A Few Choice Words

The Speech Obama Won’t Give on Healthcare Reform

Good morning, and welcome to one more in what seems our endless series of town hall Q&As. Yeah, they are kind of boring, even for me.

This time, instead of trying to field your very worthwhile questions, I’ll give you the answers in advance. Yup, I’m going to make a speech . . . and try to dispel some of the nonsense that’s obscured the real issues in healthcare reform.

First, let me tell you what I did wrong, though with the best of intentions.

Instead of coming up with a prepackaged reform program, like the Clintons did, I put forth some important objectives and left the legislative aspects up to Congress. This was clearly Mistake Number One. This time, I thought, Congress had to have the major role in the effort.

I should have realized that the committee process was the surest way to dilute all my major objectives into weak tea . . . or medications whose service dates have expired. HR-3200 has been called “an arrogant, tone deaf and yet oddly cowardly bill.” That’s exactly right. Sorry, fellow Democrats, we have got to do better.

Mistake Number Two: Instead of framing the issue in terms you folks could understand, I got wonkish and spoke too much about budgetary and legislative details . . . and not enough about what reform must accomplish. In my defense, I had trouble selling reform because there was no concrete plan yet to sell.

So we’ve spent the past month and more watching four Congressional committees give birth to four tepid markups, all of which are compromises with the big stakeholders: the insurance industry, the medical-industrial complex, their lobbyists, and the CBO. All of these have bona fide, convincing reasons for not reforming healthcare. Or, should I say, reforming it their way.

Mistake Three was trusting the Republican opposition to help me achieve a bipartisan outcome. Instead, they have gone on to attack every aspect of the reform measures that emerged. Everything from Medicare reimbursement to accusing me of promoting euthanasia. They call the bill fiscally irresponsible, when most all the costs are accounted for and paid in advance. This from the folks who passed George Bush’s tax cuts for the wealthy, which will balloon to a $3.9 trillion cost over ten years. Please . . . don’t get me started on these hypocrite bastards.

Just as they did in ’93-94, the other side is using every kind of scare tactic to kill reform. We talk about the benefits; they twist and distort the costs. We tell how insurers deny coverage; they accuse the government of rationing. They dodge or ignore the incredible inflation of healthcare costs and how that has come to dominate our economy.

Let’s be clear: You cannot work with people who have so little conscience and who, finally, are captive to the very forces they are supposed to regulate and govern. So here’s what we’re going to do.

We are going to draft a new healthcare reform bill that reflects the real needs and priorities of our nation. It will build on the eight-point bill of rights for consumers we released this week.

It will be designed on a single-payer model, after Medicare but embodying the lessons learned these many years in executing and managing that program.

It will address all issues of costs—front-end and back-end, present and future—in detail. We will pay for the program, not by a tax on the wealthy but by increased taxes on unhealthful products and activities, plus reasonable taxes on the healthcare industry, meaning hospitals, providers and big pharma. They can afford it.

These folks have seen fit to spend some $133 million on lobbying in just the past three months to defeat reform. And that doesn’t include money spent by professional associations like the Chamber of Commerce.

We will make clear that the new healthcare model benefits both the uninsured and those who have insurance; not only the under-insured and the insurance-denied, but the folks who are being made insurance poor.

I will make this case to the people, not just to unify our party in support of fairness and equity but because it’s so clearly the right thing to do. Liberals, Blue Dogs, all of us have got to stop fighting over details and come together on principle.

This will be a grass-roots campaign and a new start for the kind of real healthcare reform we all need and deserve. Yes, it will take more time, but remember, I told you change was our mantra.

Thank you.

Thoughts on Health Care and Mr. Obama

You have to congratulate him for trying. Some of us were there the last time around, and it wasn’t pretty. So it’s hard to see him making some of the same mistakes the Clinton people (I was one of them) made, despite his efforts to avoid them. And, since 1993-94, there are new potholes that have opened up.

The first pothole is the overarching push to provide universal coverage, something next to impossible without a single-payer system. The second is the failure to properly address issues of cost and cost savings. Cost, value and rationing were the issues least discussed in ’93-94, and they are only now getting to the table. The third pothole is leadership, which the Clintons didn’t provide, and from which Mr. Obama has so far demurred.

