Monday, December 8, 2008

Why the Public Doesn't Want to Bail Out Detroit

For months now, the American public has watched dollars flying out of the US Treasury to rescue businesses in the name of salvaging the US Economy. Billions upon Billions of them. It is politically correct to refer to this money as "taxpayer dollars" but, in fact, they are not. At least they are not the dollars of current taxpayers. No, by and large these are the dollars of the next and future generation of taxpayers.

But why quibble about that?

Isn't it interesting that when it is time to consider similar (though much smaller) bailouts for the Big 3 automakers, the public seems to have even less tolerance than we did for the likes of AIG and Citibank? Why is that when we know how big a job segment the car business represents?

Is it bail-out fatigue? Is it fear of passing a mountain of debt on to our children and on and on? Or is there something else at work here?

I submit that it is all of the above and, further, that the un-named "something else" is born of actual taxpayer experience, not something ethereal or hypothetical.

While relatively few Americans have had a personal relationship with Bear-Stearns or AIG, even Citibank or Merrill Lynch - those that have had a relationship with those companies generally report them as acceptable, if not great. On the other hand, lots of Americans have felt burned by one or more of the US automakers in their lifetime. Think of it this way - when was the last time you saw a disabled brokerage account tying up rush-hour traffic on a Friday afternoon?

Sure, there are GM fans out there, even some who don't get their livelihood from the company. My uncle was a "Ford-man" who proudly stood by the brand and its cars and trucks. Those people, like my uncle, are gone now. They have been replaced by millions of Americans who gave up on the Big 3 a long time ago and developed a relationship with Toyota or Honda or one of a dozen other foreign car makers who won their loyalty by a combination of superior quality and marketing savvy.

When my '92 Chevy died on Roswell Road some years ago, after less than 40,000 miles, I was not a happy camper believe me. Sure, I liked the car enough to spend money to fix it and drove it for almost 55,000 more miles, I never completely regained my trust in that car. And I haven't bought another American-made car since.

Is that fair to today's Big 3? Maybe not. But when it comes to buying something as big and mission-critical as a vehicle, the majority of Americans have been saying, "No" to Detroit for years. Changing our minds right now doesn't seem likely to happen. And, can you blame people?

Wednesday, December 3, 2008

Saxby Wins - What Does it Mean?

The nation watched, or rather a hardcore few of the nation watched the returns from Georgia last night. Would this be another Minnesota-style cliffhanger? A Florida-style hanging-chad affair? An Ohio-style "keep the polls open late so that the hundreds still in line at closing time can exercise their constitutional right to vote?"

Not so much, no.

Senator Chambliss easily defeated his Democratic challenger yesterday, winning by double digits in a runoff for the US Senate only made vaguely interesting by two issues: 1) the Democrats, until last night, held a slim chance of attaining a 60-seat majority in the Senate and 2) would the patriotic voters of Georgia stand up and reject the reprehensible politics used in 2002 by our Junior Senator in defeating war hero Max Cleland?

Not so much, no.

Despite the significant numbers of "Support the Troops" bumper stickers and car magnets to be seen along Georgia's highways and byways, Senator Chambliss' refusal to support the new GI Bill of Rights was just fine with Georgians. Despite unwavering support for the horribly mis-guided invasion of Iraq and subsequent bungling of the mission their, Georgians must be fine with it. I always thought that, among those for whom support for the military and for a strong national defense was a paramount issue, failing to support those things here was a political sin from which one cannot recover.

Not so much, no.

In his victory remarks, Senator Chambliss indicated his willingness to work with President-Elect Obama whenever he seeks to help everyday Georgians and fight terrorism. When, on the other hand, the new President demanded socialism (you know, redistributing the wealth like it talks about in the Gospels) he would proudly stand with his fellow obstructionists and say, "NO!". Should the President seek to "mess with" the 2nd amendment, Senator Chambliss and his buddies from the NRA will scream bloody hell (an apt metaphor, I think) and say, "NO!".

It will be interesting how long it takes for last night's declarations by the Senator for when he will support or oppose the incoming President to be violated. Well before inauguration day is my guess.