automotive critic to win the Pulitzer Prize for criticism. He knows the issues backwards and forwards, and he can explain them extraordinarily well, and usually with a fair amount of humor. He could rally the troops inside GM, and set for them the standards they know they are capable of meeting.

I don't know who else I would nominate for any of these boards, besides my uncle, Len Allgaier. I spent many a Thanksgiving listening to him explain to me what exactly was wrong with GM. He's been retired for a few years, and I'm not sure how my Aunt Gwenne would feel about it, but I think he would jump at the chance.

There are many people like my Uncle Len. There are many people who have lots of ideas about how to fix the Big Three. And there are lots of people who are running the Big Three who have been ignoring those voices of dissent for years. There is a lot of deadwood in Detroit. There are a lot of people who are terrified of change, or in denial, or who still cling to that idiotic idea that Americans should buy American cars. I believe that Americans should buy American cars when Americans make great cars for Americans. But I also happen to believe that that is still possible.

Actually, I'm pretty sure my Aunt Gwenne, the daughter of a man who lived with Walter Reuther and started his own tool and die shop, would love to see her husband go back to work fixing GM. It would be the fulfillment of a dream; the culmination of a lifetime of work. It would give him something to fight for, something to believe in.

There are many people like my Uncle Len, and many people like my Aunt Gwenne, people who love solving big, huge, impossible problems. Problems like putting a man on the moon, or putting a black man in the Oval Office a very short time after the civil rights movement flourished.
This is why I believe we should try to save the American car industry. Not because we should. But because we can.

Obama did well in Birmingham, MI

Stanley Greenberg, long-time Democratic pollster, visited Macomb County, Michigan, home of the "Reagan Democrats," after this election. In 1984, Reagan won the county by 2-to-1, but Obama won it by eight points this time around. That's progress.

But what's more interest to Greenberg, for professional reasons, and to me, for personal reasons, is what happened next door, in Oakland County. That's where my parents have lived for almost 30 years. When I went to high school there, it was solidly Republican (although my teachers were pretty liberal).

Oakland County voted for Obama, 57% to 42%. That's technically a landslide (the technical definition of a landslide in an election is a winning margin of at least 10%). Considering how Republican I always thot Oakland County was, it's a blowout.

Greenberg specifically cites Birmingham and Bloomfield as areas where Obama did well. I'm not surprised. The people in Birmingham are good people. They don't like paying high taxes, but they know lots of gay people, or at least some, they're well-educated, and usually well-traveled. They understand that being a professional requires the ability to think, to listen, to analyze problems, and to be able to admit that you're wrong.

My Dad is the quintessential Oakland County Republican. Fiscally conservative but socially moderate, he doesn't vote for Democrats very often. But he's been impressed with Obama since the primaries. He was appalled at the choice of Sarah Palin for VP. He was part of Obama's 96,000 vote margin of victory in Oakland County. Another famous Michigander, Ted Nugent, has declared war on moderate Republicans. Good luck with that, Mr. Nugent. All of those RINO's (Republicans In Name Only) that he's suddenly so upset about are exercising that freedom that conservatives are so passionate about defending and claiming as their own unique virtue.

One key part of being free, of course, is having the freedom to fail. But with that freedom to fail comes the responsibility to accept responsibility for your failures. Good luck with that one, too, Mr. Nugent. My Dad's a big fan of rock and roll from the 1950's, but I don't think he could recognize a single Ted Nugent song. And he sure isn't going to start listening to him now.

Elly Peterson

The NY Times had an obituary earlier this week about a woman named Elly Peterson, who was a moderate Republican from Michigan. She's one of those women who had talents that didn't match the opportunities available to her at the time she lived. She was apparently quite an organizer. She started out as a secretary for the Michigan Republican party, and six years later was the assistant chairwoman of the national party. Unfortunately, that was as far as she could go, because she was a woman. But she did run for Senate on her own. Also unfortunately, she ran in 1964, which was a terrible year for Republicans, and lost.

She's a great example of a time when there really were moderates in the Republican party. Try to imagine someone from the GOP doing this today:

Outgoing and energetic, she proved to be a superb saleswoman for the party, whose reach she tried to extend to new constituencies. In Detroit and other cities, for example, she established party offices and service centers in black neighborhoods.

