What my Detroit Bailout would look like

I’ve been thinking about the auto industry quite a bit lately, as I suppose everyone has been. Some are arguing a for a loan or bailout of the “big three” some are opposed. I have a third way that I believe could revitalize Detroit, create jobs, and solve part of America’s energy crisis.

 

Some are saying that it’s not the government’s job to “choose winners” in this or any economic climate. In many ways I agree, however, the government is charged with defending the nation’s key interests. The use of oil, foreign and domestic is a threat to our economy, our climate, and our national security. It needs to be eradicated for the country to thrive through the 21st century and beyond.

 

Therefore, whatever loan/bailout solution that we come up with for Detroit cannot just be a bridge loan, or some amount of funding contingent upon if they curb executive pay and raise fuel standards 5 miles per gallon within 10 years. This is a crisis and we need a serious solution. Sadly, our national automakers have not been on the leading edge of innovation when it comes to alternative fuels. Thankfully today we live in a global economy, and there are companies that have been.

 

My bailout would come in several steps:

 

  1. License at a handsome profit Honda’s hydrogen fuel cell technology, it’s solar cell to hydrogen technology and it’s at-home hydrogen extraction technology at a handsome profit to the automaker and engineering company that not only has led the way on how to propel their cars, but on how to develop that propellant in clean and sustainable ways.

 

  1. Having licensed this technology, the government, in cooperation with private investors oil companies (that own gas stations), and the big three deploy hydrogen refueling stations across the country to existing gas stations, making the alternative fuel a real possibility for American consumers.

 

  1. Fund Ford, GM, and Chrysler as they retool and rebuild their line to meet the new hydrogen fuel standard. Don’t take deadline extensions for answer. 4 years to build a completely new line of cars.

 

 

  1. In return for this massive cash infusion, the American automakers must be willing to accept high-yield trade-ins of existing automobiles. This technology does us no good if people continue to drive their gasoline powered vehicles. Our national automakers must do their part and make their new line affordable to Americans by accepting their older automobiles as a high asking price (say 50% of original asking) these cars should then be dismantled and recycled back into the material pool.

 

It’s beyond my level of expertise to know what this program would cost, how to fund it, and what the realistic timelines would be. But I do know the country needs to find a new way forward when it comes to automobiles. I also know that the auto industry needs to reset and rebuild. I’m sure other measures such as labor contracts, parts and service contracting and supply chains would need to be hammered out. But my plan is simple, direct and justifies the costs with reasonable expectations from all parties involved. It’s my idea, I hope it’s of some use. 

The Future of Detroit

The next political football to get tossed around will be the question of whether or not the big three automakers here in the US should get a bailout or a loan or some other financial help in the wake of the economic crisis. I am of two minds on this, my politically expedient mind knows what’s going to happen. My cold utterly logical side wonders what should happen. 

First political reality. There is no way Washington doesn’t bail out the automakers. It might not be the lame duck session under President Bush. But shortly after inauguration President Obama and the new congress will do something. Why? Because no congress wants to be in power when a million people lose their jobs and nation wide ripple-effect further cripples the economy. Make no mistake, treasury will print money as many times as it takes for as long as it takes to keep Detroit alive. 

Now for the policy wonk in me…is that course of action right? While I respect and fear the economic cataclysm that would occur if Detroit was allowed to fail, I also fundamentally believe in creative-destructive force of capitalism. The airlines were dragged into bankrupcy and it forced them into court to retool their labor contracts shed bad assets and retool. Perhaps GM filing chapter 11 will be the only way for it to retool for the 21 century both technologically but also economically. The bottom line is the Detroit of the 1960’s thru the 1980’s will not exist anymore. But perhaps in the wake of its destruction there will be a workforce a million strong ready to build the economic future of America. 

Perhaps the same workforce that built the cars and trucks of our past can build the solar panels and wind turbines of future. the hydro-electric parts and yes the fuel-cell vehicles of the 21st century. But maybe that will only happen if and when the nation let’s go of a dying industry, perhaps we need the big three to file chapter 11 and come out of the wilderness.

