Time to Look at Depression History (Budget Cuts/Archie)

despite what Archie Bunker said, (Man, we need a man like Herbert Hoover Again...)

We need to AVOID what the Tea-Bagger's Party wants us to do RIGHT now, which is to CUT public works and cutting SPENDING.  That is what they did during Hoover's presidency.  And he screwed up the cleanup of the Stock Market crash, and really made things MUCH MUCH WORSE...

Actually Archie is (as was the comment in this clip, saying Ross Perot saying, "I TOLD YOU SO..(3X)" was right.  (the ENTIRE clip is SO amusing, but skip to 1min 47 seconds to see what I am talking about)...-(UPDATE 11-14-11)

But as Hurricane Irene this past weekend has showed us, WE NEED to fix the infrastructure in this country.\

And We need to EMPLOY As MANY people as we can for A LONG LONG TIME.

THUS, MY PLAN :

Update the transportation system created by President Dwight D. Eisenhower (the Eisenhower Highway system).

In one (VERY LONG?) paragraph:

Expand the existing Eisenhower Highway system by adding (a minimum) of 4 NEW rail tracks (2 for passenger, and two for freight, cars and trucks).  This expansion will be separate from the existing national rail network, and will be run by the state or local authority that runs the existing roads.  The long term goals of this expansion are:

1. Allowing a tractor trailer or car (or any other vehicle) to get on the system on the East Coast and travel automatically to any point in the country.  
2. Reducing energy consumption, gas consumption and imported energy. 
3. A massive employment program that will work (as did the Eisenhower program) to employ workers for at least 20-30 years (long enough to have a Career, doing this). 
4. Getting our country to be more productive, reduce costs of transportation  and to introduce a smart system to allow modern technology to supplement the 20th century version of "the car as the medium".  This particular goal will allow a driver-less method for increasing productivity (no 10 hr behind the wheel, because the train will do the work), as well as automatically planning your routing.

RIP: Chrysler goes Chapter 11

Ok. I said in december (and November!) 2008, that Detroit needed to go into bankruptcy court to get out of the excessive dealer networks that they had.

Case in Point: GM.

But now, poor little chrysler is in Chapter 11.
Oh shades of Lee Iococca.

Oh those mean old bond-holders who wanted all their money.

oh mean Mr. Grinch, you steal me blind.

It will be good for them...

In a related AP/ABC article, I found this subtle quote:

The administration also said there will be no layoffs associated with the bankruptcy.

Although dealerships will eventually take a hit and will be closed over time, but it is unclear at this point exactly how many.

The company will be able to operate normally during the bankruptcy process. Americans will be able to buy Chrysler cars and warranties will be honored.

So, I guess my prediction rate is still pretty good...

Oh, and regarding those terrrible Hedge funds that refused to negotiate?

The article also says that:

...(statistics from (yeah?) "well-known bankruptcy expert Lynn LoPucki's Web site that tracks (bankruptcy) filings (and) found that from 2000 to the present,

that the length of the median "pre-negotiated" bankruptcy case was about 5.3 months. During the same period, the length of the median "prepackaged" case was about 52 days, according to the same data source.

"Prepackaged" means that the debtor drafted the plan and successfully solicited votes on it before filing the case. Prepackaged cases nearly always are filed solely to modify the company's liability on junk bonds. Once filed, these cases move very quickly.

"Prenegotiated" means that the debtor negotiated the terms of the plan with some, but not all creditor groups before filing -- even if no prefiling vote was taken on the plan. An example would be a plan to sell the debtor's business, which has been drafted and negotiated with a large secured creditor before filing, but not with trade creditors.

So it looks like the junk bond (and hedge funds) will LOSE this fight....
And who knows, maybe we will have a new viable car company...

We can pray.

Another "DEPRESSION" sighter: Robert Reich confirms my call of 6 months ago

Hey. I said it HERE on 10/30/08

I am not an economist. I am not a political hack. I am simply someone who can see long term trends and extrapolate from there.

I emailed EVERY single person I could. I think that Robert Reich, Brian Lehrer, and a few other public people are on my mailing list for this blog.


I kept saying (over two years ago) that we were headed for a terrible economic shock, and needed to bring the country together again, with a new version of Roosevelt's "new deal".

Also See the Next person to confirm my beliefs, former IMF chief on 2/9/09.

Anyone want to take on my next item, about Saving the car companies, and why we're asking the WRONG questions?

We DONT need to save GM and Chrysler. We need to save the JOBS they represent. However, we need to change detroit from car companies into TRANSPORTATION companies.

We (USA) will never again sell 5 million cars in our country in one year.
We will never ever have the same free open credit again.
We need to come to this realization.

