Set up a prepackaged bankruptcy.

I started to argue for something similar to this the other day, but the real world beckoned so I had to stop.  The biggest problem with an automaker going through bankruptcy is that it would be hard to convince buyers that their warranties were worth anything.  A fast tracked bailout or some kind of Congressionally designed “bankruptcy-like” process that would enable the Big Three to make necessary structural changes while assuaging concerns of prospective buyers is a good compromise.  Otherwise Congress will eventually just throw money, in the form of more loan guarantees, at the companies with only modest changes to their failing business model.

From the world of academia…

A detailed analysis of black carbon — the residue of burned organic matter — in computer climate models suggests that those models may be overestimating global warming predictions.

Not to worry, though.  Nothing will dampen the ferver of the true believers.

More interesting:

The findings are significant because soils are by far the world’s largest source of carbon dioxide, producing 10 times more carbon dioxide each year than all the carbon dioxide emissions from human activities combined. Small changes in how carbon emissions from soils are estimated, therefore, can have a large impact.

Presumably there is very little to nothing that we could do to intentionally affect the black carbon content in soils.  So at best, if man ceased to do ANYTHING that resulted in carbon emissions (doesn’t really sound like best case, but you get my drift) the best we can hope to do is decrease total carbon emission by less than 10%.  If we cut man made emissions by 10%, which would be painful itself, we could only decrease emissions by about 1%.  And that is ignoring all of the other natural sources of carbon emissions that we have no control over.

Considering the significant liberties that would have to be given up to achieve the goals of the global warmitarians it really doesn’t seem like it would be worth it for a rounding error.

From ABC: Big Three CEOs Flew Private Jets to Plead for Public Funds

It is just absurd that we would even entertain the notion of bailing them out.  We don’t need to subsidize overly generous, unsustainable union contracts and we sure as hell don’t need to subsidize fleets of private planes.

The article also mentions that AIG, who has been the beneficiary of around $150 million in bailout money, is still flying their fleet of corporate jets.

Of the $25 billion the companies are asking for GM would expect to get between $10 to $12 billion.  But they may need $4 to $5 billion per month to avoid bankruptcy.  So Congress could pass this bailout and only keep GM afloat for two months.  Hardly seems worth it.

GM’s current market cap is about $1.7 billion - a fraction of the total bailout the Big Three are seeking.  The mere fact that some rich guy like Bill Gates, George Lucas, Sergey Brin, or Ralph Lauren doesn’t swoop in and purchase an American icon for a relative pittance shows just how big GM’s problems are.  They are structural and won’t be cured by a bailout or management shakeup.  Their costs are too high.  The US auto market is saturated.  Their dealer network is too numerous.  Installing new leadership can’t fix any of those in time to make a difference.  Union contracts must be negotiated (often at great length), the market for autos is what it is, and byzantine laws make it difficult to shutter dealerships.

The ONLY viable option (right now) is bankruptcy.

I sent an email a while back to Senator Shelby expressing my concerns with the Bailout and thanking him for standing fast against it. He replied with a nice letter and I don’t think he’d mind if I shared it with you. The letter was dated November 3 (any typos are mine):

Thank you for contacting me with your concerns regarding the Emergency Economic Stabilization Act of 2008, which is essentially the financial sector bailout plan devised by U.S. Treasury Secretary Hank Paulson.

I believe that there are significant flaws with this plan that will prevent it from working effectively and will result in unnecessary risks to the taxpayer.  Therefore, I opposed the legislation and would like to take the opportunity to explain my concerns.

First, the process in which this bill was assembled was not as deliberative or thorough as it should have been.  This situation did not appear in a matter of days, and we are not going to fix it with a piece of legislation quickly cobbled together in back rooms of the United States Capitol.  It took nearly 10 years, five Congresses, and three Presidential Administrations for the far smaller Savings and Loan Crisis of the 1980s and 1990s to be resolved.  There are no easy fixes and this crisis will not be resolved quickly.  Deliberation on any potential solutions should not have been done in such a haphazard manner.

Second, the Paulson bailout plan focuses on a single problem — illiquid assets in our financial institutions.  I believe, however, that there are a number of interrelated problems such as the troubled assets on the books of financial institutions and the process of declaring home values that also need to be addressed in order of their significance.  Congress should have undertaken the effort to determine the best course for each of the issues causing problems in our troubled markets.  Instead, we chose to rush through a plan without ever considering any of its details.

Third,  the bill contains a precipitous increase in deposit insurance limits from $100,00 to $250,000.  This would markedly increase the exposure of the already depleted federal deposit insurance fund.  This increase was made with little or no debate and would further amplify the risk to the American taxpayer.  There is also a very problematic track record for rapid increases in deposit insurance, which was one of the factors leading to the Savings and Loan crisis of the 1980s.