He blew a big chance last night by failing to step up and tell the public: a) that this was his health care reform effort, not Congress’s to play games with; b) that he would not accept anything less than full cost accountability on the principles of reform he has outlined; c) that his party has failed him by providing a messy, superfluous bill full of window dressing that fails to address the real issues.

Mr. Barack is ever the cool customer, Mr. RationalCool, the one who looks askance at the mud wrestlers. Some of us want to see him taking sides for a change, kicking some Republican ass and laying out the steps needed to get the health care system to change. Stop tinkering with the plumbing. Some of us also want to see him stop handing the substantive decisions over to the Speaker of the House.

What’s Wrong with HR3200?

Everything. Congress needs to start over. The Health Care Blog has been running some commentaries on it lately. Here’s Jeff Goldsmith:

HR3200 is an arrogant, tone deaf and yet oddly cowardly bill that creates, among other things, a Health Choices Commissioner to help us with our health choices.  Its message to the voters seems to be, as David Brooks put it, “98% of Americans can party on, with the latest and costliest health care imaginable, no matter how ineffectual, and the top 2% will pay for it all."

Just as she did with her “stimulus” pork fest back in February, Pelosi has created a huge problem not only for Obama, but moderate Democrats in her own chamber. Not only does the bill, under the best of circumstances, still leave nearly 17 million people without coverage. It will greatly handicap any chance for recovery in our country’s ailing economy.

The worst thing about HR3200 is its cost shifting of financing onto the backs of business, tying health care even further into the employer mandate. Politically, this could be a replay of 1993-94 when the National Federation of Independent Business and the Chamber of Commerce drew their long knives to finally kill reform.

After the CBO came out with its assessment that this bill contained no real long-term cost saving, Dr. Albert Waxman wrote that there are better, viable solutions on the table:

1. The Wyden-Bennett “Healthy Americans Act” to make people more accountable for their own health and health insurance.

2. Proposals that remedy the inefficient and poor quality associated with the treatment of the chronically ill and excessive re-hospitalizations.

3. Promising approaches in designing Value-Based Benefits that effectively lessen chronicity, improve quality and stimulate compliance and adherence to an individual’s care plan.

Why are we not hearing about and considering these concrete approaches? Why are our elected officials so intent on a “quick-fix”? We know that a quick fix is just that. We must have a systemic overhaul. Systemic overhauls require expertise and thought, not haste.

And why has single-payer not even been considered? If Obama had come out strongly for it (he admitted it was the best solution but not “achievable” politically), he would be no further behind the eight-ball than he is now with an indefensible bill on the table. If you really believe, as some Republicans have suggested, that the “public option” is just a stalking horse for single payer, you haven’t understood how intimately reform is tied into the whole economy, not just service delivery.

Last night the president spoke about how important reform was to this economy, one-sixth of which is health care. What he didn’t discuss is how the climate for reform is getting worse—because of the political debate and the severe compromises this bill represents.

Here’s Goldsmith again:

If I were Tom Daschle and Peter Orszag, I’d barge my way into those political meetings, and help their President salvage this thing. Way more savings need to come from the health system itself (50% isn’t enough), particularly from the rich matrix of subsidies and inappropriate incentives which sustain the industry’s inflationary cost curve, and the tax burden needs to be spread across consumption, particularly unhealthy consumption, and removed from the wage base. Health insurance also needs to be much more affordable for ten million uninsured young people, or they’ll simply blow off the individual mandate and remain uninsured.

Mr. Obama says he disdains the way politics impinges on reform, but he in fact is playing politics by taking the laissez-faire, hands-off approach. If he doesn’t commit to real reform and real leadership, we can write yet one more chapter in the history of failure. He’s given himself another five months . . . maybe.

Kind of Says It All, Doesn’t It?

Pelosi’s ratings, says Gallup, are down eight points since November, and in fact “Cheney may be less problematic for his party than Pelosi might be for hers.”

Dems should be glad that 2012 is not around the corner.

