Browsing the blog archives for March, 2009.


GM Engine Overhaul

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economy, Obama Administration

Visit msnbc.com for Breaking News, World News, and News about the Economy

Never fear for Rick Wagoner. He’s walking away from GM with a $23 million pension. It’s the rank-and-file GM worker who is more likely to suffer.

Stupid Alert: David Brooks today argues that restructuring doesn’t work. The automakers have been “restructuring” for years, he says. He prophesies that

The most likely outcome, sad to say, is some semiserious restructuring plan, with or without court involvement, to be followed by long-term government intervention and backdoor subsidies forever. That will amount to the world’s most expensive jobs program. It will preserve the overcapacity in the market, create zombie companies and thus hurt Ford. It will raise the protectionist threat as politicians seek to protect the car companies they now run.

What should happen? Brooks says,

It would have been better to keep a distance from G.M. and prepare the region for a structured bankruptcy process. Instead, Obama leapt in. His intentions were good, but getting out with honor will require a ruthless tenacity that is beyond any living politician.

Let’s go back to what the Anonymous Liberal wrote yesterday:

When a company files for bankruptcy under Chapter 11 of Bankruptcy Code, it doesn’t just disappear into a puff of smoke. The goal of a Chapter 11 bankruptcy is a reorganization of the company, and that reorganization process is overseen at every step by the government. Upon filing of the Chapter 11 petition, a federal bankruptcy judge takes jurisdiction and all important decisions from that point forward must by approved by the court. The officers and executives of the company are often replaced. Sometimes a trustee is appointed to run things. All sorts of business issues get litigated during the process. Eventually, if things go according to plan, a plan of reorganization is approved by the judge and the reorganized company emerges from bankruptcy.

In other words, bankruptcy is a process by which a company relinquishes ultimate control of its destiny and its operations to the government in exchange for protection from its creditors. It gives the government a veto power over everything. What the Obama administration is doing right now is no different in principle from what a bankruptcy judge does; they’re just trying to do it outside of the formal bankruptcy process because they believe that doing so will minimize the harm to GM and the overall economy.

As I understand it, the concern is that if a big automaker actually did go into formal bankruptcy, consumers would be frightened away from buying the products. The other concern is that, at the moment, the automaker would be unlikely to get the loans needed to continue operations while the bankruptcy was in process.

Brooks insists that GM already was “restructuring” and had been for some time. I assume Brooks defines “restructuring” as “trying to wriggle out of Union contracts,” because that’s about all I saw the old GM management doing. Brooks continues,

Corporate welfare rarely works when the government invests in rising firms. The odds are really grim when it tries to subsidize fading ones. (In the ’80s, Chrysler already had the successful K-car in the pipeline.)

I’m not sure if he thinks that what the Obama Administration is doing amounts to corporate welfare, or if just shoveling money at Detroit while the old management floundered is corporate welfare.

Wingnut hysteria to the contrary, I don’t think President Obama or anyone else in Washington really wants to be running a car company right now. My interpretation is that the administration is putting GM through the steps of a bankruptcy while reducing the risk that GM will fail completely.

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Recommended Reading

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blogging

The good Roger Ailes, “He’s Special, So Special

The Anonymous Liberal, “Do Conservatives Understand How Bankruptcy Works?

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Beep Beep

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Financial Crisis, Obama Administration

“I believe that the power to make money is a gift from God.” -John D. Rockefeller

I ran into that quote this morning, on the Forbes website. Forbes seems to think it exemplifies wisdom.

Anyway, this morning President Obama announced a policy toward the automobile industry, GM and Chrysler in particular, that lays out what the administration thinks needs to be done to put the automobile industry back on its own four wheels without subsidizing it forever and ever. Alex Koppelman has a succinct explanation of the policy.

Also at Salon, Andrew Leonard asks the question on many minds — Why so hard on the Rust Belt, and so easy on Wall Street?

Treasury Secretary Tim Geithner’s plan to create a market price for toxic assets has been widely lambasted as a scheme to paper over banking sector insolvency. If Obama can force Wagoner to resign, based on his record, then why haven’t Citigroup’s Vikram Pandit and Bank of America’s Ken Lewis been forced to step down? If the White House can declare that G.M.’s bond-holders must accept they will not be repaid in full what they are owed, then why aren’t Citigroup and Bank of America’s debt-holders being told the same thing?

Well, yeah?

