Posted Wednesday, Dec. 10, 2008, at 2:34 PM
Time to call a meeting of UAW defenders to sort out kinks in the party line. The NYT , blaming Republicans for the bailout deal's Thursday collapse , writes:
After Senate Republicans balked at supporting a $14 billion auto rescue plan approved by the House on Wednesday, negotiators worked late into Thursday evening to broker a deal, but deadlocked over Republican demands for steep cuts in pay and benefits by the United Automobile Workers union in 2009. ...
The automakers would also have been required to cut wages and benefits to match the average hourly wage and benefits of Nissan, Toyota and Honda employees in the United States.
It was over this proposal that the talks ultimately deadlocked with Republicans demanding that the automakers meet that goal by a certain date in 2009 and Democrats and the union urging a deadline in 2011 when the U.A.W. contract expires. [E.A.]
But wait a minute--didn't I read somewhere the claim that the UAW shouldn't be blamed because its labor costs were already competitive with Honda and Toyota? Yes, I did!
The leaders of General Motors Corp. and the United Auto Workers union told Congress this week that a new union contract will virtually erase the labour cost gap between GM and foreign competitors with U.S. factories. [Nov. 19, 2008]
If the gap had already been "virtually" erased, how could the cuts required to close whatever gap remained have been "steep"? ... 12:49 A.M.
Thursday, December 11, 2008
Hierarchy Recalibration! Let the record show that Rod Blagojevich, sitting governor of Illinois, the fifth largest state in the union, was apparently willing to sell a U.S. Senate seat and his soul, and abandon his office , for a job paying less money ( $250,000-$300,000 ) than is made by several hosts on National Public Radio . ... Randy Newman , call your office. ... 3:14 P.M.
The Trouble With the Bailout Deal: Here's the key passage from the briefing on the bailout "deal":
Now, how does the process work? It was very important to us that there be--that this President's designee [the "auto czar"] have sticks, leverage, to make sure that all these stakeholders who are participating in the process of negotiations have a very strong incentive to make the deep and meaningful concessions that will be necessary for these companies to become viable over the long term. So there are a number of sticks. The first is, if these companies do not arrive in the negotiations at a plan that meets the test for long-term viability, that bridge financing shall be called by the President's designee. That means we get paid back at the end of the period .
The period is until March 31st, or April 30th if the Presidenti's designee want to grant a one-time, 30-day extension because they're making progress and there's likelihood of success. So at the end of that period, if there's not a plan that makes these firms viable, the government gets its money back.
Now, remember what I sad at the outset that this is a bridge to either fundamental restructuring or bankruptcy. They either have a long term plan that's viable, or we get our money back. And if we call our money back, which is required under this bill, then those firms are not going to be able to survive. That is a real incentive and a real stick for this President's designee to ensure that the stakeholders all across the board make the concessions that are necessary. [E.A.]
OK. Might work! But some questions: 1) How is the government going to "get its money back" if the money has been spent and the firms are bankrupt? Only by liquidation, it would seem. So does the bailout deal eliminate the option of restructuring (as an ongoing enterprise) under the aegis of the bankruptcy court? Either the firms are saved under the "czar," or they are liquidated, apparently. 2) The big "stick" is to kill the firms, then. Isn't that too big a stick? Like a nuclear weapon is too big a stick? Come April 29th, if the choice is to approve a half-assed "restructuring" plan that has maybe a 35% chance of succeeding, or to kill General Motors, there's going to be an awful lot of pressure not to kill General Motors, no? The threat is so big it pressures the auto czar, not the executives, investors and union members. What's needed is an intermediate threat that's more credible. How about empowering the auto czar to declare the companies' labor contracts null and void? And to indefinitely delay payment of all executive salaries and bonuses? That would get the "stakeholders" attention, maybe. 3) Shouldn't there be a different "czar" for each firm? Having a single czar for the whole industry muffles what might be salutary competitive pressures. Maybe Chrysler's workers are so desperate they'll give up more in terms of pay and work rules than Ford's workers. Shouldn't that sort of choice be encouraged? Dueling "czars" would encourage this viability-enhancing reverse solidarity. ...
Update: Walter Olson has a sharp, clarifying answer to all these questions. Sen. DeMint concurs . I tend to agree more with National Review' s Jim Manzi's argument that "if we could stipulate that we could get all of the effects of an orderly bankruptcy through some government-sponsored process that just had a different name, then of course we should do it." Even if the current deal is designed to protect existing "constituencies," as Olson claims, and eventual bankruptcy is in the cards, given the acute economic downturn there's virtue at this point in postponing the inevitable until a time when the nation can better absorb the blow. But it would be better to have a solution now that actually saved Ford and GM and the jobs they create, instead of saving the UAW's work rules. ... 12:28 A.M.
Wednesday, December 10, 2008
Name That Issue! Hmm. What issue would be at the top of the "legislative agenda" of Andy Stern's S.E.I.U. that Illinois Gov. Blagojevich generously offered to help pass after he was through appointing Obama confidante Valerie Jarrett to the U.S. Senate? If you said "card check"-- the bill eliminating the secret ballot in union recognition elections--you win.
Rumors that the name of the bill is going to be changed to the "Rod Blagojevich F----ing Valuable Choice Act" could not be confirmed as of press time. ...
P.S.: Let's assume SEIU president Andy Stern did nothing wrong , and indeed maybe even blew the whistle on Blagojevich's offer of a "three-way" quid pro quid pro quo (after promising to "put that flag up and see where it goes"). Even so, if Stern was an authorized Obama "emissary" to the governor, in the attempt to get Jarrett a Senate seat, that should trouble opponents of "card check." Why? Because it means Obama wasn't worried about owing Stern a huge favor (if he'd succeeded in getting Jarrett the seat). Would Obama do it if he was planning to disappoint Stern? ...
True, "card check" isn't the only issue Stern cares about . Universal health insurance would probably be considered a sufficient repayment of the favor. But "card check" will come up much sooner. ...
Update: According to several reports , the SEIU official who met with Blagojevich was not Stern, but Tom Balanoff, head of a powerful SEIU local in Chicago. The above analysis still applies--though, as Mary Katharine Ham notes, the question of whether the SEIU was indeed Jarrett's (and Obama's) authorized "emissary" or was freelancing seems fairly crucial. ... The NYT' s Steven Greenhouse implies it was Blagojevich who reached out to the union official, but a) I don't trust Greenhouse--in part because of bias** and in part because b) his story is foggy on the actual details. For example, Greenhouse mentions that a Blago aide "approached" the unnamed SEIU offical, but ignore's the indictment's claim of a later call between Blagojevich himself and the official. ... This seems like a pretty good case of Times readers not getting a clear picture of what went on. ...
**--You can hear Greenhouse on "Talk of the Nation" where he sounds only a bit more pro-Obama than Austan Goolsbee. ... 11:30 P.M.
The Big Center (Part 2): The Nation 's Katha Pollitt, voice of reason, on the Ayers op-ed :
Like his memoir, Fugitive Days , "The Real Bill Ayers" is a sentimentalized, self-justifying whitewash of his role in the weirdo violent fringe of the 1960s-70s antiwar left.
I'm actually not sure I agree with Pollitt when she argues that Weatherman-style violence was counterproductive when it came to stopping the Vietnam War. It seems to me that it contributed to the sense on the part of the "silent majority" that everything was spinning out of control and it was time to reverse course. That doesn't mean Ayers isn't a self-serving fool, or that planting bombs--in one case a nail bomb, as Pollitt points out--isn't terrorism, and crazy, and criminal. ... 11:49 A.M.