Fourth, this law creates the Troubled Asset Relief Program to authorize the Treasury Secretary to purchase up to $700 billion worth of troubled assets from just about any type of institution.  In exercising this authority, the Secretary would be vested with nearly unfettered power.  The oversight, or lack there of, of such power is greatly concerning.  While the bill establishes a Financial Stability Oversight Board to review and make recommendations of the Secretary’s operation of the program, the oversight board is fatally flawed.  The Oversight Board, on which the Secretary himself will serve, along with the Congressional Oversight panel, will not check the Secretary’s authority and will do nothing to address the fundamental flaws within this plan.

Ultimately, my greatest concern is that we have not spent any time determining whether we have chosen the best response to our financial problems.  To the extent that other options exist, I believe that we in Washington have failed the American people in not fully examining these options.  I believe that “choosing something, over nothing,” is a false choice.  This bill does not address the underlying problems with our financial institutions; for that reason I opposed this legislation.

Kevin Wendt, Editor of The Huntsville Times, spoke Saturday at a GOP breakfast meeting. He noted that the Times has a circulation of about 70,000 and claimed that 76% of Madison Countians read either the print or online editions of the paper.  A typical reader spends 27 minutes with the paper.

Wendt said that the Times will focus on three areas: 1) watchdog journalism, 2) usefulness, and 3) relevance.

I respect Wendt for reaching out to a somewhat hostile (but polite) audience. The Times (like the rest of the press) was openly in the tank for Obama this year, and has a history of reporting like an organ of the Democratic Party (Pravda on the Pinhook).  This is bigger than Wendt, and in his defense, he is new to the job, new to the Times, and new to Huntsville. He seems to want to make The Times appealing to those of us who have all but given up on the paper.

After his address, Wendt took questions from the audience of several hundred people.  There were too many questions for the time available, but here are the ones that were asked.  Note that not only have I paraphrased the Q and A, but I also take bad notes:

Q - Why did the Times endorse all of the incumbents?

A - Too new to the job to answer fully, but the Times has a “history of endorsing incumbents”.

Q - Watchdog paper? What about the lack of reporting on the Jail?

A - Did a traffic ticket story (ed. - I missed the story and don’t get the reference).  Hope to do an investigative story.

Q - Why should conservatives buy a biased paper?

A - We try.

Q - What is the process for endorsements?

A - Invite candidates to meet with editorial board, send reporters to events and forums.

Q - Why is The Times ignoring the Two-Year College Scandal?

A - Don’t know.

Q - John Ehinger is pretty fair, rest are biased. Are there any conservatives on the staff?

A - Recognize that Prather and Person are issues (ed. my words).

Q - Journalism died.

A - Justifiable complaints against national media. Local media best at local news.

Q - Is Obama worst candidate ever?

A - No answer.

Q - Do you think the US elected a Marxist?

A - No.

Q - Why did the Times decline to endorse a Presidential candidate.

A - Other information available from sources with better resources.

Q - Obama’s birth certificate?

A - Role of national media.

Q - Newspaper endorses Dems?

A - 10 Dems, 6 GOP, would have endorsed 3 GOP who had no opposition.

Q - Fairness / Censorship Doctrine?

A - “No need for it”.

Q - What is the Times position on Nepotism?

A - No answer.

Q - Pew found bias for Obama and Democrats?

A - Disturbed by the “national media failure”.

Former Washington DC Mayor Anthony Williams (D) is a great guy.  We used the same dry cleaner in Adams-Morgan, where I met him about a year before he ran for Mayor.  He was always friendly and funny and we chatted a good bit.  When he ran for Mayor, I campaigned for him. 

Williams served two terms and is regarded as the best Mayor DC has had (Home Rule began in the 70s).  I realize that the bar for best Mayor was set very low after Marion Barry.  Under Williams, crime went down, property values went up, and the District gained financial stability (plus the Washington Nationals baseball team).

Last week, Anthony Williams foiled a robbery in DC, apparently by the power of his bow tie:

Williams ran after and caught a thief who had grabbed a package from a UPS truck.

The UPS driver yelled at the thief after seeing the package being swiped.

Williams was nearby and decided to do what any 57-year-old ex-mayor would do: track the guy down on foot.

“I was saying to myself, ‘What am I going to do if I catch him?’,” Williams later joked. “What does a dog do when it catches a car?”

When confronted the thief recognized Williams, saying “Oh, you used to be the mayor!”.

He then handed over the stolen package and disappeared into the crowd.

Great story.

Boston Beer Company announced that Sam Adams Chocolate Bock beer is back, made with Grand Cru Sauvage Swiss chocolate:

…a highly-regarded and rare dark chocolate made from the uncultivated wild Bolivian cacao beans sourced from the dense rainforests located in the small town of Baures, Bolivia. For centuries, this wild cacao has been considered the best in the world. This wild cocoa displays a rich, dark, exotic flavor with notes of honey, vanilla and dried fruits. Brewing Samuel Adams Chocolate Bock with Cru Sauvage cacao nips creates a dark, decadent beer with a big, malty character, complex full-body taste and velvety finish…

Just in time for holiday sipping and gift-giving, this new brew will be available nationwide in early November in select off premise accounts for a suggested retail price of $14.99. Packaged in an attractive 750 ml amber bottle with a festively embossed pewter label, Samuel Adams Chocolate Bock is unlike any offering on shelves today.