Sotomayor, La Mejor

“I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn’t lived that life.”

The judge said that in 2001 at a UC-Berkeley conference on Latinos in the judiciary. For that utterance she has been called a racist, asked by Newt Gingrich to withdraw, compared by Rush Limbaugh to David Duke, the Ku Klux Klanner. The resulting furor has caused some conservatives (Charles Krauthammer, Sen. John Cornyn) to protest the name-calling. Others sought moderation. Some have gotten angrier.

The White House, instead of defending her remarks, said (per Press Secretary Robert Gibbs) that it was a poor choice of words. In fact, her words were meant to be inspiring to her audience and reflect the reality of racism on the bench. The President and Mr. Gibbs should have stood by these remarks and Judge Sotomayor’s “wisdom” and “richness of experience” instead of caving to the predictable response on the right.

In their desire for consensus, the Obama folks sometimes get carried away. Of all people, Sonia Sotomayor doesn’t need their reinterpretation of her clear statement.

A “despicable, dishonest and vicious political effort”

Thus spake former House Speaker Newt Gingrich on current Speaker Pelosi’s recent statements. He and the Republican cohort (it’s not a party any more) are steamed about Pelosi’s inconsistent statements of when she learned about waterboarding and her assertions that she was lied to (“misled,” she later called it) by the CIA briefers. Newt calls that duplicity and, of course, the cohort has been quick to rise to the occasion. 

So a big Washington row is brewing between Mme Pelosi and those defenders of truth, justice and the Republican way. Cheney has come in as public defender of his administration’s achievement in “keeping the country safe,” though no one can say whether their efforts produced that result. The use of enhanced interrogation techniques saved perhaps “hundreds of thousands of lives,” he maintains. Which, you know, begs the question of whether torture should have been used at all. So you have the pragmatists versus the moralists. 

Most but not all Dems are lining up behind Pelosi, and the White House wishes this would all go away. CIA chief Leon Panetta is in the middle, but Friday came down hard on the Speaker’s charges.

Frank Rich thinks all the photos of prisoner abuse will emerge or be leaked, despite Mr. Obama’s latter-day decision not to release them, something Rich found a futile gesture. But Obama was absolutely correct in reversing course—commentators like Katrina vanden Heuvel (right) to the contrary notwithstanding. Her Sunday babblings on George Stephanopolous’ This Week are becoming so shrill and partisan that some left-wingers like myself can’t hear them anymore without retching. Honestly, much of what Liz Cheney said made more sense. 

I think the old-line party positions are clearly dissolving under pressure of potent new realities—political, military, and economic. So the stance of people like Pelosi, attacking the Bush torture policy without reference to the fact that she and many of her cohorts failed to protest them at the time, is full of hypocrisy and, maybe, misprision. The LA Times spoke out on this today.

The fact that she herself incited this row with her ill-prepared, nervous, stuttering press conference shows that she will neither follow the White House lead nor face the need for transparency that she and her supporters so often proclaim. 

I think her days as Speaker are numbered, and that’s a good thing. Mr. Obama and the country want to move beyond this sort of rank partisanship. Let’s have a truth commission in which Ms. Pelosi can testify as to her own clean hands. She and too many Democrats let the Iraq venture proceed without a peep. They became accessories to a wretched policy for which they now demand accountability. 

Where were you guys when the rest of us were marching against the coming war?

Mr. Gates . . . and All That Money

In a rather silly Newsweek piece entitled “Is Robert Gates a Genius?” Fareed Zakaria wrote that Gates’ budget proposal for the Pentagon has gathered all the “right” opponents (Senator Imhofe, R. Ok.—a man of astounding ignorance—the defense contractors, Beltway consultants). Which means that he must be a genius, according to Jonathan Swift, the great 18th century satirist: “You may know him by this sign; that all the dunces are in confederacy against him.”

It’s totally inappropriate to define Mr. Gates this way. He has done an admirable job at Defense, I think, yet his latest budget proposal isn’t really going to upset the suits from Lockheed Martin. He took away their F-22 but continued the F-35, and this game has been going on since at least 1991 when the F-22 was contracted. Both should have been dumped.

