When Good News Is Bad News

A few more glimmers of hope are shining through the clouds that have enveloped our economy for far too long. These little bits of good news are clearly bad news for Republicans.

The recent news includes:

--A nearly four-year low in first-time claims for unemployment benefits.
--A rise in new home construction to start the year.
--A rise in consumer confidence, even among those still without jobs.
--Hefty profits in the auto sector, including a record $7.6 billion by GM, along with large profit-sharing checks for their employees.

Yes, there is bad economic news out there, too, and the recovery could be faster, but the good news is welcomed by most people. The exceptions? People like the remaining candidates for the Republican presidential nomination who are now making appearances in the state in advance of the Feb. 28 primary. Mitt Romney, for example, has the task of explaining why his prediction that a rescue of the auto industry would be its deathknell was so wrong.

While Romney does his explaining, GM and its employees will be paying taxes to Uncle Sam and the state of Michigan on profit and income that wouldn't have existed were it not for the rescue.

Bonuses Not Just Good for Auto Workers

The recent news that workers for Chrysler and General Motors will receive bonuses is good news for everybody.

Who knows exactly what the hourly workers will do with their bonuses. Since GM workers aren't getting raises, some might feel compelled to just sock the extra money away. But I'll bet at least a few of them spend a few dollars celebrating -- a nice dinner out, new clothes for the kids, or whatever. And of course they'll pay more state income taxes than they would have otherwise, helping the state's bottom line.

A lot of the money will find its way into the coffers of conservative business owners who are mad that the companies are still in business and that the workers still have jobs. So will they have the courage of their convictions and tell the autoworkers to keep their money and take their business elsewhere?

Michigan Looking Good in Super Bowl Ads

Michigan companies took advantage of the Super Bowl to put themselves on a big stage, and none more so than Chrysler.

Chrysler's spot featuring Eminem and the new Chrysler 200 Sedan was spectacular. The visuals built to a nice climax, the "Imported from Detroit" tag. And what a contrast to that wimpy, generic ad for BMW, bragging about making cars in Spartanburg, South Carolina. Nice that a foreign country has hired some locals to put their cars together. Chrysler's message was we design them here from the ground up. And we have for a long time.

Chevrolet's ads also were impressive. The pickup ad was clever, the ones for the Chevrolet Cruze, especially the one featuring the Facebook status update app, marks the car as appealing to young people. The ads definitely show that General Motors finally has moved away from its stodgy advertising of the past.

Ford's ad on the Focus race is one I'm not sure about. I didn't learn a lot about the product, but if it succeeds in drawing people to the website to follow the race, it could pay big dividends down the road.

Overall, I was a little overwhelmed at all the ads for movies about being invaded by aliens that seem to be on the verge of being released. I got tired of all the Fox promos for the network's shows. The Doritos commercials were a little creepy. Bud Light's commercial featuring the dogs at the party was cute.

And the game, yeah, that was really good, too.

It's Not Socialism vs. Capitalism

Republicans would have us believe that until President Obama was elected, the U.S. was a capitalist economy, pure and simple, and ever since then it has become a socialist republic, a la the former Soviet Union.

Never mind the fact that the bank bailouts they despise happened under George Bush, in 2008. Details, details.

But the fact is, even before that, the U.S. economy was a mixed economy, not purely capitalist. Business had become intertwined with government in many ways -- from businesses that depended heavily on government handouts, dating back to the construction of the transcontinental railroad in the 1860s, to the military industrial complex that began growing in the 1950s, and on and on.

This pure capitalism vs. pure socialism argument has lately focused on Ford Motor Co. being held up as an example of a company that rejected government help, in contrast to General Motors and Chrysler.

Of course, the truth is that Ford Motor Co. itself would have faced dire straits had GM and Chrysler shut down. Since Ford shared many suppliers with GM and Chrysler, those suppliers would have likely gone out of business and threatened Ford's survival. That's why Ford supported the government aid for its cross-town rivals.