Leonard cites Simon Johnson’s article “The Quiet Coup” at The Atlantic, which argues there’s a long pattern of nations being unwilling to squeeze the financial sector hard enough to correct crises such as ours. The Obama Administration appears to be falling into this pattern. The financial team has excessively close ties to Wall Street. Obama policies are crafted to prop up failing executives, not resolve the financial crisis.

However, Leonard continues,

But it is not the only possible explanation. There are a few brave, or perhaps foolhardy, analysts who are willing to argue that the administration’s approach to the banking sector could actually be preparation for the ultimate endgame of nationalization or government-expedited bankruptcy restructuring, rather than the free pass to the banks it currently appears to be.

In this scenario the ongoing stress tests, in conjunction with the price discovery mechanism for toxic mortgage-backed securities that is at the heart of of the Geithner plan to fix banking balance sheets, will reveal once and for all which banks are truly insolvent and cannot survive in their current form. Having established that beyond a doubt — much as the government’s analysis of G.M. and Chrysler’s situation has established pretty conclusively that they cannot continue as currently structured — there will be no other alternative than a government takeover.

See also The Double-Standard Question Haunting Today’s Detroit Announcement.

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Glorious Revolution, Comrades!

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Financial Crisis, Obama Administration

Or, maybe not. The CEO of GM is resigning at the behest of the Obama Administration. Some elements of the Right already are working themselves into a frenzy over the communist takeover, although other elements are fairly subdued. I haven’t seen much commentary from anyone who actually understands anything, so I’m withholding judgment until I learn more.

Via Joan Walsh, there’s an article on the financial oligarchy at the Atlantic that I haven’t read yet, but it looks interesting.

Meanwhile, let’s see what the real communists are up to

A cyber spy network based mainly in China hacked into classified documents from government and private organizations in 103 countries, including the computers of the Dalai Lama and Tibetan exiles, Canadian researchers said Saturday.

Nasty stuff.

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More News That’s Not News

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torture, War on Terror

You can file this under the heading of “stuff we already knew.” Peter Finn and Joby Warrick write for the Washington Post that

…not a single significant plot was foiled as a result of Abu Zubaida’s tortured confessions, according to former senior government officials who closely followed the interrogations. Nearly all of the leads attained through the harsh measures quickly evaporated, while most of the useful information from Abu Zubaida — chiefly names of al-Qaeda members and associates — was obtained before waterboarding was introduced, they said.

I already wrote a post about this same subject. It’s dated September 9, 2006. According to news stories then, what useful information came from Abu Zubaida was obtained through standard (e.g., Gevena convention-sanctioned) interrogation techniques. Once the “harsh interrogators” took over, no more useful information came from Zubaida.

Moreover, within weeks of his capture, U.S. officials had gained evidence that made clear they had misjudged Abu Zubaida. President George W. Bush had publicly described him as “al-Qaeda’s chief of operations,” and other top officials called him a “trusted associate” of al-Qaeda leader Osama bin Laden and a major figure in the planning of the Sept. 11, 2001, terrorist attacks. None of that was accurate, the new evidence showed.

In other words, the Bush Administration detained and tortured Abu Zubaida for the propaganda value.

This is not to say Abu Zubaida was not a player in the world of Islamic terrorism. He was, and there are good arguments for not releasing him, assuming he’s still sane.

But Abu Zubaida had strained and limited relations with bin Laden and only vague knowledge before the Sept. 11 attacks that something was brewing, the officials said.

Oh, I so miss the days when Ari Fleischer would tell us those cute stories about plots to take apart the Brooklyn Bridge with a chainsaw.

Anyway, Scott Horton, publius, and Marcy Wheeler all have insightful things to say about this mess.

There’s not much reaction from the Right yet, and I doubt there will be. There’s a story flying around that Joe Biden’s daughter was caught snorting coke, so you know the righties will be all over that for the next several days. It’s proof that liberals are bad parents, you know. The one rightie reaction I have seen dismisses the WaPo article as hearsay, and adds,

Once again we have a string of wild assertions made by the Washington Post via some “anonymous officials” and unrevealed “documents.”

Of course we are supposed to believe these anonymous sources over Mr. Zubaida’s own claims. (The Post helpfully notes that he has memory problems, due to a head wound.)

I’m assuming the writer has unique knowledge of what “Mr. Zubaida’s own claims” are that contradict the WaPo story.

But obviously this is just the Post once again beating the drum for show trials about the (entirely legal and ethical) interrogation of terrorists.

And we know the interrogation is legal and ethical, because we say it is!

It really is too bad that the terrorists Flight 77 hit the Pentagon instead of, say, 15th Street.

