November 26, 2008
Washington to Detroit: Drop Dead.
By Peter M. De Lorenzo
Detroit. The glee with which the Washington establishment - and every two-bit instant car “expert” who decided it was high time to weigh-in with his or her opinions - attacked Detroit and what’s left of the U.S. car industry last week was a sight to behold. Everyone from chief knucklehead Michael Moore to Neil Young (Neil Young?) got on the “Detroit Deserves to Die” bandwagon, adding to the chaos with their naively-crafted pop logic musings and “finger-snap” solutions.
It was truly pathetic.
Starting with the stunningly ill-informed members of the Senate and the House lead by that raging embarrassment Dick Shelby from Alabama, who heaped derision on Detroit and its CEOs for having the temerity to ask for a bridge loan to help them through the worst financial calamity to face America in seven decades - while he conveniently forgot to mention that he helped arrange for over $650 million in tax incentives and other prizes for Mercedes-Benz, Honda, Hyundai and Toyota to build facilities in his home state - to the gang of idiots who followed him while falling all over themselves trying to demonstrate how little they knew about the car business or about the Detroit that exists today as opposed to the Detroit they once read about in the 1990s, it was a beat down of epic proportions.
That actual facts about the U.S. automobile business and its role as an essential part of the manufacturing fabric of the country were in short supply in the rote speeches made by the representatives and senators - and except for exactly one, Representative Thaddeus McCotter (R - MI), they were totally predictable. And so was the piling on that ensued.
By the end of last week it was as if the domestic automakers were not only the scourge of the Western hemisphere but responsible for all known troubles afflicting this country at this very moment, its CEOs were idiots, we’d all be better off as a country if its founding city was just wiped off the American landscape along with the rest of the midwest, and gangs of citizens were assembling with pitchforks demanding bankruptcy for the Detroit Three. I was actually surprised that the mob mentality stopped short of demanding the heads of the CEOs from Chrysler, Ford and GM or anyone else representing Detroit on sticks - the loathing was so far off the charts and unwarranted.
It would have been difficult to comprehend all of this if had originated in any other city besides Washington, D.C., After all, this is a town whose very existence is based on cronyism, perks, earmarks, lobbyists and professional self absorption. But even that pales in comparison to the real pro sport in Washington, which is The Blame Game. The fact that these politicians made hay on the whole corporate jet angle was laughable, especially since one of their esteemed colleagues – Nancy Pelosi – caused a royal stink when she became Speaker of the House by demanding a bigger government plane so that she was able to fly non-stop back to California. That many of these politicians eagerly accept rides on corporate jets from various contributors and lobbyists was a story that was missing in the gathering chaos of the lynch mob mentality aimed at the Detroit Three CEOs, as if they were the only heads of corporations on earth who use corporate planes. And the establishment media, ever in search of a fifteen-second sound bite, found what they were looking for and dutifully reported that angle as the meat of the story.
Lost in all of this, of course, was the fact that the backbone of the U.S. manufacturing sector was on the ropes because of the worst financial crisis since the Great Depression. But nonetheless, the real issues at hand were instead drowned out by the verbal jabs and cackles about corporate jets, and the Detroit Three CEOs were sent packing, but not before they were admonished like little school boys and told to bring back a real business plan for their $25 billion, and to come back “better prepared” as President-elect Barack Obama chimed-in on Monday.
Oh really?
This after Citigroup, which only a month ago received $25 billion, was blessed with another $20 billion this past Sunday evening, and, as part of the plan, Treasury and the FDIC will guarantee against the "possibility of unusually large losses" on up to $306 billion of risky loans and securities backed by commercial and residential mortgages.
What, no hat-in-hand journey to Washington for Citigroup CEO Vikram S. Pandit so he could receive a good old-fashioned ass-whipping for bad management decisions, marketing risky financial instruments, failing to anticipate dramatic shifts in the market and piss-poor planning in general on live television?
No stumblebum senators and congressman tripping all over themselves to demonstrate their complete lack of understanding of the nation’s financial system or to criticize the fact that Pandit used the corporate jet to fly down to Washington?
No recriminations for Robert Rubin - the most prominent member of the Citigroup's board of directors and a former treasury secretary - who was one of the chief architects of the bank’s risky investment strategy, and who pulled down $62.2 million between 2004 and 2007?
And what about the go-along-to-get-along dimwits on the Citigroup board? The gang that J. Richard Findlay, head of the Centre for Corporate & Public Governance, described for the New York Post thusly: "Citigroup's board of directors increasingly resembles a first-class sleeping car on a train wreck that just keeps happening. Almost whatever it does, it is too slow and too late. It can take months for Citigroup's directors to clue into what others in the real world have known for some time."