$15 each!   Just think of the sales taxes and alcohol taxes Alabama could make on that beer - if it could be sold here.  The beer is 5.6% Alcohol by Volume (ABV), so by alcohol content it is legal in Alabama.  The problem is that the beer is sold in a bottle the size of a wine bottle.  You can buy a smaller bottle of beer or you can buy a keg of beer, you just can’t buy a wine-bottle sized beer.  However, you can buy a wine-bottle sized bottle of wine with 12% ABV.  AARGH!

Reform Alabama’s Beer Laws - Free the Hops!

From the AP:

Even as Detroit’s Big Three teeter on collapse, United Auto Workers President Ron Gettelfinger said Saturday that the problem is not the union’s contract with the automakers and that getting the automakers back on their feet means figuring out a way to turn around the slumping economy.

Very interesting.  Supposedly the Big Three “teeter on collapse” and the UAW refuses to concede anything.  Auto industry shills are (falsely) telling anyone that will listen that collapse will cost all of those workers - plus more - their jobs.  Are they that confident that their friendly, paid for legislators (and president elect) will transfer the heavy burden of union compensation onto the backs of the American people?  Or do they not really think the crisis is all that significant - more of a manufactured cash crunch to elicit government aid and union concessions?  If my livelihood was on the chopping block I wouldn’t stubbornly refuse to concede some ground on wages, benefits, or job guarantees.

Reflexively, Gettelfinger said that the culprit is the economy, not lush union compensation packages.

Instead, Gettelfinger blamed the problems the auto industry is suffering from on things beyond its control - the housing slump, the credit crunch that has made financing a vehicle tough and the 1.2 million jobs that have been lost in the past year.

“We’re here not because of what the auto industry has done,” he said. “We’re here because of what has happened to the economy.”

That is an utterly bogus argument.  It reminds me of a coach whose football team just lost blaming the loss on the weather.  Guess what: both teams had to play in the same weather.  German, Japanese, and Korean automakers have all had to deal with the same economic conditions here in the states.

The problems at the Big Three should draw attention to the woes associated with unions.

Average compensation for UAW workers at the Big Three is over $73 per hour, while workers at Toyota receive $48 per hour.  Why should we subsidize that largess?  One could hardly argue that the UAW workers deserve that much more money since Toyota is able to make a superior product for far less.

The UAW struck a deal with Chrysler that forces the company to give laid off workers 90% of their pay until 2011.

Labor contracts have the Big Three and their suppliers paying 12,000 salary plus benefits to sit around in job banks doing (I kid you not) crossword puzzles.  This costs car companies billions of dollars.

There are also high retiree benefit costs, job guarantees, and other such obligations (in addition to the ones mentioned above) that have distorted the labor market and helped push the Big Three to financial insolvency.  Any “rescue” plan at this point must deal with the labor burden directly.  A bailout written by sympathetic Democrats will do nothing to address the problem.  Chapter 11, where labor contracts can be renegotiated, is likely the best bet.

The NASA agency that routinely flogs the global warming alarmism log has been caught, yet again, in using inaccurate data to push their agenda.  They said that October was the hottest month ever.  Because they used data from the previous month.  Oops.

Their explanation?  They don’t have the resources to exercise proper quality control.

As I previously mentioned, Alabama’s senior senator, Richard C. Shelby, has taken what appears to be a principled stand against a federal bailout for automakers.  Sayeth Sen. Shelby (emphasis mine):

“The financial straits that the Big Three find themselves is not the product of our current economic downturn, but instead is the legacy of the uncompetitive structure of its manufacturing and labor force. The financial situation facing the Big Three is not a national problem, but their problem. I do not support the use of U.S taxpayer dollars to reward the mismanagement of Detroit-based auto manufacturers in such a way that allows them to continue and compound their ongoing mistakes.”

“… not a national problem …”  It is quite interesting that Shelby would choose that particular justification for opposing the bailout.  Let’s take a look at just a few of the numerous pork projects that Shelby has secured for Alabama:

• A parking deck in Tuscaloosa
• Catfish genome research
• A senior center in Argo
• Buses in Gadsden
• A street named after Bear Bryant

What do these, and many other such projects, have in common?  THEY ARE NOT FEDERAL CONCERNS.  A senior center in Argo is Argo’s problem.  Maybe even Alabama’s problem.  But it is not the federal government’s problem.

I’m glad Shelby has seen the light and has come to the conclusion that the federal government should avoid spending hard earned tax dollars on state, local, and private concerns.  I look forward to him applying his new found logic to pork barrel spending.  I also look forward to riding on a flying pig.