See, the problem is that the Washington Post wasn’t happy enough during the Bush Administration. Indeed, many of us were insufficiently happy and should have received political re-education and maybe some harsh interrogation until we were happy.

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Spanish Inquiry on Torture

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Bush Administration, torture

Marlise Simons, New York Times:

A Spanish court has taken the first steps toward opening a criminal investigation into allegations that six former high-level Bush administration officials violated international law by providing the legal framework to justify the torture of prisoners at Guantánamo Bay, Cuba, an official close to the case said.

Yep, it took a Spanish court to do what our government ought to have done by now. No excuses.

The six are (list taken from dday at Washington Monthly):

  • former Attorney General Alberto Gonzales
  • John Yoo, the Justice Department attorney who authored the infamous “torture memo”
  • Jay Bybee, Yoo’s superior at the Office of Legal Counsel, also involved in the creation of torture memos
  • David Addington, Dick Cheney’s chief of staff and legal adviser
  • Douglas Feith, the former undersecretary of defense for policy
  • William Haynes, the legal counsel at the DoD

Dday also says,

I would call this a big deal. As the report notes, Garzon indicted Augusto Pinochet, which led to his arrest and extradition. This would not immediately lead to arrest and trial, but it would certainly confine the six officials to the United States and increase the pressure for stateside investigations. Spanish courts have “universal jurisdiction” over human rights abuses, under a 1985 law, particularly if they can be linked to Spain.

Scott Horton at Harper’s explains,

The case was opened in the Spanish national security court, the Audencia Nacional. In July 2006, the Spanish Supreme Court overturned the conviction of a former Spanish citizen who had been held in Guantánamo, labeling the regime established in Guantánamo a “legal black hole.” The court forbade Spanish cooperation with U.S. authorities in connection with the Guantánamo facility. The current criminal case evolved out of an investigation into allegations, sustained by Spain’s Supreme Court, that the Spanish citizen had been tortured in Guantánamo.

The Spanish criminal court now may seek the arrest of any of the targets if they travel to Spain or any of the 24 nations that participate in the European extraditions convention (it would have to follow a more formal extradition process in other countries beyond the 24). The Bush lawyers will therefore run a serious risk of being apprehended if they travel outside of the United States.

Again, this should have been done by our government already.

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Dr. Tiller Vindicated

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abortion

Well, that was quick. The defense rested yesterday, and today the Tiller jury took less than an hour to find him not guilty of all charges.

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Sorry About the Propaganda, Righties

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Obama Administration

Last night I was bummed out about Chinese government propaganda about Tibet. You may know that tomorrow is Serf Liberation Day in Tibet, an observance of the “glorious liberation” of the Tibetan people by Chairman Mao. I understand that tomorrow it will be 50 years since the last free Tibetan parliament was broken up by China.

Here’s a typical Xinhua photograph of happy liberated Tibetans preparing to celebrate. You just know Tibetans spontaneously throw on matching ethnic attire and carry icons of the Chinese Communist Party while grinning insanely. The white scarf draped around the picture frame is a nice touch.

Xinhua

Xinhua

But I went to bed last night thinking about Ground Zero in Manhattan. One of the several points of contention that has held up reconstruction there is propaganda. For a time the righties wanted to turn the hole in the ground in the Financial District into a glorious tribute to Dear Leader Bush and the glorious liberation of Iraq.

One plan I remember was to prominently display in a visitors’ center a billboard-size photograph of an Iraqi voter — a happy Iraqi voter, mind you — happily waving a purple finger. Some of us who were actually in Manhattan on 9/11 had this crazy idea that what should be memorialized is, you know, 9/11. Not bleeping Iraq, which didn’t have a bleeping thing to do with 9/11.

People dug in their heels and would not budge, so the hole in the ground is still mostly a hole in the ground.

Construction of the “Freedom Tower” has begun, but lo, according to the New York Post the Port Authority has decided not to call it the “Freedom Tower,” but One World Trade Center. Naturally, righties are miffed because some of us don’t appreciate “freedom.”

I do appreciate freedom, which is one reason it’s a relief to me the tower won’t be called the “Freedom Tower.” That name is so, like, Xinhua. I would have had to put quotations marks for irony around “Freedom” every time I keyboarded it.

Rightie propaganda to the contrary, what happened on 9/11 didn’t revolve around the issue of political oppression versus political freedom. It revolved around the fact that some religious fanatics worked themselves into a homicidal rage and killed a lot of good people for no sane reason. If you want to give the tower a name that actually means something relating to 9/11, call it the Rationality Tower. Or, the Peace, Love and/or Compassion Tower would work for me also.