We need to scrap attempts to save GM and Chrysler as is. We need to turn them into GREEN transportation companies. See the post above, or just search my blog for auto-bailout.

We need to start to DISCUSS these issues, especially the two issues that no-one (else) has started to discuss:

a) A mandatory service/training corp/conscription (let's call it national service for arguments sake). See HERE (comes under: Job training, education, minority assistance...)

b) Federally paid day care starting at six months. (head-start, education)

And: we need to start to undo the damage that wall street has done to the world.

Number one on my list is to BAN the concept or development of "CDO"'s (collateralized debt obligations)-- Banning CDO's is essential to get wall street under control, and under reasonable debt obligations. see here.

The reason we need to ban CDO's is simple. I believe that the 'sub-prime' mess was only 25% of the toxic debt on the books from the banks.

The rest of the shoe will start to drop later this year, when consumer debt created CDO's (like car loans, student loans, and Credit card debt), start to go belly up.

When that hits (and I think that is a 15-17 trillion dollar mark) we will think the 'sub-prime' mess was a walk in the park...

I wish I didn't have this ability to see long trends where other people don't.

I wish I could be predicting that the Dow Jones wasn't going to drop below 5600 (but it will bottom out around there.

I wish I had a degree in economics so that I could be quotable, and interesting to media types.

I wish I had a job that would allow me to bring my long term vision to a company that needed good long term (strategic) computer advice.

I can wish for a good lottery ticket, but I need to get one first.

Cheers to all. and I wish everyone to continue to be employed.

AUTO-Bailout

I should have posted this yesterday before the official plan was released:

PS: I agree Rick Wagoneer needed to be SURGICALLY separated from GM...



I've said it before (HERE, HERE, here, and HERE) :

that we MUST MUST MUST change the marketing, as WELL as the focus of the car companies.

And as I have said before.. (here!!!!)

ALL the companies need to go through a PRE-Packaged (5 minute) bankruptcy.

This will allow the companies to scrap both the labor AS well as the DEALER contracts


Detroit needs at least 75% fewer auto dealers.

GM can still have 5 car brands, but only ONE dealer network that can sell all 5 cars.


doy. This way they can CLEANLY eliminate almost 90 years of excessive marketing and dealers that happened.

It's time to ask the DEALERS (as well as GM itself) to take part in the bloodletting. NOT just the employees.


SO based on this, the Obama plan laid out today lacks certain appeal

However it DOES say that the Federal government will back the warranties of cars sold in the meantime (a great idea-- I said it last november!!!!)

UNLESS a federal bail-out (or takeover) of the car companies include DEALER givebacks or REMOVALS of dealerships the US Auto industry CANNOT be saved...

There are WAY too many dealerships in the US car industry to survive.

Perhaps a reduction from 7 (or 2 for chrysler) dealer networks into ONE each would be a start, and make those dealers have a 30 mile territory instead of a 5 mile territory.

Banks- Nationalize Yes, says a 'publican( update 2-24)

HE Y

I didn't say it.

Sen. Lindsey Graham R-S.C., told George Stephanopoulos on ABC's "This Week", ""I would not take off the idea of nationalizing the banks" from the table."

There. A Republican actually said it.

And that's the Answer.

The answer to Both The Banking Crisis, AND the Automobile companies.

BOTH the banks and our current AUTO industry need to be NATIONALIZED. (I say).

Both industries suffer from:

1. Lack of Customer Trust.
2. A Lack of products that are salable to CURRENT consumer demands.
3. A problem in developing NEW products that are ETHICAL.
4. A lack of forward thinking,

And most importantly, A lack of customers willing or able to use their goods/services.

Auto Industry:

• Poor forward looking (green) planning. Future planning equaled larger and more gas guzzling products.
• Over production of automobiles, based on over-consumption.
• Poor business practices.
• Overly dependent on questionable (long term) business practices (zero percentage financing, leasing, etc).
• Production goals company focused, not country (or world, or ethically) focused.
• Continued insistence of lack of responsibility for current crisis.
  

Financial Industry:

• Unethical product development, and inappropriate marketing to inappropriate customers.
• "slice and dice" of traditional mortgages into 'dicey' financial instruments
• Unethical (fraudulent) "insurance suitability" scandals, originators paid for insurance ratings.
• Refusal of management to admit culpability.
• Continued insistence of lack of responsibility for current crisis..
  

MORE to come...


Here's the deal. We NEED to remove all collateralized debts from the financial system.

I said HERE WHY we need to remove these debt bombs from our society.

