In the department of “you’ve got to be freaking kidding me,” some on the (far) right are arguing that  Americans should refuse to buy Chrysler and General Motors products as long as the Government (and in some cases the United Auto Workers) own a stake (h/t).

Let’s start with that paradigm of patriotism, Rush Limbaugh:

Nobody wants to support an Obama company.  For those of you for those of you that work at GM you have to understand the people angry are not angry at you. They’re not angry at General Motors.  The people saying they don’t want to buy anything at General Motors are not mad at General Motors.  They don’t want to patronize Obama.  They don’t want to do anything to make Obama’s policies work! This is an untold story, by the way.  Of course, the government-controlled media is not gonna report anything like this but there are a lot of people who are not going to buy from Chrysler or General Motors as long as it is perceived Barack Obama is running it, because people do not want his policy to work here because this is antithetical to the American economic way of life. The government does not own car companies; the government does not design cars, not in a country that works. So people aren’t going to buy products from companies that Obama runs.

Limbaugh goes on to insist that he doesn’t want GM to fail, but he then says this in response to a caller:

Anyway, the point is, be it General Motors, be it Chrysler — whatever else Obama ends up controlling and running — the American people are not going to want it to succeed.  So I want all of you who work at General Motors and all of you who are members of labor unions to understand that the opposition to you is not because of you.

Limbaugh isn’t alone.  Hugh Hewitt has called for a boycott:

In the effort to reverse this lurch beyond the farthest left fringe of previous Democratic statist urges, individual Americans have a role to play. They have to say no to GM products and services until such time as the denationalization occurs. This is a painful conclusion for those of us with friends still working for the company, and who had supported aggressive efforts to help the private company restructure.  But there isn’t any alternative, every dollar spent with GM is a dollar spent against free enterprise. Every car or truck purchased from Government Motors is one not purchased from a private car company that competes fairly against all other car companies.

There’s even an online petition going around (screenshot via The Detroit Bureau):

This is crazy.  Instead of Buy American, some on the right want you to Boycott American. (Imagine what these guys’ response would be if the French or the Chinese were to suggest that.)

Perhaps the best response to this foolishness is to buy an American car.  GM has nearly a dozen new cars already on the market or about to roll out that compete with or beat the best that other car companies have to offer.  Ford is producing some spiffy models as well.

The problem, of course, is that in far too many circles, American-made cars are still regarded as little better than junk.  As WaPo’s Warren Brown noted back in March,

Let’s be frank about this. Let’s be clear. For the past year, as the national economy began to unwind, particularly that part of it represented by the automobile industry, we heard lots of talk from Capitol Hill about Detroit’s need to “restructure,” Detroit’s need to make cars, and fewer trucks, that “Americans want to buy.”

It was bunk fueled by bias. The self-evident portion of that bunk is that 48 percent of the new cars and trucks sold in this country are built by General Motors, Ford and Chrysler. That’s pretty darned good defense of a home market that is wide open to car manufacturers from all over the world, including foreign manufacturers ably assisted by hundreds of millions of dollars in tax breaks from states seeking new factories.

The bias is more subtle. To detect it, you have to spend time trolling the garages and parking lots of Capitol Hill. Lots of Acura, Audi, BMW, Honda, Mercedes-Benz and Toyota cars are in those places. After a while, it becomes clear that it’s not so much that Detroit does not make cars Americans want to buy. What’s obvious is that many of the people who were sent to Washington to represent America are no longer interested in taking what America is making. . . . Detroit makes good cars. The only people who don’t know that are people, who for reasons both valid and ill-founded, long ago abandoned Detroit.

But it’s not just politicians.  If you live in a big city outside of the industrial Midwest, look around.  Hardly anyone drives American cars anymore.  And tell the truth — whenever someone you know has bought an American car, weren’t you just a little bit surprised? Didn’t you wonder why they didn’t buy the comparable Toyota or Honda (or Lexus or BMW)?

To be completely transparent, I’m as guilty of this as anyone — we bought a Volvo S40 in 2006, and didn’t even look at American brands when we shopped.

It’s time to face facts.  For far too long, liberals have bought foreign brands.  Owning a foreign car is as much a part of the lefty/coastie/academic community’s self-image as lattes, Whole Foods, yoga, and Mac laptops.

We — all of us, including me — need to acknowledge our share of the responsibility for having “abandoned Detroit.”  We need to understand that any effort to rebuild the American auto industry requires each of us to start buying American again.

If you really care about the American worker, if you really want to help turn around the economy, and if you really want President Obama to succeed, there is nothing more important that you could do today.  As Hewett noted, we all have an individual role to play.  Let’s change the way we think and what we regard as trendy.

It’s not like we have to sacrifice for this to happen.  Detroit is producing great cars these days.  And many are cheaper than their foreign competition.  They should be flying off the lots.  And right now, they’re not.

Let’s make buying American cars cool again.  Let’s make it so that movie stars will want to arrive at the Oscars in Ford Fusions instead of Toyota Priuses.  Let’s make it so that high school boys will want to drive Mustangs, Camaros, and Tesla Roadsters instead of Porsches and Lamborghinis.  Let’s make it so that athletes will want buy the Cadillac STS instead of the BMW 5 series.

Let’s make it so cool that one day soon, Rush Limbaugh will mock a progressive candidate for President because she drives a Chevy Volt.