“They hate our freedoms” never was an honest answer to the question, “Why did al Qaeda attack the U.S.?” Al Qaeda didn’t give a bleep about our freedoms, one way or another. A more honest answer would have been “Because they’re crazy.” It was fanaticism that drove them. Certainly, the Western Powers — not the U.S. alone — have a history in the Middle East that doesn’t always shine with the glory of righteousness. But there were many other, saner ways that any outstanding grievances could have been remedied.

The objective for the 9/11 attacks was to goad the U.S. into attacking a Muslim country, which is what Osama bin Laden had wanted for years. That would, he thought, provide the impetus to rally the Muslim world against the West. And, by golly, the idiot righties and the idiot Bush Administration were all too happy to give Osama bin Laden what he wanted.

Maybe we should call the thing the We’re Sorry We Took the Bait Tower.

I think the Chinese genuinely want Tibetans to be happy they are “liberated,” or at least to pretend they are. Any expression to the contrary enrages the Chinese so. Monks are routinely hauled away and tortured merely for possessing a photograph of the Dalai Lama. What is the point of the torture, except to act out rage?

By the same token, by many accounts President Bush was obsessed with wanting the Iraqis to thank him for liberating them. And the Right complained perpetually that news media “weren’t telling the real story” about what was going on in Iraq. If you listened to them closely, you suspect they longed for the kind of news reporting that Xinhua provides the Chinese about Tibet, an alternate reality I call “the happy happiness of happyland.”

They wanted mass parades of Iraqis waving American flags and images of Dear Leader Bush. Instead, they got a guy throwing a shoe. And I understand that guy has been sentenced to three years in prison for throwing a shoe. That’s about what a Tibetan monk gets if he’s caught with a photo of the Dalai Lama.

And the Right is pissed that we can’t use the word “freedom”? My dears, “freedom” means to a rightie what “liberation” means to the Chinese Communist Party — raw exercise of power.

I did a riff on the word freedom and what it means to righties back in 2005. “What we can see unfold before our eyes is the appropriation of the word freedom to mean ‘policies of the Bush Administration.'” I said then. And I quoted Riverbend,

We’re so free, we often find ourselves prisoners of our homes, with roads cut off indefinitely and complete areas made inaccessible. We are so free to assemble that people now fear having gatherings because a large number of friends or family members may attract too much attention and provoke a raid by American or Iraqi forces.

You’ll remember that Riverbend was so happy in Iraqi happyland she and her family went into exile. Happy days.

Update:
Based on responses so far to David Dunlap’s New York Times website post, I’m not the only one who cringes at the name “Freedom Tower.” It will always be the World Trade Center, said one commenter. A New Yorker, I bet. Also, a whopping majority of responders to a Gothamist poll say they prefer One World Trade Center to “Freedom Tower.”

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Happy Happiness in Happyland

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Asia, News Media

One of the more surreal parts of working on the Buddhism site is cruising around looking for Buddhist news. Xinhua, the Chinese government news agency, is always a great source for stories about the wonderful things the government of China is doing for various Buddhist temples and monasteries.

Today I ran into a happy story about repair and restoration work planned for Labrang Monastery, an important monastery in Gansu Province. On the other blog I wrote a roundup of news stories about Labrang Monastery over the past year. Highlights: Arrests, beatings, torture, strip searches, “disappeared” monks.

Somehow, Xinhua left those details out of its happy story. However, Xinhua did link to a charming photo gallery showing happy Tibetans enjoying peace, prosperity and democratic reform under Chinese rule.

The “happy” stories must mostly be for Chinese, who want to believe them. I understand China does a remarkable job of preventing non-Chinese news sources from penetrating the Great Firewall of China. But I find a remarkable number of westerners who believe them also.

The stories of happy happiness remind me of the stories the Right always wanted to come out of Iraq. The Bush Administration should have hired Xinhua to manage Iraq news for them.

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Make the World Safe for Tax Increases

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Congress

E.J. Dionne has another good column today. Last two paragraphs:

The larger problem is the emptiness of all the howling over the long-term deficits. Nibbling away at bits of Obama’s proposed budget will do very little about them. Talk of “entitlement reform” is empty unless we have health-care reform — and unless we acknowledge that we will never cut Medicare and Social Security enough to close the budget gap. In fact, Social Security is more important than ever, now that the value of so many 401(k)s has plummeted.

The task of those who genuinely care about deficits is to make the world safe for tax increases. Under current conditions, it’s a whole lot easier for politicians to talk a lot about deficits, and then just let them grow.

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