Detroit -- A restatement of the OBVIOUS

OK. Previously I stated that the AUTOMOBILE industry is Dead. Totally dead.
Or maybe you want to see where I said it HERE, which starts out, "

"The time has come," the Walrus said,
"To talk of many things:
Of shoes—and ships—and sealing-wax—
Of cabbages—and kings—
And why the sea is boiling hot—
And whether pigs have wings.
...
And Boy oh Boy,do the PIGS in Detroit have HUGE WINGS!

and boy, oh boy, I hear the wings are SO SO big, they're ALREADY complaining that the new Obama administration rules will kill them (see NYTimes HERE) -less then one hour ago in TODAY's issue...

As I said in the FIRST post above (here again)

I believe:

We are asking conflicting (and also the wrong) questions about the current Auto industry Crisis.

Why are we bailing out the Automobile Industry?
Answer 1: Because we want the US Automobile Industry to be Healthy and self supporting?

Answer 2: Because we want the manufacturing capacity of our country to remain intact.

Answer 3: Because we want the manufacturing capacity of the country to remain intact AND we want the Detroit companies to RETRAIN their workers into GREEN and Productive new industries.

Answer 4: Because we want to throw money at a dying industry, so that their employees can then get unemployment.


The correct Answer for OUR COUNTRY? 2.
Because we don't want to lose the MANUFACTURING capacity of OUR COUNTRY...

But see the post for a DETAILED analysis of WHY we want this.

And REMEMBER:

if we PUSH/SHOVE/Drag (kicking and SCREAMIN) the AUTO industry and MAKE it the TRANSPORTATION
Industry (SEE HERE) THEN
we can SAVE the JOBS from the FORMER AUTO industry AND
also TURN the country green.


Bottom line answer for Detroit?

Yes. You're Right. We WANT to kill the car.

Yes, you can still make (and TRY and sell)
ONE small car,
ONE SUV
ONE MiniVAN
ONE PANEL Truck
ONE Pickup Truck

but the REST of your production capacity MUST become GREEN, and become JOBS for PUBLIC transportation and INFRASTRUCTURE.

and rest assurred, it ISNT only the Detroit Auto industry that's dead and buried today.
It's NOW a WORLD-WIDE funeral.

And the rest of the world will eventually get the reason why we need to save the jobs too, but then it will be too late to save the MANUFACTURING base of the United States of America.

Take that and put it in your Peace Pipe before it's too late!!

The Auto Bailouts: Or a tale of Dee and Dum (Tweedle)

To Quote Lewis Carroll,

"The time has come," the Walrus said,
"To talk of many things:
Of shoes—and ships—and sealing-wax—
Of cabbages—and kings—
And why the sea is boiling hot—
And whether pigs have wings.

And Boy oh Boy,do the PIGS in Detroit have HUGE WINGS!


Point One:
(See previous post HERE) discussing whether we are seeking the WRONG Outcome in Detroit.

Based on this discussion, I feel that we need to UNDERSTAND the bailout in much CLOSER details.

Point One: HOW can we expect Detroit to take bailout money, and within three months simply arrive at a new way of becoming PROFITABLE? (See previous post!)

Point Two: In order to (to quote the White House), "Share the pain", we need to spread the pain of the cuts required between employees, shareholders, AS well as suppliers AND DEALERS.

2.1: The Big three insist that they can NOT use bankruptcy as a tool, because no one will then believe in the companies, and their ability to provide warranties on their products.

2.1.a: The answer to this is simply for the auto companies to arrange for INSURANCE with a major insurance company , (such as MET LIFE), that will guarantee warranty service, even past a bankruptcy. (Perhaps PRE-Pay warranty costs in the insurance policy...?)

2.1.b: Once this big problem is eliminated, a PRE-PACKAGED bankruptcy can be negotiated, between the auto companies, the unions, the suppliers AND the DEALER network. ALL these parties must share equally in the pain.

2.1.c: Once everyone agrees in advance, and then the court just goes (in bankruptcy then 30 seconds later the bankruptcy is over.

Point Three: Making the Detroit 3 profitable cannot be a viable answer to the crisis. If we simply tell the companies to cut jobs, we are wasting our money. I don't want to support the Detroit 3. I want to make sure that the three to ten million jobs that they SUPPORT remain here in our COUNTRY.

Point Four: If we want the jobs, but all agree the automobile business in the US is DEAD, then what do the companies do?

Point 4.1: Change them from auto manufacturers into green TRANSIT manufacturers.

The Auto Industry: Rest in Peace

Here's an interesting Obituary. The US automobile industry is dead. Or must be declared dead.

Not that we want the jobs (between 1 and 5 million jobs, according to varying estimates) to go away. We WANT GM and Chrysler and Ford to remain major manufacturers in our country.