President Obama recently trumpeted his proposed budget cuts of $17 billion, which comes to less than half a percent of the total, as the Repubs cheerfully pointed out. Congress will likely kill the half of that which Defense contributed. Maybe Obama felt he couldn’t demand more in light of his upcoming requests to Congress for domestic dollars, e.g., health care. But he lost a major reform opportunity.

It isn’t enough to kill the F-22 Raptor, though that decision was to Mr. Gates’ credit. There’s also the F-35 Joint Strike Fighter. The 2010 budget commits to buying some 2,456 of these at a final projected cost of around $200 million per copy. We’re still going to have a token force of 187 F-22s, costing $350 million apiece.

According to those who study such matters, both planes are headed for obsolescence if not irrelevance. They have numerous Achilles heels, design and performance problems, largely owing to the insane procurement programs which have permitted contractors to commit to production without flight testing. Cost overruns have been enormous for both. The full story is here.

Three years ago I worked in Public Affairs at NAVAIR, the Navy’s aircraft procurement and testing command. There was much hoopla about the F-35 and its “transformational” abilities. Yet, three different versions were designed (one each for the Air Force, Navy and Marines), all had problems, and the cost questions were consistently glossed over. We had enough to deal with in deflecting problems suffered by the tilt-rotor V-22 Osprey.

The big question, of course, is whether we are going to continue to let our defense programs dominate the budget, not only in times of stress but as far as the eye can see. The true figures of what we spend are genuinely appalling. And even with these expenditures we can’t figure out how to fight the wars we’re in (or defend against pirates). The system has grown so complex and deep-rooted that even Mr. Gates’ good intentions to reform it seem impotent.

Winslow T. Wheeler’s recent eye-opener in Politico is an accounting of the real costs of national defense. He starts with the Pentagon’s $534 billion budget request in February, adds $6 billion in “mandatory” personnel expenses, $130 billion for the Iraq and Afghanistan wars, $22 billion for DOE’s nuclear weapons requests, $106 billion for the Veterans Affairs “human costs” for taking care of our soldiers, $43 billion for Homeland Security, and on and on, including the DOD’s share of our national debt interest payments.

The grand total comes to $974 billion—the real per-year costs of defense. As Mr. Obama said in describing his relatively puny budget cuts, "Even by Washington standards, that should be considered real money."

Dim-Witted Leaf-Eaters

Jim Fassett, a credentialed dinosaur hunter, has discovered that some of the creatures may have lived on past their presumed time of extinction. After digging in the San Juan Basin near the Colorado-New Mexico border, Fassett maintained that

a sizable population of ceratopsians and sauropods, a class of giant, dim-witted leaf-eaters such as the brachiosaurus, hung on for another 500,000 years in the basin. "There might even have been some T. Rexes, based on some teeth we found," Fassett said in a phone interview Thursday.

All dinosaurs were supposed to have been wiped out in the Big Cataclysm 65 million years ago when an asteroid clobbered the Yucatan. The fact that some may have survived surely suggests that other species, like our modern birds and crocodiles, also have Cretaceous ancestors.

The Republicans are part of this strain, though they are clearly threatened with extinction owing to their frantic, fratricidal desire to consume their own. These dim-witted leaf-eaters continue to blame each other for their difficulties while failing to demonstrate any kind of adaptive behavior that would enable their survival.

They are now feuding about who’s responsible for the Specter defection even as Michael Steele and the RNC self-destruct. It’s like the end of Jurassic Park, where the dinos attack each other and the humans flee by helicopter. Maybe in the next version, Newt Gingrich will play T. Rex and we can abandon them all on an island.

I Have Seen Arlen Specter Naked

Not too many people can make that statement. Back in the ‘90s when I lived and worked in DC, I joined the Capitol Hill Squash Club to work out. In the locker room I’d encounter such notables as Specter, David Boren (the former Oklahoma Senator) and others. From time to time, I would chime in to their political (and other) discussions.

Specter didn’t look too good undraped, but who does? He doesn’t look too good now in the eyes of some Republicans after the Big Switcho yesterday. But you could say, watching the press conference, that he didn’t hesitate to bare his soul about what caused him to change parties.