A white Republican woman in the era of Leave it to Beaver doing outreach in Detroit. That's gutsy. It's not inconceivable for me; my grandfather, who was a lawyer in Michigan, Ohio, and Illinois, was a similar kind of moderate Republican - he was, so my mother tells me, a member of the Urban League. I like to think that maybe my grandparents knew this woman.

Equally fascinating is her passion for feminism; she campaigned for the ERA. I can only imagine her disillusionment with the current state of the Republican party. I do know, however, that she was disappointed in it. This year, she supported Hillary. A woman of principles to the end.

We have resolution of the peninsula-state problem

The problem of what to do with the Democratic delegates from Michigan and Florida has been resolved.

The committee agreed on a compromise offered by the Michigan Democratic Party that would split the difference, allowing Clinton to take 69 delegates and Obama 59. Each delegate would get half a vote at the convention in Denver this summer, according to the deal.

They also agreed to seat the Florida delegation based on the outcome of the January primary, with 105 pledged delegates for Clinton and 67 for Obama, but with each delegate getting half a vote as a penalty.

The resolution increased the number of delegates needed to clinch the nomination to 2,118, leaving Obama 66 delegates short but still within striking distance after the three final primaries are held in the next three days.

So this should be wrapped up by Wednesday at the latest.

The problem for the Hillary campaign is that they were trying to win this by argument, but this is not something that can really be won by argument. This is not a court of law. Each side signed the same contract, and agreed to play by the rules. People in just about every state have voted. The team with the better strategy and more money won. The team that started out with every possible advantage - more money at the start, more superdelegates for most of the campaign, a former President intimately involved - lost. The contest was fair. On to the general election.

Obama and Michigan

I haven't followed the fine details of the Democratic primary debacle in Michigan. Sam Stein at HuffPost has a good rundown. One detail I didn't know: Obama didn't actually put his name on the ballot. His name was put on by people in the state of Michigan, along with all of the other candidates. He did take his name off, but he did that along with John Edwards, Joe Biden, and Bill Richardson. At the end of the day, the decision to go ahead with the primary in violation of the DNC rules was a decision made by people in Michigan, and Obama had essentially nothing to do with it. At the end of the day, a compromise will be reached, and the people in Michigan will make a decision that is in the best interest of the Democrats in Michigan and the Democratic party in the entire country. Which interests, at this point, do not necessarily coincide with the interests of the Clintons.

Get the party started!

From Michigan Liberal, a bit of wisdom for the day:

This big news, former Sen. John Edwards’ endorsement of Sen. Barack Obama for President of the United States, signals what philgoblue of WestMichiganRising said to me right after the rally: “I think the general election started in Grand Rapids today.” He’s right.

Josh Marshall's take:

We seem to have arrived at an equitable compromise: Sen. Clinton is staying in the nomination race while Sen. Obama drops out to move on to the general.

And, of course, the Democratic Party is quickly unifying around Obama. He's picking up ever more endorsements, from superdelegates, elected officials, and unions. The longer this goes on, the more of a foregone conclusion it is that Hillary has to concede. Which means that it will that much sadder when she actually does.

College Democrats endorse Obama!

The College Democrats of America have endorsed Barack Obama for president. This is not even remotely surprising, given that most young people are voting for Obama. Normally I wouldn't post about one endorsement, but I like this particular announcement because the President of the College Democrats, Lauren Wolfe, who is a delegate, is from Royal Oak, Michigan, where I lived for about a year. It's not a big place, but it's very cool, and quite hip. One memory of Royal Oak that I have is walking past an independent record store and seeing an unusual album cover plastered all over the window. It was a picture of a naked baby swimming, and reaching for a dollar bill. I remember thinking, "Hmmm, must be some hot new album from a band that I've never heard of." Of course, it was Nevermind, by Nirvana, and went on to sell 10 million albums.

But I digress. I'm pretty sure that record store is long gone, but I learned a good lesson there about noticing details and the importance paying attention to certain key cultural signifiers, like the windows of independent record stores. I think they even sold the album on vinyl.