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So the news out of the Motor City this weekend (other than the (unfortunately fleeting) joy of Spartan fans everywhere), is that GM’s new President & CEO, Fritz Henderson, has made it clear that he is not afraid to use the dreaded “B” word when it comes to ’saving’ the automotive behemoth from the scrap heap;

That’s right, Bankruptcy.

Indeed, for most people throughout the country, bankruptcy may sound like the most sensible course of action–bring GM into court and go one-by-one down the long (and growing) list of its creditors, telling each of them that, essentially, they’ll get nothing and like it.  In the interim, GM is “reorganized” while under the protection of the court and, in this pie-in-the-sky world, emerges a leaner, meaner American industrial power ready to out-compete European and Asian automakers and go on building cars and trucks (‘green’ ones too!) for another 100 years.

Unfortunately, I see some significant problems with this approach.

First, let me acknowledge that Henderson’s comments may be a thinly disguised effort (by GM in partnership with the Obama Administration) to lure certain creditors to the table for some renegotiation.  For GM’s creditors, getting some kind of return on their accounts receivables & investmentsis certainly more appealing than getting nothing should GM go into bankruptcy.

Second, that said, any discussion of a General Motors bankruptcy must involve consideration of the impact on the numerous part-suppliers and manufacturers who depend on (and have huge amounts of capital invested in the success of) GM, Ford, and Chrysler.  Simply put, bankruptcy for GM, Ford, or Chrysler could kill thousands of these companies.  Many of them have granted the Big Three extension after extension on accounts payable in the hope that their generosity would eventually be rewarded by repayment and an eventual return to business, even if curtailed significantly.  Simply wiping those accounts off the books would crush those businesses, in the process killing as many jobs as you may save.

One telling example of the complexity of bankruptcy fillings in the automotive industry is that of Delphi, the former primary parts-maker for GM.  Delphi has been in bankruptcy court since 2005, and while some in the area had hoped to see a refurbished and slimmed down GM purchase Delphi as a means to centralize some control over parts-production, it now appears that BeijingWest Industries Co. has made such a configuration less likely, only adding additional uncertainty both to Delphi’s ultimate future, as well as that of GM.  This is simply a way of saying that bankruptcy may not be as neat and tidy operation as many think.

This is the reasoning behind the cautious language and trepidatious footwork of both the past and current Administrations when it comes to using the word “bankruptcy,” as everyone in Michigan (and the rest of the industrial Midwest) knows that the ramifications could be disastrous, taking the country further down a road we don’t want to take.

Third — and this is where I see the biggest stumbling block — there are at least two significant structural ambiguities built into all of the estimates for how much it might cost to build an American-made car in the coming decades that are almost certain to make any such bankruptcy-reorganization a lengthier and more complex process than most people may currently envision:  climate change and health care.

Now, in my opinion, requiring a cognizable shift away from gas-guzzlers to more efficient (and yes, even gasoline-free) cars and trucks, while the government provides assistance towards making that shift, is both reasonable and necessary (whether it will be enough is a tougher question).

Since coming into office, the Obama Administration already has raised the Corporate Average Fuel Economy (CAFE) standards for cars & light trucks to 27.3 miles per gallon.   If they’re smart, the automakers should recognize that this is only the beginning.  Adding a great deal more uncertainty to the recovery planning of each auto manufacturer is the possibility legislation requiring additional carbon-dioxide regulation.

Although the Administration has indicated that industries responsible for CO2 emissions should be considered on notice that regulation is, in fact, forthcoming, the lack of detail relating to what the future emissions scheme will be is most unhelpful to the Big Three:  their recovery will be immeasurably altered by life under a CO2-regulatory regime, yet Congress is not going to resolve the myriad issues surrounding comprehensive climate-change legislation before the automakers are called upon to submit their revised recovery plans.

(Interestingly, such legislation is not completely necessary, as the Administration could regulate NOW, with the caveat that more comprehensive Congressional legislation will be on the way, but i am doubtful that such regulation is in the cards.)

Ultimately, the responsibility for this catch-22 must fall at the feet of many of the previous Congresses and Presidential Administrations who have had opportunities to lead in this regard, but who found it all too easy to simply kick the can down the road.  Of course, the Big Three were always more than willing to encourage this benign neglect, which they surely felt was in their best interest at the time.  Now, however, it iscoming back to bite them at a time when it is most unhelpful.

No matter where you place the blame, however, the fact remains that without knowing what the future regulatory scheme will be with respect to CO2 and climate change, GM, Ford, and Chrysler must figure out how to survive in coming decades without a key piece of the regulatory environment that will dominate that future economic landscape.

The same can be said for health care, the second major ambiguity in the Big Three’s future cost environment which has yet to be determined.  Obviously, there are a number of nations whose domestic automakers are buttressed by a national health care system (which means that the Big Three’s chief foreign competitors do not find itself in the business of also purchasing and providing health care to hundreds of thousands of past and current employees).

Again, the solution to resolving this ambiguity lies in the hands of our current Congress and the Obama Administration, both of which have shown quite an admirable determination to move quickly on health care reform.

Let us hope they do, because the fate of the auto-industry depends on it.

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As expected, the release of the findings of the stability plans of GM and Chrysler, coupled with the Obama Administration’s Auto Task Force Recommendations and the big-splash announcement of the resignation of GM CEO Rick Waggoner has have had a huge impact in Detroit.