After all those Senate years, the guy doesn’t want to quit by losing the next Pennsylvania primary. And he has the public service twitch, still. And, “his party has left him.” The switchers all say that, don’t they? I think these reasons are all valid, and Specter is nothing if not a pragmatic politician.

Will he help the Dems? It’s hard to see this prickly pol voting the party line, so the 60-vote majority still doesn’t mean that much. Still, his defection should give the Republicans great pause, for obvious reasons. As Politico pointed out, Specter is the last in a line of big-city Jewish liberal Republicans, like New York’s Jacob Javits.

But, we can predict, he won’t be the last to leave the Party of No.

Shake, Rattle and Rale

Bron-kidis, Lenny Bruce called it, the “un-hip, poor and Jewish” disease. In French it's la bronchite, much more elegant. Bronchitis makes you feel, well, pathetic—not least because of its sounds called rales, those rattles and assorted noises in your chest when you exhale.

I would guess it's like a very mild version of what a person undergoing waterboarding must experience. You can’t get your breath, you cough constantly, and there are those delightful sound effects.

The vile stuff revealed in the torture memos must somehow be expelled, like phlegm from a “productive” cough. And understood. So we’ve got two Senate committees, the Justice Department and others doing their diligence. And then what?

There seem to be two ways to go, beyond the rationalizing and apologistics we hear from the Republicans. Friday’s Washington Post editorial takes the position that prosecution, way down the road in any case, should be out of bounds. It argues that our political system cannot, should not

criminalize decisions authorized through all the proper channels, with congressional approval or at least awareness, for what everyone agrees to be the high purpose of keeping Americans safe from terrorist attack. Once you start down that road, where do you stop?

Paul Krugman says, predictably, that we need prosecutions “for the sake of our future.”

It’s hard, then, not to be cynical when some of the people who should have spoken out against what was happening, but didn’t, now declare that we should forget the whole era—for the sake of the country, of course.

Sorry, but what we really should do for the sake of the country is have investigations both of torture and of the march to war. These investigations should, where appropriate, be followed by prosecutions—not out of vindictiveness, but because this is a nation of laws.

Emotionally I stand with Krugman, but it’s pretty clear that Obama is too smart and too good a politician to put the country through that kind of trauma. And as the Post says, too many stood by and let the torture happen. Seeing Dick Cheney in the dock would do more than provide that sanctioned frisson of revenge some of us crave; it would likely tear the country apart.

Let him go back to Wyoming and cower in a duck blind until the next attack of bronchitis carries him off.

Easter White

While there are millions of darker-skinned people who celebrate this holiday, Easter has always seemed to me the most quintessentially white-bread and ridiculous of religious extravaganzas. I mean, Christianity was, if not in origin, a white religion imposed on conquered tribes, and so its customs and observances remain.

After the Virgin Birth, there is nothing quite so staggeringly miraculous as the spectacle of Jesus rising from the dead three days after his crucifixion to sit at God’s right hand, promising to return to the living once more as the Messiah of the Last Judgment. This Event is one tough pill, even for some devout Christians, to swallow. The Bible anticipated the difficulty:

If it is preached that Christ has been raised from the dead, how can some of you say that there is no resurrection of the dead? If there is no resurrection of the dead, then not even Christ has been raised. And if Christ has not been raised, our preaching is useless and so is your faith.

—1 Corinthians 15:12-20

Easter has come to mean cute bunnies, colored eggs and baked ham for the masses—at least in this country. I just returned from the supermarket in Gardiner, Maine, where I live, to find our white-bread population checking out with lilies and sprayed bunches of flowers, florid Easter cards, egg baskets—the whole megilla. Hams were springing off the shelves in the meat department.

A friend writes from Chiapas, in Mexico:

It's Semana Santa and everything's closed. I saw Jesus dragging a heavy wooden cross yesterday, preceded by Roman soldiers on horseback with helmets, capes, the Roman garb todo. Jesus was being whipped, etc. etc. The night before we went to visit seven churches, people crying over bloody effigies of Jesus. They do have faith, I'll say that.

