Monday, March 30, 2009

The Daily Strike-3/30/09-Cars

Good evening and welcome to the Daily Strike. Good to be back with you. Make sure you catch up by reading the Weekly Strike (below) and the great pinch-hitting work from The Big Picture this weekend.

CARS: As we mentioned earlier today, President Obama made big news by deeming reconstruction proposals from GM and Chrysler "not viable." GM now has 60 days to submit an additional plan before it may be forced into bankruptcy. Chrysler will have 30 days to finalize a merger with Italian company FIAT, or it too, will be in danger of going under. The President is not giving these companies the complete cold shoulder. GM will be getting government bailout money during next two months to cover operating costs. Chrysler will receive government money for the next month, and will get an additional $6 billion if it merges with FIAT.

I talked earlier about the double standard in how the President treats failed auto companies and failed financial institutions. I think there are some important differences worth mentioning.

1. Power. The financial sector, as noted today in a brilliant article by MIT economist Simon Johnson, makes up about 41% of our gross national product. Because they've made so much money, they've gained unfettered access to politicians of both parties. Politicians are far less likely to act punitively towards their big donors, and the bank rollers of huge amounts of government revenue.

2. Ripple Effect. For better or worse (ok, worse) the financial sector is vital to the overall health of the economy to a far larger extent than the auto companies. As much as I hate many financial institutions, if we allowed them to fail, millions of Americans would lose their hard earned pensions and life savings. Most Americans save money to retire, and they trust it to banks. If people were to lose those assets, they wouldn't have money to spend now or in the future, and the economy would suffer as a result. If an auto company fails, 3 million people might lose jobs, and that would be a big hit to the economy, but certainly not to the same degree as if, say, Citibank were to go bankrupt and tens of millions of Americans lost all of their assets.

3. National Ethos. One thing worth mentioning is that their seems to be a national contempt towards auto companies and their workers. The data clearly show that Americans don't want to help auto companies. They see their failures as a result of years of bad management, bloated union contracts, and lack of innovation. To a certain extent, they're right. It's easy for your average American to see how the domestic auto companies have failed us when we drive our reliable, fuel efficient Hondas and Toyotas. Until the last year or so, the financial sector wasn't viewed with the same sort of contempt. In fact, they were seen as the "creators of wealth" and innovative entrepreneurs. Just now, the country is figuring out that financial institutions are actually the "takers of wealth" through risky schemes like derivatives trading. Even though Americans have come around recently and now have distrust of financial institutions. But, it took awhile for that contempt to sink in with our political leaders and the mainstream media.

Let's just hope our national ethos changes so that we respect and admire those who work hard and have concern for the common good instead of those who simply want to accumulate massive amounts of wealth for themselves.

CONGRESS: Not much action today in Congress (typical for a Monday). The House voted this evening (for the 6th time!!) to table (kill) a resolution offered by Rep. Jeff Flake to start an investigation regarding the relationship between lobbyist firm PMA and Rep. John Murtha (D-PA). As Politico noted earlier today, more Democrats seem to be jumping ship every time Flake brings up a new version of the resolution. Democratic leaders are worried that eventually they won't have the votes to kill the measure, and that they would have to watch one of their members get excoriated during hours of debate on the House floor. The vote today was 210-173 to table the resolution, with 13 members voting "present." The House also passed a couple of other suspension bills.

I mentioned in today's Weekly Strike that the Democratic leadership wanted to bring up the Senate amendments to the public service bill under expedited suspension procedures that would have required a 2/3rds majority vote. It looks like they've decided to scrap that plan. Instead, they will consider the bill under regular order. The obvious reason for this (as far as I can see) is that the leadership determined that they didn't have the 2/3rds majority necessary to suspend the rules and pass the bill. As a result, the bill will probably come up for a vote on Wednesday or Thursday, and it should pass with a relatively large majority.

No action in the Senate today. Votes on amendments to the budget resolution are possible tomorrow, and we'll cover them if they happen.

Oh, and finally, after a year of obstruction from Senator Tom Coburn, President Obama finally signed the Omnibus Public Lands bill into law during a ceremony at the White House. He praised the bipartisan delegation who helped pass the bill for protecting our natural resources. He also mentioned a little-known provision in the bill, which is money for research to help those who suffer from spinal cord injuries. The measure was advocated by the relatives of the late actor Christopher Reeves. I hope Coburn enjoyed his parliamentary games, because it's pretty clear that he could have delayed cures to life-limiting illnesses. Thanks Coburn.

That's it for tonight, the budget battle begins in earnest tomorrow (mostly on the floor of the Senate) and we'll let you know of all the going-ons. Make sure you share your comments! We'll feature the best one in its own post later in the week. Also, PLEASE add yourself as a follower of the blog if you have not already done so.

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