There are several interesting things about both Monday’s events, and the reaction to them. I hope to be able to address each of them at a later time in a bit more detail, but for now, here are some of my initial impressions.

I’m not sure that asking Rick Waggoner to fall on his sword really accomplishes anything at this point.  Perhaps there was a thought that extending the life-line further had to come at a price, or perhaps the Administration decided to get fresh blood/thinking into the leadership.

Perhaps there was a recognition that some of the problems with the Big Three automakers are a result of their internal culture.  GM clearly tried to make the company all things to all people, in the process diluting its brands, while remaining relatively insulated from both consumers and long-term industry trends.  Over the past decade, they focused almost exclusively on maximizing profit in the short term, and refused to focus on higher-mileage vehicles until Honda, Toyota, and other foreign automakers had passed them by.

Ultimately, I think you definitely lose some invaluable institutional knowledge, but maybe the change will jolt everyone into reality a bit.

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It’s quiet in Michigan today.  The storm has passed.

Not the winter storm, mind you — that is still hard at work, blanketing the state with inch after inch of snow.  But as the storm rages outside, Michiganders are much calmer.  For the first time in weeks, they can stop holding their breath.  There will be a bailout — or at the very least a respite for the Big Three and their workers.

Others, such as TomP at DailyKos, have done a terrific job summarizing the terms of the bailout deal, and the Detroit papers all have statements from auto-execs, union leaders, and Mayor Ken Cockrel, as well as editorials expressing relief, so I will spare you from restating their remarks.

Senator Debbie Stabenow and Congressman John Dingell have (rightly, in my opinion) denounced the severe concessions demanded of the United Auto Workers by the Administration.  But most folks here aren’t parsing the details or hemming and hawing over the concessions — at least for now.

The reason is simple.

As the Congressional bailout bill failed and President Bush decided to take his sweet time in deciding to take action a real sense of impending doom descended on this region — a sense that a crisis much worse than a winter storm was coming our way.

Michiganders know how to dig out from a blizzard.  But over the past few years, we’ve had to learn how to dig out of an economic storm.  Unlike most of the country, we’ve been in a recession since at least 2001.  For decades, excess and shortsightedness had left the state far too reliant on a single industry — one that has proven resistant to the change and evolution needed to stay competitive in an era of global trade, declining labor costs, and rapidly fluctuating gas prices.  In response, we’ve been trying to diversify the state’s industrial base and push the Big Three to modernize.

In short, we’ve were starting to turn the corner, and were doing everything in our power to maintain momentum.

Then came the collapse of the global financial system and credit markets the world over.  Despite having nothing to do with derivatives trading or mortgage-backed securities, the auto-industry was hit with the  double whammy of high gas prices and unavailable credit.  All of a sudden, Michigan’s attempted comeback stalled, but we remained hopeful that we would make it through. . .eventually.

Then the Senate’s rejected the auto bailout, in large part because of the opposition of self-interested Southern Senators whose supposed opposition to the UAW masked the fact that their own states benefitted from foreign automakers having built non-union plants in their states.

As a result, Michiganders started to wonder whether an economic hurricane was going to decimate tens of thousands of families.  Not only did Michigan face the very real possibility that all of our work to turn the state around would be lost, but the long-term viability of both our home-grown industry, and, quite simply, our homes themselves, were at risk of falling apart right before our eyes.

Have you noticed the dire and exasperated tone of Michigan elected officials lately?

Given the fact that these near catastrophic events were poised to take place during the holidays, when the safety and security of your family is paramount in the minds of all, one could excuse Michiganders of a little exasperation and fear.  The tension throughout the state has turned this usually festive season into a time no one will want to remember for a long time.

So while Michiganders are by nature a proud, yet humble, and hard-working people, the palpable emotion throughout the state over the past weeks was one of complete powerlessness.   We began to believe that our future was no longer in our hands.  Not only that, but it seemed as though those in a position to decide our fate had no great affection for our state, or the people who call it home.

So that is why this morning’s news has been met with simple, yet deeply heartfelt relief.  No one is under any illusions about the need for drastic change, and we all know we are not yet out of the woods.

But today, on a quiet snowy day, Michigan can finally stop fearing the worst, and can let out one big sigh of relief.

Photo — Diego Rivera, “Detroit Industry,” by Derek Farr via Flickr, used under a CC 3.0 license.

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As Treasury continues to debate whether to save the Big Three automakers and the NYT reports that Michigan (among other states) has run out of money to pay unemployment, here’s more evidence (as if we needed any) of just how bad things have gotten in Michigan:

The Detroit Free Press and The Detroit News are planning to stop home delivery most days of the week and print a pared-down version of their papers for newsstands on those days, according to people briefed on the plans. They will be the first major dailies in the country to take such drastic steps.

The papers will deliver to subscribers only on the most profitable days of the week — Sunday, and either Thursday or Friday or both, said these people, who spoke on condition of anonymity because they were not authorized to discuss the changes and the decisions were not final. On other days, they will still print slimmer single-copy editions. The changes will be accompanied by staff cuts, these people said. . . .

The Free Press has weekday circulation of 298,000, the 20th-largest in the country, according to the Audit Bureau of Circulations, and its Sunday edition ranks sixth, at 605,000.  The News, which does not print on Sundays, has weekday circulation of 178,000. As at other newspapers around the country, circulation at both has dropped steeply — a decline of about one-quarter since 2000 for The Free Press, and one-third for The News, which then was an evening paper.