They sure do, and theirs may be the most remarkable in the entire Christian world. These beautiful, dark-skinned people of Chiapas, descendants of the Maya who suffered and were nearly exterminated by the brutal Christian Spaniards—how to account for their taking up the religion of their conquerors with such fervor? To me that’s more miraculous than Christ’s resurrection.

Why has Easter become so totally white-bread and devoid of meaning in this country? Why is it so fundamentally silly? Maybe because it’s the ultimate test of whether you can believe in miracles, and most people would rather eat ham.

The Jews are celebrating Passover this week. That holiday is about eating bitter herbs and symbolic foods to mark the Exodus from Egypt, something I could almost buy into.

Posts from CarGurus on the Auto Industry

Here are two posts from my other blogsite, www.cargurus.com/blog, that have to do with recent tumult in the car industry and my reactions to it. For current and stimulating car talk, please check this site out, rant, leave comments, or just leave in disgust. I've done all of these, but it's fun writing about cars and this is a good forum. Thanks!

Obama's Challenge to Think Big

In the aftermath of the president’s speech to Congress, we’re hearing a lot of praise and a lot of skepticism. Maybe both are in order. On the whole, the speech was masterful—in part at least because of its tone, welcoming engagement from the opposition:

And while his program is certainly open to criticism, he made clear that he would rather engage critics than simply defeat them. He attempted to be the grown-up in the room, willing to accept responsibility and prodding others to do the same.

What struck me most was Obama’s willingness to deal candidly with the challenges that have angered and frightened so many. Regarding the auto industry:

We are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win. Millions of jobs depend on it. Scores of communities depend on it. And I believe the nation that invented the automobile cannot walk away from it.

The actual agenda for the car industry has yet to be written, much less fought over, and so it will take time for those who are fed up with Detroit to see beyond their desire to punish it. Their case is similar to public anger toward Wall Street and the bankers. As much as they are to blame, we as buyers, investors, dupes, and fools were the great enablers. There were few outcries or grassroots moves to stop them.

Regarding the auto industry collapse, we, too, can take plenty of blame—for wanting and buying bloated and inefficient Detroit cars for so many years and enabling the industry’s business-as-usual practices.

Obama has very big plans. He proposes a synthesis that will incorporate more than fixing the banks and the auto industry. To reform energy policy, health care, and education will be to make short-term stimulus fixes stick. To reform the auto industry will require that these other, larger challenges be met. That is surely true as far as energy and health care are concerned. There can be no new auto industry without tackling those issues.

Whether the public and the Congress will accept Obama’s grand design remains to be seen. But his demonstration of how these problems are interlinked was a great service.

Do you think the speech conveyed real hope for the auto industry? Or was it just “kind words”?

—jgoods

Wake Up, Folks, We’re Going to Have an Auto Industry

My compadre tgriffith got all steamed last week about the chintzy buyouts GM and Chrysler have offered their workers. For $20,000, much less than one year’s pay, and $25,000 toward an already-depreciated, devalued car, GM workers sign over their rights to receive all retirement and health care benefits.

The company wants to shrink the number of its long-term employees, since it pays far less for new ones. Well, would you take that offer if you knew there might be a bailout coming? And why would you take it anyway?

One year ago, GM was offering its entire hourly workforce buyouts of $140,000 for those with 10 years of service or more, $70,000 for those with less. Buyout offers have been a fact of life in the car industry for years.

A Little History, Please
Those who commented on tgriffith’s post, with the exception of Randy, have no idea how the auto industry works, much less the UAW. They don’t know that both company and union are carrying $47 billion in retiree health care costs, and that is the biggest obstacle to an agreement right now, the union having given way on most issues since 2007. New workers at the Big Three and the transplants are paid roughly the same.

Detroit has a 70-year history with its workers, whereas the transplants in this country virtually just arrived. In better times, the UAW and the Detroit companies made expensive and expansive deals each is having trouble living up to now.

The larger point is that everyone knows President Obama is committed to having a viable auto industry, and he has created a task force of his top economic advisors to bring that about. Messrs. Geithner, Summers, Bloom & company will have their hands full, but they aren’t stupid people.