But I digress again. So that is Royal Oak, Michigan, where Lauren Wolfe is from. Of course, since she's from Michigan, it's questionable whether or not she will be able to vote, since it's not clear whether or not the Michigan delegation will be seated.

My guess is that they will be. Somehow or other, they will be part of the party for the Party. Everyone will be having a good time in Denver, including the people from the insular peninsula states.

Hillary disses Michigan

Looks like the Hillary Clinton campaign is determined to make every last mistake possible as the primary season winds down. Today we learn that:

Michigan Democratic leaders settled today on a plan to give presidential candidate Hillary Rodham Clinton 69 delegates and Barack Obama 59 as a way to get the delegates seated at the national convention

. . .

The plan would shrink Clinton’s delegate edge in Michigan from 18 to 10 and allow the state’s 157 delegates and superdelegates to be seated at the convention.

Note that while this is not good news for Hillary (she loses 8 delegates), it's good news for Michigan Democrats. They have apparently realized that they made a mistake pushing their primary early, accepted the consequences, and are moving on. But their interests are now divergent from Hillary's interests. The goals of the people in Michigan are to have their delegates seated at the convention, unify behind the Democratic nominee so he can get started campaigning against McCain, and stop wasting their time on this. Supporting Hillary is no longer in their best interests. Not only is it not in their best interests, it's not in their interests at all. Why do they care about Hillary's campaign any more? They don't. It seems like Michigan Dems agree on this:

The 69-59 split was proposed last week by four prominent Michigan Democrats who have been working for months to find a way to get Michigan’s delegates seated at the Aug. 25-28 convention in Denver: U.S. Rep. Carolyn Cheeks Kilpatrick, United Auto Workers President Ron Gettelfinger, U.S. Sen. Carl Levin and DNC member Debbie Dingell.

If there is a national representative of white working class voters in the heartland, it would be the president of the UAW. Carolyn Cheeks Kilpatrick is Chairwoman of the Congressional Black Caucus and mother of the current Mayor of Detroit, Kwame Kilpatrick. Debbie Dingell is married to John Dingell, Dean of the House of Representatives, and very close to the car companies. Carl Levin is the longest serving Senator in Michigan history. They represent just about every possible Democratic constituency in Michigan, with the exception of the Arab American community, and I'm guessing they all have strong connections with them. If the four of them have made a decision, the state of Michigan has made a decision. Game over.

But, according to Talking Points Memo, the Hillary campaign has not signed on:

"This proposal does not honor the 600,000 votes that were cast in Michigan's January primary. Those votes must be counted."

Guess what, folks. If those four people listed above agree that this is a good plan to have Michigan's delegates seated at the Democratic National Convention, damn well near all of those 600,000 people agree that this is a good plan to have Michigan's delegates seated at the Democratic National Convention. Those votes are now being counted.

The Obama campaign, on the other hand, is taking advantage of its frontrunner position to be diplomatic.

Obama spokesman Bill Burton said of the decision, “It is clear results in January won’t be used to allocate delegates, and we agree with that decision. We have been talking with Michigan leaders about this proposal and will continue to do so.”

That's something you're supposed to include in most statements to the press about anything involving sensitive negotiations: your own willingness to continue engaging in dialogue. Be nice, and people will be nice to you. Or at least pretend to be nice, and they will pretend to be nice to you. And then if an opportunity comes along when you actually can be nice, guess what? You're already halfway there.

This is a great illustration of why Hillary lost: she puts her interests above everybody else's, even when it is very clear that she has lost, and when it is very clear that her close allies and/or powerful Democrats have made a decision that is contrary to her wishes. The Hilary Clinton campaign does not speak for the voters in Michigan. Elected representatives and people with huge constituencies in Michigan speak for the people of Michigan.

I was born and raised in Michigan. My parents were born and raised in Michigan. Three of my grandparents were born and raised in Michigan. Most of my aunts and uncles and cousins were born and raised in Michigan. I think I have a clue how people in Michigan thinks on this kind of issue.

OK, all my fans in Michigan, back me up on this one.

Michigan and Florida - geography is destiny

Has anyone noticed that the two states that got themselves into trouble for breaking the rules, Michigan and Florida, are both peninsulas? Maybe they both feel very isolated from the rest of the states.