When I was a kid, my dad was in the newspaper business in Michigan — as an editor and later publisher of papers in Ypsilanti and Saginaw, Michigan (both auto industry towns).  I was 4 when we moved from Ypsilanti to Saginaw, so I don’t remember much about the paper there.  But I do remember role newspapers played both in helping me learn how to read and developing the habit of reading a paper every day.

In those days, most small-town papers (and some big-city papers like the Detroit News) were published in the evening.  (By the 1980s, most such papers had either moved to mornings or closed down.)  The Saginaw News was no exception to that rule.  As a result, we, like most folks my parents knew, subscribed both to the News and to the Free Press.  Each morning, I would read the latter — at first the sports section and the comics, and later the front section.  Reading the Free Press is what got me interested in (and ultimately hooked on) politics.

My dad won’t like to hear this, but the Saginaw News never even remotely held my interest the way the Free Press did.  The Freep’s sports coverage was better (especially when it came to the Tigers), the comics were far superior, and the paper even looked cooler.  Plus it was the big city paper.  When we moved from Saginaw to Ann Arbor, my relationship with the News ended but the Freep remained a mainstay.  Even after my parents moved to Florida, we’d spend our summers in Michigan and I’d still read the Free Press.  Today, when Molly and I go to visit her mom, we still read it.

So to learn that it’s dying is a deeply sad moment for me, the passing of a part of my youth not unlike the destruction of Tiger Stadium.  And for it to happen at almost the very moment when Michigan’s economy is at risk of collapsing is even sadder.

But it’s not surprising.   After all, it’s awfully hard to sustain a business model when even a newspaper is now viewed as a luxury by most Michiganders.  Add the reality that the rise of first television and then the intertubes has wreaked havoc in the newspaper industry, and the end result is that Detroit is going to be the first major American city not to have a daily paper.

I doubt it will be the last.

While I’m on the subject of Michigan’s long, slow decline, here’s another update from Undip reader Ross on the reaction in Michigan to last week’s Republican filibuster of the auto bailout:

—–

Widespread disbelief here in Michigan today, turning into anger/rage…

Governor Granholm was mightily miffed this morning on Michigan Radio (as well she should be) as is, seemingly everyone I’ve talked to. The pain and widespread worry is especially severe because now it seems that we have been reduced to pinning our hopes on whether that paragon of sensible economic policy, President George W. Bush, will decide to authorize the utilization of TARP funds to extend the ‘bridge loan’ to the Big Three.

At this point, I would hope all his so-called legacy-building includes shoring up the automotive sector so as not to be the President who allowed the manufacturing industry to collapse under the weight of the credit crisis, but… well, you’ll excuse us if our confidence in the sagacity of this current President isn’t exactly registering at or near 100%.

I thought one of the better synopses of last night’s GOP hypocrisy-fest came from Jane Hamsher:

Chris Dodd spoke for working people, and expressed his disbelief that the Senate could let this happen right now:

Talk about your War on Christmas.

Corker of Tennesee then went on to make an impassioned speech about how close they came to a deal, the only sticking point was that the UAW wouldn’t commit to a date to accept salary parity with what workers in foreign auto companies make. Mind you, the Republicans didn’t ask for commitments from dealers or creditors or bond holders or suppliers, just blue collar workers. So that was really where the only problem was going to arise. Funny, none of these bastards demanded wage and benefit cuts for Wall Street workers in the $700 billion bank bailout.

This point is, not surprisingly, echoed by Ron Gettlefinger, UAW President

The GOP Caucus was insisting that the restructuring had to be done on the backs of works and retirees, rather than having all stakeholders come to the table,’ says Gettelfinger.”

Which brings us back to Granholm, who pulled no punches this morning calling out the hypocrisy of the GOP, and the purely political nature of this union scapegoating… That is the true canard in all of this that I hope gets more explanation/coverage from those out there who are trying to help Americans make sense of what is happening right now.

—–

I would only add that I am sickened by the rank parochialism (or regionalism or whatever you want to call it) of Southern Republicans.  Their votes had little to do with their supposed commitment to laissez faire economics, and everything to do with protecting the advantages — which are largely the product of policies that have limited the UAW’s ability to organize — enjoyed by the foreign auto manufacturers that have built plants in their states.

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It’s official:

The Senate on Thursday night abandoned efforts to fashion a government rescue of the American automobile industry, as Senate Republicans refused to support a bill endorsed by the White House and Congressional Democrats.

The failure to reach agreement on Capitol Hill raised a specter of financial collapse for General Motors and Chrysler, which some experts say may not be able to survive until the end of the year.

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 compromise but they deadlocked over Republican demands for steep cuts in pay and benefits by the United Automobile Workers union in 2009.

The failure in Congress to provide a financial lifeline for G.M. and Chrysler was a bruising defeat for President Bush in the waning weeks of his term, and also for President-elect Barack Obama, who earlier on Thursday urged Congress to act to avoid a further loss of jobs in an already deeply debilitated economy.

“It’s over with,” the Senate majority leader, Harry Reid of Nevada, said on the Senate floor, after it was clear that a deal could not be reached. “I dread looking at Wall Street tomorrow. It’s not going to be a pleasant sight.”

Mr. Reid added: “This is going to be a very, very bad Christmas for a lot of people as a result of what takes place here tonight.”

What really pisses me off is that it was a filibuster.  The cloture vote was 52-35, which means the bill would have passed had there been a straight up or down vote.