And why does Citigroup merit bailing out again with no explanation whatsoever to the American taxpayers other than President Bush saying, "We have made these kind of decisions in the past. We made one last night. And if need be we will make these kind of decisions to safeguard our financial system in the future."
Oh really?
What’s going on is the activation of a New American Double Standard, one that goes something like this:
Washington to Detroit: Drop Dead.
Washington to Wall Street: Who do we make the check out to again?
Thanks to our representatives in Washington, an industry that powered this great nation into the future, which basically created a viable American middle class, and which created the Arsenal of Democracy so that the nation could be properly equipped to win WWII, has all of a sudden become a national punchline and a burden to the rest of the country.
An industry that’s responsible either directly or indirectly for one out of every ten jobs in the nation, an industry that’s inexorably linked with the manufacturing base of this nation and whose failure would send this nation’s economy reeling, was basically sent packing in search of a “plan” while Wall Street and the banking system was given carte blanche just for showing up.
How do we know that Citigroup won’t crash in a few more months and need even more money? And how will they handle their “emergency” need by then in the new “enlightened” Obama Presidency? By email?
What’s wrong with this picture?
Why is it politically more expedient to trash Detroit and the entire domestic automobile industry than it is to shine a harsh light on the glorified pyramid scheme that propelled Wall Street and the banking system to new heights – and now to horrific lows – while screwing over millions of Americans in the process?
The fact that President-elect Obama added to the criticism of the Detroit Three CEOs by echoing the same misinformation spewed by the senators and congressmen last week in Washington was not exactly an uplifting development either.
"We can't just write a blank check to the auto industry. Taxpayers can't be expected to pony up more money for an auto industry that has been resistant to change. I was surprised that they did not have a better thought-out proposal when they arrived in Congress," Obama said on Monday. "Congress did the right thing which is to say, 'You guys need to come up with a plan and come back before you're getting any taxpayer money.'"
Oh really?
But we – as American taxpayers - can expect to keep writing blank checks to mismanaged banks and failed Wall Street conglomerates, and be expected to “pony up” more money to an industry that’s resistant to change, with no thought-out proposals of any kind and no real “plan” in sight? How does that work, exactly, Mr. President-elect?
As if to back-pedal a bit, Obama added that, "We can't allow the auto industry simply to vanish. We've got to make sure that it is there and that the workers and suppliers and businesses that rely on the auto industry stay in business."
Oh really?
Then why is it - Mr. President-elect - that you’re endorsing the miserable performance put on by our so-called leaders in Washington last week? Why is it that you’re regurgitating the same tired inaccuracies about Detroit that we were subjected to for two days last week? Do your homework, Mr. Obama. Stop listening to the media or the sycophants you’ve already assembled and dig deeper into this Detroit “thing” before you start sounding like all the rest of the less than gifted in Washington.
Memo to the old and new Washington establishment:
A large number of American citizens are painfully aware of the hypocritical double-speak that’s currently festering in the halls of Congress and on the Senate floor.
A large number of Americans are tired of the now-tedious stereotypes and flat-out untruths being bandied about in Washington about an industry that’s vital to the long-term health and well being of the nation, an industry that actually creates and builds tangible hard goods, an industry that devotes $12 billion a year in advanced technical research that benefits the entire nation, an industry that is a fundamental part of the American industrial fabric, and an industry that employs millions of Americans all across this nation.
A large number of American citizens are tired of this New American Double Standard, where the financial well being of millions is being held hostage and being put at risk for the benefit of a few – with no explanation, no “plan” and no accountability whatsoever.
Detroit may be Washington’s whipping boy du jour, and our esteemed representatives may want to continue on with their witch hunt – what’s next, will they demand that the Detroit CEOs bring their college transcripts with them next time? – but they won’t be fooling anyone.
It’s not about what’s good for the rest of the country in Washington. It’s not about nurturing the American fabric, or protecting the foundation of our manufacturing base, or taking care of a productive national industry that creates real American jobs, or keeping the nation as a vital player in the global economy.
No, not even close as a matter of fact.
In Washington it’s about whoever is greasing the skids or blowing in a Senator’s or congress person’s ear just right. And the Motor City finds itself on the outside looking in.
Detroit might as well start writing its own obituary right now, because even if some sort of financial bridge loan package is grudgingly bequeathed, the strings and built-in entanglements are likely to choke the life out of the U.S. auto industry once and for all.
Thanks for listening.