What we as a country want is to be RID of OIL as the controlling energy in our country.
How can we do this?

1) A (much bigger) national tax gas. (Will push gas guzzlers off the road!)
2) Offer financial incentives to those driving older cars when they are retired and destroyed.
3) Alternative Fuels: Hydrogen Powered cars are Dead. Corn based Ethanol is also dead. (We need the corn to feed to our cattle and put in our soda and all our foods!)
4) Infrastructure: Putting Mass transit, and Heavy rail (TRUCK) down the center of EVERY (Eisenhower) highway in the country. (See here).

5) Most importantly: We need to PROD/PUSH/PULL the Detroit automakers to give up the automobile, and become TRANSPORTATION companies.

5.a) The initial loans will be used to help Detroit re-tool, hire technical specialists, help retrain current workers into transportation experts.
5.b) Light Rail (Streetcar/passenger) and Heavy Rail (Trucks/trailers) and heavy freight systems will need to be built all over the country, and re-engineered all over.
5.c) as an example, using plans for the recently built Jamaica (NY) to JFK airport, that was built over the Van Wyck Expressway, (The highway that Robert Moses spoke of , saying "Over my dead body will there ever be mass transit on THAT highway!") These plans can be very helpful to build also Rail Lines on Long Island (by the Robert Moses built Northern and Southern State Parkways)

Most importantly by PUSHING the companies to move out of the auto industry, and to retool, we will be putting a great tool for changing energy usage, commuting, and our future country.

The companies can also be told that by creating all this infrastructure future growth for our country that they will be setting up a new generation of energy and commuter futures for the country.

Finally, by forcing the companies out of the auto industry, there will be significant training opportunities for new jobs, and retraining in this new green economy.

oh yeah, each of the companies will also need to keep ONE line of cars/trucks active.

A van, a pickup truck, an economy car, and a taxi-sedan sized car.
But not 30 cars in 8 different car lines.

The next PREDICTION: Save the Car Companies -update

(update 11/20/08 at end)

I had a Dream.

No, not Like Martin Luther King Jr's. Dream.

I had a Dream.

The dream is how to deal with the problems caused by GM, and the NCL (national City Lines) plot to destroy streetcars.

Go here: And find out ALL about GM's CRUSADE against Public Transit in the 1930's through 1950's. I am not re-inventing the wheel. None of this is new.

GM is guilty. They destroyed much of the pre-existing streetcar systems in our country, to gain market, and replace it all with BUSses.

The SOLUTION? THIS is what came to me in that dream!!!

Give GM the Ca$H it wants, with a HUGE CATCH!!!!

Very Simple.
GM gets the $25 billion it wants. And America can also UNDO a huge injustice done to our cities.

GM (and the other Auto companies get the $$$). America gets to tell them where to invest the ca$h. IN TRANSPORTATION infrastructures.

YES. Give the Auto Companies the money they need.

But they must know that their days of building carbon-destroying individual mass transit machines is over.
GM, and the perhaps million and a half jobs that exist behind/under them (parts suppliers, other companies, etc) are VERY VERY important to our country, and will be saved.

However, the auto companies will be required to do massive retooling, and redesign, to start new light rail (formerly called streetcars) transit lines in quantity for rebuilding our country.


The hint to the auto companies is:

We will give you cash to get re-tooled, and re-focused, and you get to keep your valued employees occupied in an what will become a new growth industry in our country.

Look HERE for a previous post on how I think an infrastructure project can also be a ENERGY saving project:

Essentially:

Every single national Highway (NJ Turnpike, Route 95, etc), will have both a freight and a passenger Rail line constructed on either the median, or the sides of the highway, that will serve trucks going down that Highway.

Example:
in NJ the NJ Turnpike is a continuation of Route 95 (Florida to the Northeast).
In NJ, trucks would get on this special rail line, park their truck on a rail car, and simply ride to the end of the turnpike, where they would get off.

Background

In driving to a job in Philadelphia on a Sunday night, I once counted over 500 tractor trailers on Route 95 going south at about 9:PM.

The amount of gas, and energy that would be saved by this series of rail lines would help our carbon footprint, help re-build our country, and help reduce our dependency on trucks in delivering most stuff in the country.

-------11-20-08 update

This is a GREAT start BUT... we also need to HELP P*U*S*H* the car companies into the abyss, by FORCING them to accept pre-packaged (pre-negotiated) bankruptcies as a condition of getting CA$H.

We COULD also make trimming (thinning) the corporate Jet fleets a necessity, perhaps down from 5-10 planes to one?? and one shared (by all three) backup plane?