Back when I was working to defeat the Bolton nomination, “up or down vote” was the Republican mantra.  Now, when it really matters, when we’re talking not about appointing an angry troglodyte but rather SAVING THE FREAKING MANUFACTURING SECTOR, these morons could care less about hundreds of thousands of workers.

The giant sucking sound you hear is the Midwest going down the drain.

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Undip reader Ross writes from Michigan in response to my post late last week on the Big Three bailout.  It’s worth quoting in its entirety:

This is something Kate and I have been discussing, as have many Michiganders, for quite some time–what appears to be the final gust of an ‘economic Katrina’ that is set to demolish southeast Michigan as we know it.

We have multiple family members who have worked for GM, a couple of whom are drawing on pensions at present, but we are also environmental advocates by vocation, so we have been frustrated at the big 3’s downright obstinacy with respect to mileage standards, and all the attendant petroleum/national security/climate change ramifications.

Leaving that aside, however, as you describe above, is the all-to-real fact that failure of what we know as “Detroit’s Auto-Industry” *WILL* result in an economic catastrophe in Michigan that will dwarf this severe one-state recession we’ve already been living in for 8 years now.

In other words, and I wish someone like Senators Levin or Stabenow or Governor Granholm (or anyone with a megaphone big enough to shout this important declaration from an MSM mountain-top high-enough for people nation-wide to hear (and understand) it) would just come out and clearly state the fact that the failure of the big 3 in the terms being bandied about by talking heads everywhere will wipe out middle class families in this state.  period.  (To say nothing of the effects on the poor, which will undoubtedly be (and in many instances, already are) more severe, as donations to food banks & charities dry up with a declination in disposable income across the board)

The double-standard (b/w bailout treatment of wall-street vs. blue-collar-working main street) is certainly felt acutely here, and there appears to really be no more “give” in the safety nets of anyone in the region.  People have already been tapping their savings, 401ks, etc. just to pay the bills… when those finally dry up, there is nothing left. Lose the jobs on top of it and who knows what will become of this once-proud manufacturing hub.

One might make the argument that the decline of the automotive industry in Michigan, and its correlative effects on the southeast Michigan community, has been taking place since the riots of ‘67, and that Coleman Young (apart from whatever most people think of him) was unable to stem the adverse economic tides of the ’80’s (inflation, etc.), and that the core of the city has just continued to limp along since then, without any real or apparent ability to pull itself out of it’s doldrums (as did Houston, Denver, etc.) and revitalize itself to an extent that would be sustainable, with or without the big 3, such that the failure of a bailout package could not be the only thing causing Detroit’s issues at the moment.

However, I really feel that is the wrong way to look at it.  Despite all those problems, Detroit–the city, the community–has been working diligently to bring itself back, diversify, attract new business downtown, expand public transit with a woodward light-rail system, etc. over the past few years… picture us as a fighter who’s been knocked down a bit, but is getting back up on his/her feet.  Those arguing against the bailout also seem to have only begun paying attention to the industry 2 weeks ago, and have missed the fact that there has been a significant amount of restructuring and redirection taking place over the past few years, with major assistance/concessions from the unions, new vehicle programs (eg. the Volt for GM; Ford’s hybrid line), and legacy cost cutting where possible.  People here know what has been happening, and have been working to address the problems.

Failure to extend a bridge loan, however, or to help the automakers get through the biggest financial crisis in generations with a sliver of the money that was thrown at wall-street without any questions being asked will amount to no less than taking a two-by-four to the back of every hard-working Michigander just as they struggle up from the mat.

Of course, Saginaw, Flint, Warren, etc. will continue to decline even further, and you will see a rapid descent into the second failed-state region/economy of the past four years: 1. New Orleans, 2. Detroit.

I guess this is a rather long way of agreeing with you, and echoing much of what you’ve said above… Thanks for giving voice (from outside the region) to the perspective of those of us here who’re still holding out hope that the vital, years-long turn-around process (and that’s what it takes folks, by the way, it’d be nice to just infuse cash into a struggling bank and be done with it, but industrial change of this scale takes time) will not be stifled and stymied by a short-sighted Congress that appears not to recognize the fire with which they are playing…

Ross raises something that I hadn’t really thought through — that the economic Katrina will be even more devastating than I thought.  I was thinking about the immediate consequences — which would be as what the flooding was to New Orleans.

But there’s a second level to this:  the long term impact, which could be exacerbated by the USG’s failure to respond effectively to the current crisis (much as the USG’s bungled response to Katrina made things worse).  What we’re really talking about is the need to respond quickly before things get really, really, really bad — so bad that there will be no way that the USG (not even under Obama) can spend enough money to save Michigan from long-term suffering.

Ross’s point about the need for a Michigan politician to stand up and start shouting also is important.  The problem, however, is that, as Tom Friedman noted on Face the Nation this weekend, these very same politicians have spent the past several decades doing everything they can to insulate the Big Three from the market — fighting CAFE standards, pushing for tax breaks, etc.

Part of what we’re seeing now is the product of forty years of Michigan’s Senators and Members of Congress doing everything they could to protect the auto industry from the realities of the market.  And up to know, the Big Three was more than willing to let that happen, largely because it meant they could make more money.  As Friedman noted this weekend, we shouldn’t just be talking about firing the heads of the Big Three, we also should be talking about accountability for those responsible for what can only be called codependency politics.