Now there is more proof of Ford's lack of purity. The news that GM has dropped its application for a $14 billion loan from the Department of Energy noted that Ford itself had obtained a $6 billion loan from DOE in 2009, the same type that GM was now rejecting.

Not quite so pure, is it?

Little Ray of Sunshine

Ford Motor Co.'s third quarter profit was good news earlier this month, and now General Motors Corp. is following up with a little ray of sunshine of its own.

It plans to pay back $6.7 billion it borrowed from the federal government four years early, according to the Detroit Free Press on Monday (Nov. 16, 2009).

A year ago, things were pretty dark in the auto industry, but we're not on the brink anymore.

A Game-Changer for the Auto Industry

General Motors has been working on its Chevy Volt for a long time, but I remained skeptical that a company that sold Hummers was all that committed to energy efficiency.

But the news on Tuesday (August 11, 2009) that the Volt can go 230 miles on a gallon of gas was eye-popping. Kind of makes the Toyota Prius look like a gas hog.

Better Late Than Never

Mike "I'm Fighting for Jobs" Rogers finally is getting on the band wagon to urge General Motors to builde its new small car in Michigan instead of Wisconsin or Tennessee.

Rep. Gary Peters, D-Michigan, started a Facebook campaign days ago to get people to tell GM the advantages of building the small car here, in the state where the company was born a century ago.

But it took until Friday (June 19, 2009) for Rogers to get the memo and put out an email (how yesterday is that) telling people he had written a letter to GM about the plant.

But I'm glad Rogers is on the right side on this one and isn't calling for people to boycott General Motors, unlike some of his conservative buddies.

Facebook Page for GM Small Car Plant Growing Fast

Want to show your support for having General Motors build its new small cars in Michigan? Follow this link and sign up to urge GM to "Make it in Michigan."

Michigan is in competition with Tennessee and Wisconsin for the plant. A decision is expected by the end of June.

Michigan has been General Motors' home for 100 years, and as the page argues:

"We believe that building your new vehicle in Michigan makes good business sense for GM. Our state is the home of many of GM’s key auto suppliers, GM headquarters and tech center, new battery and electric car production, and the most talented engineers and skilled workers in the world."

Some 4,500 people signed up in the first 48 hours. Send the link to a few friends and urge them to sign up, too to keep it growing.

Limbaugh Hoping General Motors Fails, Urging Boycott

Talk about cutting off your nose to spite your face.

Rush Limbaugh and at least one other far-right Republican are now hoping that General Motors fails and are urging people to boycott General Motors because the Obama administration has given it public funds and taken part ownership of it.

Talking Points Memo has the story, which is based on an article from The Detroit Bureau, which covers the auto industry.

So to score political points, Limbaugh and others are actually hoping that an American business disappears, taking with it thousands of jobs, impacting thousands of families in communities across the nation.

Will Michigan Republicans distance themselves from this call for a boycott? Do they dare stand up to Boss Limbaugh?

Don't hold your breath.

One Guy Loses His Job and Republicans Think It's a Tragedy

Sure, I feel sorry for Rick Wagoner. It hurts to lose a job, even if you do get a $20 million golden parachute.

But it seems like like Republicans are shedding way too many tears for this one unemployed autoworker and way too few tears for the thousands of line workers and others who already have been given pink slips.

Too Horrible to Think About--But for the Wrong Reasons

The news that General Motors and Chrysler are considering a merger should send cold chills down the spines of everyone in America.

It's yet another sign of our shrinking ability to make anything, to buy anything, to compete in the world, and to produce what we need to defend ourselves.

The Detroit Free Press describes the merger possibility, in a story in editions for Saturday (Oct. 11, 2008) as a "landmark moment" in Detroit auto industry history because it would "reshape" the global auto industry.

The Freep's business mouthpiece, Tom Walsh, offers his own take on the matter, describing it as "too hard to think about."

Why?

"All the plants to close, all the tortuous discussions with the UAW, all of the possible litigation with dealers. It's too horrible to contemplate," Walsh wrote.

