manfrommiddletown's blog

Why Japanese Automakers Support a Detroit Rescue Plan.

From what you read in the news, and hear from Southern GOP Senators, you'd think that this was a banner year for Japanese automakers operating in the US. Or at the very least that Toyota, Hyundai, and the other automaker "transplants," that is foreign auto firms producing in the US, are currently experiencing a bit of schadenfreude watching their long time nemesis GM on the ropes. But. It just isn't so. And here's why.

Foreign automakers producing in the US are perfectly aware that the destruction of the Detroit Three would only hasten a sharp decline in their own ability to operate, and profit, in the North American market. In order to understand precisely why it is that Sen. Shelby and his comrades have gone all quixotic seeking to kill off GM in the name of Japanese efficiency while their beaus running transplant factories in the South shake their heads, it helps to look at the work of Chalmers Johnson.

It's a Friggin' Christmas Miracle: Bush Comes through for the Auto industry?

It's a Christmas "Miracle", George Bush came through. $13.4 billion for the auto industry. Or maybe, not so fast. This is a stay of execution, not a pardon.

The troubled U.S. auto industry will receive emergency loans of $13.4 billion from the federal government in return for an extensive restructuring of its outstanding debt and labor costs over the coming year, according to administration officials.....

Funds for the loans will come from the Troubled Asset Relief Program initially set up to aid the financial industry. An additional four billion will be available in February.

But the money will come with some extensive strings attached. Though the White House will not appoint a "car czar" to oversee the industry going forward, the companies will have to restructure their wage agreements so that they are competitive with foreign automakers by the end of next year. In addition, by March 31 of this year the companies will have to show they are financially viable and able to repay the government -- a requirement that may, for example, force them to renegotiate outstanding debt and other agreements.

Be afraid, be very afraid. Although this money is going to push the industry through till March, a whole new set of challenges await the President-elect come March. First, let's set lay down a few facts to start the discussion.

The Big Boys Are Threatening to do..... What Hitler Couldn't Do

Is this the Winter of our Discontent?

During the winter of 1978-1979, the suspension of the right to collective bargaining by British labor unions lead to what was called the Winter of Discontent. Gas deliveries ground to a halt leading to shortages, blackouts became common, and in London trash sat uncollected for months. The labor activism of that period ended with the election of Margaret Thatcher, and the hollowing out of trade union power. God forbid that labor, the working class, have even a half of the power granted to capital, the men and women who live by the labor of others. Adam Smith was right:

EPI: If Big 3 Fail 18% Unemployment in Michigan

The Economic Policy Institute has a new report out today about the economic impact of an auto industry collapse. A previous report by the Center for Automotive Research (CAR)estimated that a total collapse of the big 3 would result in the loss of almost 3 million jobs, and $554.6 billion(4% of US GDP) in economic losses. What was missing was a state by state breakout.

Obama to Crack Down on Tax Evasion?

This should be fun. The incoming Obama administration has eyed a new revenue source to help defray some of the budget shortfall.

Cracking down on offshore tax havens.

President-elect Barack Obama plans to crack down on international tax havens, including Jersey, Guernsey and the Isle of Man, within weeks of taking power in January, putting him on a collision course with Gordon Brown.

There is growing international pressure to outlaw the secretive practices of tax havens as a key part of reforms to the world's battered financial system, as the leaders of the world's 20 most powerful economies gather for a major conference in Washington next weekend....

Russia, Iran, and Qatar to form Gas OPEC

Today's UK Guardian has an article about how Russia, Iran, and Qatar are forming a natural gas cartel rivaling what OPEC has done for oil.

The move by the three countries, which control 60% of the world's gas reserves, was met with immediate opposition from the European commission, which fears the group could drive up prices.

Alexey Miller, chairman of Russia's Gazprom, said they were forming a "big gas troika" and warned that the era of cheap hydrocarbons had come to an end.

"We are united by the world's largest gas reserves, common strategic interests and, which is of great importance, high cooperation potential in tripartite projects," he explained. "We have agreed to hold regular - three to four times a year - meetings of the gas G3 to discuss the crucial issues of mutual interest."

How the GOP Won the Working Class

Earlier this week David Sirota wrote what I think is the best column I've ever seen on an important topic in American politics: the role of class in American politics and how the GOP has been able to capture the votes of working class whites.  Let's be clear, it wasn't grand strategy by the Republicans that resulted in the white working class exiting the New Deal Coalition.  It was the utter arrogance of the gang of liberal elitists that have seized the mainstream party of the American Left from the working class.

Supporting the Aristocracy: Wall Street Pays Out $70 Billion + in Bonuses

I think that its fair to say that a number of us here suspect that a fair number of those populating the financial establishment are there by virtue of being the idiot children of America's aristocracy. Some of us have probably even said as much. This though is far less entertaining than watching one of their own come out and say it.

On Friday that's precisely what happened. Andrew Lahde, a manager at a Los Angeles based hedge fund sent an email out to all in his firm telling them that he was quitting the game and:

Another World IS Possible.

When written in Chinese, the word "crisis" is composed of two characters - one represents danger and one represents opportunity.

JFK-Remarks at the Convocation of the United Negro College Fund, Indianapolis, Indiana, April 12, 1959

Introduction

We live in interesting times. Times of crisis. Yet within that crisis lies opportunity.

In his book, Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century, Mark Blyth explains to readers that times of economic crisis are in fact times of opportunity.

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