Now thateven the power of the Dingells and Levins of the world no longer can protect the Big Three from the realities of the market, they’ve come hat in hand to Congress to ask for a bailout.  As I noted last week (and as Ross noted above), I think Congress has to make that happen (and not just the stopgap measure being put together today).

But one of the conditions must be an end to codependency politics. The protectionism and apologias need to end now.  Because if they don’t, we’re not bailing out the autolmakers, we’re merely postponing their day of reckoning.

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• Thought for the Day
• The Real Face of the Big Three Bailout

Over the past few weeks, the heads of the so-called “Big Three” American automakers have repeatedly gone to Congress to plead for a bailout.  At first media coverage focused on the (legitimate) outrage over the CEOs using separate private jets to come to DC.  Then, this week, we’ve had the circus of watching the same, now supposedly contrite, men arrive after driving 500 miles in hybrid cars.  Throughout, we’ve had the skepticism (and posturing) of Members of Congress, who are holding the country’s largest remaining industry (which, by one account I’ve seen, is responsible for generating jobs for 1 out of every 10 Americans) to a much higher standard than they did the crooks, con-men, and charlatans on Wall Street.

I hold no brief for the Big Three.  For decades now they’ve put short-term profits over long-term thinking.  They’ve sacrificed American strategic interests (and their long-term prosperity) in order to sell big, ugly, gas-guzzling SUVs and trucks.  They have decimated entire communities by outsourcing jobs either overseas or to other parts of the United States — mainly the South — where unions aren’t nearly as powerful.  They’ve proven themselves incapable of streamlining, restructuring, or retooling in a way to make themselves more competitive.  They have brought their problems on themselves, and on one level they deserve to die.

But this is crazy.  We’ve just dumped at least $500 billion into a series of ratholes — AIG, Citi, Bear Stearns, etc. — that contribute no real value to the economy other than to move money around.  But now, we are told, we should not spend significantly less to save hundreds of thousands of people from joblessness.

Does anyone seriously believe that the collapse of the auto industry won’t have a cascade effect?  The first to go will be the auto parts infrastructure that feeds these behemoths.  Then other businesses (large and small) no longer will have the customer base to sustain themselves. (Does anyone seriously think that, say, Wal-Mart will keep stores open if nobody is buying anything?)  Finally, local and state governments will no longer have the tax base necessary to sustain a range of public services.

If there is an equation for a second Great Depression, it has to involve destroying the economy of an entire region in the name of teaching some fat cats a lesson.

As I’ve watched this spectacle, I’ve wondered why Congress isn’t asking the people most affected — the workers — to testify.  This new ad by UAW isn’t a replacement, but it’s an important step toward moving beyond the CEOs to see the real face of the bailout:

I’m a Michigander by birth (though I was raised in Florida).  When I was a kid, there were two iron laws in our family:  go to church and buy American cars.  To this day, when Molly and I return to visit family (she’s also from Michigan), the overwhelming majority of cars on the road are either American-built or American-owned.  Michiganders — even those who don’t work (directly or indirectly) for the automakers — are fiercely loyal to and protective of what they recognize is the foundation of their economy.

We’re not merely talking about the death of an industry here.  We’re talking about the end of a dream and a way of life.  It is the autoworker, after all, that exemplified the potential of mid-20th Century America — a place where you could work a blue collar job, earn a nice middle-class living, and put your kids through college.  It is the Midwest, after all, that was, until the 1970s, the economic engine that drove prosperity throughout the United States.

Abandoned Fisher Body Plant, Detroit

Much of that already is gone.  Here’s what I wrote a few months ago while visiting Michigan:

When I was a kid, my dad was the editor of The Saginaw News.  When we moved there (the summer of 1966), Saginaw was still a fairly prosperous city, with two major plants — Saginaw Steering Gear and Gray Iron Foundry (later Central Foundry) — providing a large number of people the chance to live a middle-class existence.  It was a tradition that everybody worked in one or the other at some point. My brother spent several summers working at one, and my then-brother-in-law started on the line and eventually ended up as an executive after GM helped put him through college.

But the automakers weren’t the only source of prosperity:  Wickes Lumber, a legacy of the years when Saginaw was one of the great lumber processing towns, remained a major employer, and several other large companies contributed as well.  The downtown was in fairly good shape, with several large department stores, including Morley Brothers and Heavenrich’s, as well as the Saginaw Hotel and the newspaper, serving as anchors.

By the time we moved to Ann Arbor (August 1973), the rot already was evident  There were multiple causes:  the 1967 Detroit riots (and 1968 riots elsewhere) caused many whites in the city to flee to the surrounding township; the first mall (Fashion Square) opened outside the city, leading many businesses to move out of downtown and leading those that tried to stay to fail; Wickes consolidated its offices elsewhere; and, of course, the energy crisis, which, combined with competition from Japan, began the Big Three’s long, slow decline (Central Foundry relocated in 1977).

Today, downtown is almost completely empty, most industries are gone, and only the continued presence of Saginaw Steering Gear keeps the city going.  That’s only one story.  Despite its occasional exaggerations, Michael Moore’s Roger and Me is a fairly accurate picture of Flint’s decline.  And there are far too many others.

To let the auto industry die would be to witness the epic failure of Saginaw — and all the other cities and towns that are only barely hanging on as it is.  These workers (and the cities they live in) will face the economic equivalent of Katrina.  If anyone thinks this month’s job loss figures are bad, just wait until the automakers go under.