Good grief, man. Thousands of people are likely to lose their jobs, their homes, their futures. And all you can do is whine about having to cover the "tortuous discussions with the UAW"?

Can't you explain why the negotiations might be "torturous"? Can't you even acknowledge the pain that job losses could cause the working families represented by the UAW?

In any of the coverage by the Free Press, was there even a working person asked for his or her opinion of the matter?

Oh, there was a nice piece on a Ford executive retiring.

That'll have to do.

GM Board -- Whose Side Is It On?

I feel sorry for General Motors. I really do. It's a crucial employer in our state and our nation and has provided comfortable livings for its hard-working employees. I own two GM cars, both of which I love and both of which the company in its wisdom (?) decided to stop making. I'm sorry that the company is still hemorrhaging money. But sometimes, the company just digs its own grave.

Take a look at Blue Collar Heart's latest post and you'll see what I mean.

Blue Collar Heart notes that at its annual stockholders' meeting, the company's board of directors recommended voting against several proposed items including:

"3) Disclosure of Political Contributions, 4) More disclosure of Political Contributions, 5) Health Care Reform Principles, 6) Stockholder Advisory Vote on Executive Compensation, 7) Greenhouse Gas Emissions, 8)Cumulative Voting, 9) special stockholder meetings and 10) Performance-Based Equity Compensation."

Health care reform principles? Hasn't the company figured out yet that companies who do the right thing and provide health care for their employees are getting stuck with the bill from all those companies that won't provide it, or can't afford to?

Probably has nothing to do with the fact that two of its board members came from the drug industry, does it?

Makes you wonder whose interests those board members are looking out for.

Rich Get Richer, Even in Recessions

A pair of articles published on Friday (March 7, 2008) nationally and in Michigan illustrate a problem that has been growing in our economy in recent decades -- the widening gap in pay between executives at the top of American corporations and workers at the bottom.

Rep. Henry Waxman, D-California, held a hearing in Washington to quiz the heads of the nation's large mortgage companies about their multi-million-dollar pay packages at a time when their firms are losing billions of dollars.

Meanwhile, the Detroit Free Press reported that General Motors restored the pay cuts and even raised the salaries of some of its executives, despite layoffs for workers and continuing losses for the company.

GM's CEO, Rick Wagoner, had his pay cut in recent years when the company was going through the worst of its downsizing. Yet even though the company still lost $23 million (not counting one-time accounting changes)in 2007 , Wagoner not only had his pay restored but also given a potential $3.52 million bonus and potentially hundreds of thousands of shares of GM stock and stock options.

Granted, that's not as much as the head of Countrwide Financial Corp., who got $120 million while the company lost billions.

But isn't the bonus package still a little premature, given that GM has yet to come out of the red? Shouldn't he have to produce better results before being rewarded?

Unfortunately, such big pay packages for executives have become commonplace. Waxman is not the only person complaining about them nationally. Paul Krugman, an economist and columnist for The New York Times, warns inhis book, "Conscience of a Liberal," that the pay gap in the U.S. between workers and CEOs has widened dramatically since the 1970s.

In fact, Krugman says, the gap between rich and poor is now as wide as it was in the period from the 1890s to the 1920s, a time when many working Americans lived in grinding poverty.

Such inequality affects not only our economy, but also our politics, Krugman argues. People with enormous wealth have disproportionate impact on government through their political contributions. Meanwhile, the middle class is weakened as their salaries stagnate, no matter how hard they work.

Conservatives today have no problems with this income disparity. Yet if they really paid attention to the nation's founders (as they claim to when trying to narrowly interpret the U.S. Constitution) they would know that such income disparities are exactly what the founders wanted to avoid.

Thomas Jefferson especially warned against a social structure such as that of Europe's at the time, with a few super rich and masses of poor. His vision of democracy included a relatively even distribution of income with few social distinctions.

We're a long way from Jeffersonian democracy today, as Krugman notes. We need lots more hearings like Waxman's to get us back on that path.