Through bankruptcy, formal or informal, the companies will get remade and restarted. Wagoner, Nardelli, and their top brass will go, many jobs will be lost, and you and I will pay for it. Why? Because the alternative is much worse.

Four Big Potholes Ahead
I see four very big economic problems that will have to be solved. If not, you’ll see the much worse alternative. I’m not even looking at the energy side, which may or may not give us the new cars we all like to write about.

U.S. automakers and their dealers are swimming in inventory, and the problem will get worse. With sales tanking and factories still producing, though at a lower rate, inventories will grow this year. Nobody sees demand increasing enough to catch up for a long time. Prices will continue to drop, including those for hybrids.

Health care costs are at the root of much of the cost problem for the industry and the nation. With retiree benefits cut, unions have assumed more and more of the health care burden. With fewer employees, they will have less clout and may even cease to exist. We desperately need a national health care policy that will spread the risk, cut the costs, and reduce the advantage the imports have.

Finally, there are two other predicaments we have often written about here: one, the expensive and inefficient dealer network and other structural problems in the industry, like its enormous fixed costs; and, two, the supplier network which serves all car manufacturers. A cascading failure of suppliers could well bring down all the companies, foreign and domestic. And another million jobs would be lost.

So, we're looking to the feds and Mr. Obama’s people to come up with brilliant (or at least workable) solutions. To solve these massive problems, there will have to be fundamental reform in the industry, and that means a kind of bankruptcy or “reorganization.” The costs may not all be borne by taxpayers. There has been recent talk about other financing options, maybe the banks, maybe foreign companies. One China firm was reportedly talking to Chrysler, though the firm denies it.

Bottom line: Let’s start thinking about how to help the industry survive. Worker buyouts aren’t the answer. (If they were, why didn’t more folks take them?) Besides, we may all be getting a very nice discount voucher on a new car soon.

Would a $10,000 discount on a $30,000 U.S.-made car or truck tempt you?

—jgoods

Click here for some interesting commentary on the above piece.

Update

We just got word that Ford signed a deal with the UAW permitting the company to substitute its stock for up to half the payments owing into the health retiree fund (VEBA), subject to member and court ratification. For Ford, that comes to $13.2 billion.

This effectively means that GM and Chrysler will follow suit—something they had been hoping to achieve in their talks. I think Ford beat them to the punch simply because they are in better financial shape. The union would be crazy to offer this deal to their competitors, who are edging ever closer to bankruptcy. It’s like buying health insurance from a firm that’s sure to go under.

But they will probably make this final concession in order to get a deal from the Feds.

What should happen, as I said above, is universal health care, but that’s impossible in the urgency that faces the industry now. Maybe the government will backstop the union, as it seems to be doing for the banks, so as to take the health care burden off their back when and if times improve.

As some wag said in a comment on the NY Times story, “I wonder if the Ford stockholders, management and board would ever accept a deal similar to this for their families' future?”

GM shares rose from their lowest since the Great Depression to $1.84 today.

Stimulus, Ah Um

This is for all you Latin fans out there who remember the name of Charles Mingus’s 1959 album, Mingus Ah Um. Easily one of the great records in jazz, Ah Um brought a new exuberance and spontaneity to the music. It referenced Bird, Duke, Lester Young and Jelly Roll Morton and used them to create a new synthesis called Mingus.

The much debated stimulus package, absolutely nothing like Mingus, has generated little enthusiasm, no exuberance and an awful lot of stupid commentary. We have heard no new voices worth hearing, just old flatulizers like Lawrence Kudlow, whose only claim to fame was that he worked for OMB in the Reagan years and has a TV show. An inveterate supply-sider, Kudlow was still a strong Bush fan as late as last year (2008) when he denied there was a US recession.

I read one of his columns the other day and immediately thought of Orval Faubus the Arkansas governor, the guy who blocked the desegregation of Little Rock High School. “Fables of Faubus” from the Ah Um album was a biting ridicule of the governor, making him musically into a kind of Stepin Fetchit vaudeville clown.