There are plenty of ways to structure a bailout so as to ensure that it accomplishes not merely the existence of the Big Three, but their reinvention.  These include mandates on changing leadership, a significant paring of lines and models, a cutback on gas-guzzlers, subsidization of alternative technologies, the retooling of plants for other projects (such as high-speed rail), and even some sort of leveraged support that would allow the companies to restructure without actually calling it bankruptcy.

So enough already.  Congress needs to stop moaning about the people running these companies and start thinking about the hundreds of thousands who will suffer if we don’t do the right thing.  Bush needs to do the right thing by signing whatever Congress puts in front of him.  And President-elect Obama needs to speak out more forcefully in favor of a solution.

We can’t afford the consequences of inaction.

Photo:  Derek Farr via Flickr, used under a CC 3.0 license

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Over the weekend, a friend sent me the link to a picture taken at a party celebrating Obama’s Super Tuesday win in Delaware:

I had a blast working with these guys.  We were operating out of a Longshoreman’s Union hall in South Wilmington. My job was to get canvassers out the door and make sure that they knew what to do and where to go.  If I remember correctly, we sent out over 800 volunteers that day.

Going into the weekend before Super Tuesday, Obama was behind in Delaware.  That Sunday, over five thousand people came out to see him at a rally in Wilmington.  That helped narrow the margin, but going into Tuesday, most polls had Obama and Clinton tied or within a point or two of one another.

Obama won Delaware by nine points.  Although some of that was momentum, a big part of it was the ground game.  I remember hearing on the radio that turnout in Wilmington was double what people had expected.  I also remember an interview with Hillary’s Delaware campaign manager, who said that her candidate had lost because of extraordinary turnout in the Second Congressional District.

Here is what The New York Times had to say about that race:

Obama won in Delaware, capturing two of the state’s three counties after recruiting large numbers of volunteers in recent days. His widest margin of victory was in the north of the state, in New Castle County, which includes Wilmington, where candidates fought for 4 of the 15 delegates Delaware was set to award on Tuesday.

Now I recognize that Delaware is not representative — it’s a lot easier to generate that kind of turnout in a small, densely populated state.  But what I saw in Wilmington — intensive canvassing in the days leading up to Super Tuesday, precisely targeted GOTV in high density neighborhoods, and a strong phone bank — is the kind of operation that the Obama campaign will have on the ground in every battleground state come election day.

During the primaries, I volunteered in five states:  South Carolina, Delaware, Virginia, Pennsylvania, and North Carolina.  With the exception of Pennsylvania (where I was assigned to the Hillary stronghold of Scranton), Obama had similar operations everywhere I worked.  In Virginia, for example, I helped manage a phone bank where 400 volunteers made over 35,000 calls in seven days.

Most analysts think the Obama campaign’s organizing efforts will net him two or three points in key states.  I don’t disagree.  But I think there’s also a very real chance that the margin it provides be even greater than that.

Come election day, watch the turnout in places like Gary, Indianapolis, Bloomington, and Evansville, Indiana; Columbus, Cleveland, Akron, and Toledo, Ohio; Pittsburgh, Philadelphia, State College and Scranton, Pennsylvania; and Detroit, Ann Arbor, Lansing, Saginaw, Flint, and Pontiac, Michigan.  The Obama campaign will try to win these cities by margins of at least 2 to 1 or even 3 to 1.

Somewhere on election day — perhaps Indiana, North Carolina, or Virginia — that approach will help Obama pull off an upset.  And that might end up being the difference between Obama becoming President or an also-ran.

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Every summer, Molly and I vacation in Michigan, where I was born and she spent her childhood.  Our main reason for coming back is that we still have family here, mostly in the thumb area.  Each time we leave, I’m sorry to go.  It’s a great place, with many wonderful people.  And the northern half of the Lower Peninsula, along with the Upper Peninsula, includes some of the most beautiful and unspoiled places in the continental United States.  We always make sure to spend at least a few days exploring it.

But sadly, much of Michigan is beginning to resemble a failed state.  Its primary economic engine, the Big Three automakers, is in free fall.  The mayor of its largest city, Detroit, is under multiple indictments and recently seems to be having a difficult time avoiding jail.

Last Wednesday, The Detroit News ran the following story:

One dollar can get you a large soda at McDonald’s, a used VHS movie at 7-Eleven or a house in Detroit.

The fact that a home on the city’s east side was listed for $1 recently shows how depressed the real estate market has become in one of America’s poorest big cities.

And it still took 19 days to find a buyer.

In fairness, the house was abandoned, foreclosed, and then gutted by looters.  But according to the story, two years ago it was the “nicest house on the block.”

One of the things I collect on Flickr are photos of Detroit’s current perilous state.  What follows are a few of the most striking and depressing ones.  All are via Flickr, used under a Creative Commons license.  Photographers identified under each pic.

Detroit Book Depository (tedguy49)

Tiger Stadium (Derek Farr)

Lee Plaza Hotel (Derek Farr)

Michigan Central Train Station (Derek Farr)

American Beauty Electric Irons (Derek Farr)

New Employee Entrance, Packard Plant (Derek Farr)

There are many, many more — abandoned Detroit is a popular topic on Flickr — I urge you to explore the subject further.

