Thursday, November 20, 2008
Freckles in November?
Yes, Virginia, Santa Claus is Dead.
Those are freckles, popping up on my typically daisy-bright whiteman skin. Apparently, my body thinks it's time for serious defenses against this tropical sun...
...or I'm breaking out in a case of early-onset malignant melanoma--frankly, I was expecting this.
Regardless, these freckles came as a surprise, especially today. It has been in the low 80s/high 70s for the last two weeks, but two days ago I was warned by a sober-faced flat-mate that today would be very cold, and I should be prepared. Well, folks I spent yesterday afternoon browsing for a jacket that I could justify buying (naturally, I didn't bring one), and having found none, confronted today's cold-snap with a flannel shirt.
About ten metres out the door I rolled up the sleeves.
Apparently cold is just not that cold. This isn't even a local trend. It's getting like this all over the world. And it's going to stay that way. Which is why I'm going to talk about Mitt Romney.
Okay, I'm actually just going to mention him, and his bit in the Times on the Detroit bailout hullabaloo. Mssr. Romney proposes a managed bankruptcy for the major U.S. carmakers. Possibly, for the first time ever, Mitt Romney (or the Romner as we used to call him back in grade school. Ah, memories...) has said something I agree with: a $25bn cash 'bridge-loan' to GM, Ford and Chrysler (a.k.a. Cerberus) would be tragic.
The utter collapse of these corporations provides the American Society, and thus the world with a fantastic opportunity--not just the kind of find-your-worst-enemy-piss-drunk-and-convince-him-he-aught-to-pay-a-visit-to-his-girlfriend's-parents-revenge-type opportunity--I mean the real kind that helps people.
The Romner correctly points out that offering a bailout to Detroit--presumably to cover operational costs and debt obligations until demand picks up again--is sheer folly. People will always need cars (Detroit has at least left us that legacy). The question is which cars do they want?
Sales have suffered in the last few years for two main--but very different reasons. The first was an unprecedented rise in oil costs. Oil shot up to over $140/barrel and everyone acted surprised. They even blamed oil traders for creating a 'speculative bubble.' As it turns out, oil reached high prices because the Chinese showed up and asked for some. And they have a lot of money.
When gas got to $4.xx/gallon, people started to drive less. In an exceedingly un-bubble-like fashion, the price of oil eased off its height, and settled in the $120s (or like 13% off its peak). More importantly, people started buying less-big cars (my suspicion is that these were people in the market for cars anyhow, and just adjusted their priorities). This is the same point people who write articles for a living started using the words "burning" and "hemorrhaging" do describe what GM was doing with their money. This is also where Mitt gets off calling GM uncompetitive.
Then the shit really hit the entirely unrelated fan. Lehman blah blah AIG blah blah blah. No one could get loans to buy cars. And those who could get loans to buy cars said "Fuck, no! My car works just fine!" Plus their old gas-chugger was still okay because those nasty oil traders speculated that economic collapse would lead to a decrease in demand and oil prices fell to like $50 or whatever they are now. Fuckers.
So with no one buying cars, GM (and the other, less interesting, longer named companies) flat ran out of money. Or at least they're about to. And now, the story goes, they need cold cash to keep the doors open and the balloons filled and the crazy wind-sock-men that blow around on the side of the highway full of air--at least until demand picks up again, and all this silly 'people don't want our cars stuff' blows over.
Unfortunately, there is no going back to the past (unless Obama pulls a 180 and gets serious about full-spectrum-dominating the middle east back to $20/barrel oil)--we are stuck with one situation or the other. I prefer a functioning economy with $140 oil, but I'm not the decider. If/When the economy recovers, it will mean we are back to buying all those plastic goodies the Chinese make for us. with oil. And that means it will be very expensive to drive a car that seats an NBA starting lineup. And that means GM will still be insolvent. Just a couple months down the line. This much the Romner's got.
Unfortunately Capt. Romnetron missed the incalculable trauma GM's (and Ford's and the other one's) collapse would have on the consumer psyche. I remain convinced in this; the most important part of recovering from a recession is to kick the dour. And tossing out a couple tens- or hundreds-of-thousands of line worker's from one of America's most classic professions would only one step better from issuing a new series of 'Rosie-the-Riveter pissing on the American Flag' stamps. There's that and all the people who would lose their pensions and healthcare too. That would be way bad.
So we can't pull the plug. And we cant plug the hole (damn, i'm hot!). Why not push through and socialize the whole thing?
Alright, I didnt mean it. But really, a major restructuring is unavoidable. Romney makes an excellent point in that the Unions would be much easier to handle (read: put down) in a chapter 11 situation. Unfortunately, that needs to happen at least to some extent. It would be a tremendous waste to scrap the whole deal and allow 'the workings of the free market' to conjure up some magical new companies to compete just as fiercely with Toyota. Especially because it wouldn't happen.
But here's what could:
Allow GM to go bankrupt. Spend some more money (hell, China's still good, right?) and back up warranties, pensions, and healthcare (they'll get merged into the forthcoming free & perfect universal system, right? right??). Let the companies restructure themselves--But make gas wicked more expensive. I propose something like $4.50/gal, pegged nominally to inflation--but the more expensive the better.
I've said it before, and I'll say it again, families are spending less on petrol than ever before...at least they were as of Q3 2007
Wow! thats a bitter pill. Yeah it would never sell, but it would fucking work. First thing, its absolutely no different than sending them $25 billion, or however much more they'll need in February, except that it's actually today's taxpayer's money, not next generation's. Second, it allows the good parts of capitalism to work-ish. No one wants to kill Chevrolet, but this will force them to change. And unlike Romney's retarded idea that new companies will somehow be able to compete with Toyota, Toyota will be dealing with the same new situation. Fact is, if CAFE standards were raised, and the price of gas doubled, everyone would have to make new cars. Not just the weakened, disadvantaged domestic companies.
Oh, and it would also help prevent catastrophic global warming, though we should never let considerations of drastic, permanent damage to the planet trump the economy, stupid.