I wish I had it in me to do that for Kudlow. As it is, we’ll have to let the man’s words speak for themselves. Here’s a guy who not only stands in the door of progress (think George Wallace) but has learned nothing over the past eight years.

Meanwhile, there's no shortage of alternative tax proposals that would truly re-ignite the economy. Former Ronald Reagan and George W. Bush economist Larry Lindsey criticized the Democrat package in Wednesday morning's Wall Street Journal, describing it as "heavily weighted toward direct government spending, transfers to state and local governments, and tax changes that have virtually no effect on marginal tax rates." Instead, Lindsey proposes a big payroll tax cut that would slice three points off the rate for both employer and employee.

Rush Limbaugh also made an appearance in the Journal. He has a clever idea to give Obama 54 percent of the $900 billion package -- equating that amount to the new president's electoral majority -- while 46 percent, which was John McCain's electoral tally, would go to a plan that would halve the U.S. corporate tax rate and provide a capital-gains tax holiday for one year, after which the investment tax would drop to 10 percent.

Lindsey, you may remember, helped create Bush’s $1.35 trillion tax cut plan. Limbaugh, like Gov. Faubus, is a buffoon whom some Republicans think is "clever." Kudlow, you'll note, will endorse anything as long as it’s a tax cut.

Thinking About Blago and Bush Two Days Before the Inaugural

There are great stirrings of hope in the land. People are abuzz with talk of historical significance and change. And this is as it should be. We don’t get such a confluence of events and personalities more than once in a lifetime.

Yet the context for hope is always determined by fear. And our belief in Obama’s ability to restore our economy and our country takes its power from the depths to which we have been led since 9/11 by the wretched administration of George W. Bush.

In a time of great anticipation like this, it’s tempting to say forgive and forget, which is what the President-Elect seems disposed to do. This is good politics and part of reaching across the aisle. It would be loutish to sound the note of recrimination and accountability when you are trying to build a broad spirit of reconciliation.

Well, I guess so, but at some point there needs to be accountability if only to understand how the train went off the rails. NTSB investigates the Hudson River airline crash not to point fingers but to make future flying safer.

The end of Bush’s term has seen an efflorescence of scandal, thievery, corruption and mismanagement personified in truly amazing characters like Bernard Madoff and Rod Blagojevich. It’s like turning over the rock and watching the bugs scatter. With only two days left, any forthcoming Bush pardons will turn another stone. Who will be the next Scooter Libby to get off?

Anyway, George has a lot in common with Governor Rod. If their styles are different, their fundamental narcissism unites them. One fixates on his achievements, as in the Farewell Speech; the other screams if he can’t find his hairbrush. Here are some typical symptoms; you be the judge:

• Overreacts to criticism, becoming angry or humiliated
• Uses others to reach goals
• Exaggerates own importance
• Entertains unrealistic fantasies about achievements, power, beauty, intelligence or romance
• Has unreasonable expectation of favorable treatment
• Needs constant attention and positive reinforcement from others
• Is easily jealous.

Compared to the president’s accomplishments (war crimes, torture, spying on citizens, last-minute regulatory rewrites, the usual list), the governor’s “high crimes and misdemeanors” pale in comparison, as some have noted. But Rod’s ambition clearly surpasses GW’s, and he’s an easy target.

It will be very much tougher to bring George & Co. to the bar of justice. But Congress still needs a serious investigation at some point with some serious consequences to result. Yesterday, Paul Krugman presumed in a lengthy Rolling Stone article to advise Mr. Obama on a number of policy matters. He claimed we need a full accounting of what the Bush administration has done:

Not a witch hunt, maybe not even prosecutions, but something like the Truth and Reconciliation Commission that helped South Africa come to terms with what happened under apartheid. We need to know how America ended up fighting a war to eliminate nonexistent weapons, how torture became a routine instrument of U.S. policy, how the Justice Department became an instrument of political persecution, how brazen corruption flourished not only in Iraq, but throughout Congress and the administration. We know that these evils were not, whatever the apologists say, the result of honest error or a few bad apples. . . .

The present economic crisis casts a pall over everything. But let’s not forget, in celebrating a hopeful future, how we got here.