I know that I am guilty of parachute journalism here — I haven’t lived in Michigan (except for a year in college) since 1976 — and that I’m being somewhat skewed in my choice of photos.  I could just as easily have shown the Renaissance Building and other structures in the few blocks of downtown Detroit that are coming back.  But given the widespread devastation, those are more Potemkin Village than progress.

People have no idea just how much of a shell Detroit is these days. The city is still staggering from the ‘67 riots, which led to one of the worst white flights anywhere and decimated the economic base.  There are good people trying to make things better, but there are also lots of not-so-good people profiting from its misery.  Sadly, one, Kwame Kilpatrick, is the current Mayor.  That’s a tragedy, because when he first took office, it looked like he would start turning things around.  But in fairness to Kilpatrick, it’s not clear that he could have made a difference even if he had avoided getting in trouble.  With a rapidly shrinking tax base (although not many homes sell for a dollar, there are quite a few available for less than $500) and the Big Three in decline (and even if they survive, it’s likely not to be in Michigan), it’s going to be hard for anyone to succeed.

But it’s not just Detroit.  Michigan’s rural areas have some of the worst poverty north of the Mason-Dixon line (and just happen to be the only part of the United States outside the Appalachian corridor where Hillary got more than 60 percent of the white vote).  Some of its cities — Flint, Saginaw, Benton Harbor, Ypsilanti, Pontiac — are little more than rusted hulks.  In fact, with the exception of Grand Rapids, East Lansing/Lansing, Ann Arbor, Traverse City and perhaps Bay City and a few Detroit suburbs, most of the larger cities are a mess.

When I was a kid, my dad was the editor of The Saginaw News.  When we moved there (the summer of 1966), Saginaw was still a fairly prosperous city, with two major plants — Saginaw Steering Gear and Gray Iron Foundry (later Central Foundry) — providing a large number of people the chance to live a middle-class existence.  It was a tradition that everybody worked in one or the other at some point. My brother spent several summers working at one, and my then-brother-in-law started on the line and eventually ended up as an executive after GM helped put him through college.

But the automakers weren’t the only source of prosperity:  Wickes Lumber, a legacy of the years when Saginaw was one of the great lumber processing towns, remained a major employer, and several other large companies contributed as well.  The downtown was in fairly good shape, with several large department stores, including Morley Brothers and Heavenrich’s, as well as the Saginaw Hotel and the newspaper, serving as anchors.

By the time we moved to Ann Arbor (August 1973), the rot already was evident  There were multiple causes:  the 1967 Detroit riots (and 1968 riots elsewhere) caused many whites in the city to flee to the surrounding township; the first mall (Fashion Square) opened outside the city, leading many businesses to move out of downtown and leading those that tried to stay to fail; Wickes consolidated its offices elsewhere; and, of course, the energy crisis, which, combined with competition from Japan, began the Big Three’s long, slow decline (Central Foundry relocated in 1977).

Today, downtown is almost completely empty, most industries are gone, and only the continued presence of Saginaw Steering Gear keeps the city going.  That’s only one story.  Despite its occasional exaggerations, Michael Moore’s Roger and Me is a fairly accurate picture of Flint’s decline.  And there are far too many others.

Is there hope?  I don’t know.  Grand Rapids is prosperous thanks to a thriving office furniture industry (Steelcase, Herman Miller, etc.), and Ann Arbor remains not only a great college town, but also a burgeoning tech center.  Northern Michigan has some of the more prosperous areas in the state — Petoskey, Traverse City, Charlevoix, and Mackinac and Les Cheneaux Islands.  But those are mainly summer playgrounds for what’s left of the state’s super-rich.  Much more common are towns like Three Rivers, where the largest employer recently offered buyouts and relocation incentives in an attempt to significantly reduce its workforce.

There’s an old truism that if you want to know what the rest of America will be like in ten years, go to California.

But what if the real answer today is that you should instead visit Michigan?

Photo at top:  Derek Farr via Flickr, using a Creative Commons license

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So as I’ve noted, we’re in Michigan right now, and Molly, her mom, and I were watching the 11 o’clock news last night to learn the latest about Detroit Mayor Kwame Kilpatrick, who manages to get himself indicted, arrested, or jailed about every other day.  Then the commercials come on, and lo and behold, there’s that wrinkly white-haired guy’s Britney-Paris-Barack ad.

So even after all the mockery, the negative press, and the Paris response video, the McCain campaign is still running the ad.  It’s what, two years since the Berlin speech.  Do most Americans even remember that Obama went overseas at this point?

Did the ad buy predate the controversy?  Or are they that clueless?

Or Buddha forbid, does their research show it’s actually working?

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Vacation, all I ever wanted,
Vacation, had to get away
Vacation, meant to be spent alone not blogging…

Molly, Greta, and I head to the wilds of Michigan’s Upper Peninsula today.  We’ll be gone until midday Tuesday, assuming we’re not attacked by a Yeti or kidnapped by angry Yoopers still upset about Sufjan Stevens making fun of them.

I’ve scheduled a whole lotta love posts while I’m gone, so you should continue to be suitably entertained, amused, informed, and/or (most likely) constantly annoyed.

That said, should anything big happen while we’re gone — McCain picking Paris for VP, Obama falling moving further behind ahead in the polls, Olympic protests, war between Russia and Georgia, a coup in Pakistan, Dubya falling off his mountain bike — I may not get to it right away.  I’ll do my best, though.

Have a great few days, enjoy the posts, and I’ll see you soon.

Image:  MichiganMaps.org

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