An Open Letter to Oprah Winfrey RE: The Bailout

Dear Oprah, 

Please pardon my tardiness in finally writing this letter to you. I am writing regarding an episode which aired on Oct. 3rd, 2008. It was an “open Friday” episode, where you bring people on to talk about the news of the day. The episode largely concerned the (at the time proposed, now passed) federal bailout plan. You and your panel’s discussion of the bailout disturbed me greatly. You and your panel on the subject, Ali Velshi of CNN and Suze Orman of CNBC discussed what the credit crunch was, why it was a problem and why a bailout was proposed. 

But then, inexplicably, you and Mr. Velshi began to sell the American public on this bailout plan. Quoted from your website:

People were phoning their congressmen and congresswomen saying, ‘We don’t want you bailing out these fat cats,’ because the perception was we were helping all these guys on Wall Street and they were going to get richer and richer even though they’d done all of this to us,” Oprah says. “But it’s really all of us who are going to be affected.” 

…Ali says that if the bailout doesn’t get passed, credit will get even tighter and more jobs will be lost. “Inadvertently, we’re going to have to help Wall Street to get the money trickling down to you, because that’s the system through which money flows,” he says. “But there’s a real reason to be angry.”

Still, the task at hand should be to fix the problem instead of wasting time blaming Wall Street, Ali says….

The insinuation here is that the bailout package as proposed is the only way to help Wall Street. The discussion centered only on the plan being necessary quickly, not the details or larger ramifications of it. Nor was there any questioning or criticism, perhaps there were better ways to distribute tax payer funds. Why not renegotiate the mortgages first, then buy the derivatives? Why free up $700 billion all at once instead of releasing it in increments? Those are just just a couple of questions that could have been asked. Lastly, “blaming Wall Street” as Mr. Velshi puts it, is exactly what we should be doing. If we do not analyze and determine where the system broke down, how are we to fix it? 

Instead you took your air time and exceptional influence and simply sold a plan instead of explaining it. I found the entire approach demeaning and insulting, particularly coming from a multi-millionaire who has a vested interest in keeping the Dow high. Now, I in no way am accusing you or Mr. Velshi of collusion. I think in an effort to explain a large complex problem quickly things were simply over simplified. But if citizens are going to make rational decisions as to whether or not to support a piece of legislation that will double the national debt, ALL the facts should be brought to bear. It was disappointing and upsetting to see your show become a propaganda tool. 

Perhaps pushing interviews with Gwen Ifill and Maya Angelou, both women I respect and admire, off the agenda to afford more time to discussing this very important item would have given you more time to explain the entirety of the issue. It is my sincerest hope that we will be able to explore legislative issues like this on your show in more depth in the future.

Give em what they want

Call me crazy, but maybe, just maybe the Senate should follow suit and fail this damn bailout legislation. While I personally think that some kind of plan is necessary to end the economic funk, the people have spoken, and I’m naive enough to believe that we still live in a democratic society. So if the general will calls for it, I believe it is our elected leader’s responsibility to honor their constituents. I’ll openly admit that my limited knowledge of the economy might disqualify my assessment of this situation, but I really think there has to be another way of repairing theses deep financial wounds while simultaneously acting in the best interest of both the Republican and Democratic electorates. I’m somewhat concerned that should our Congress force this bill though without popular approval, we might be on course for an even greater political disaster. Public trust of our government has hit an all time low, with both the President and Congress sporting abysmal approval ratings, and should the legislature further ignore the cries of the people, we could see a new brand of political apathy on an epic scale. Therefore, while many Senators and Congressmen have cited that they are acting in the public interest, I would propose that doing “wrong thing” in this case, might actually be the best thing to do.

The Dark Knight Meets Bush Bailout

For my first trick, I’m going to make this economic crisis…disappear…

It’s not a bailout…it’s a rescue

John McCain said on CNN today

let’s not call it a bailout…Let’s call it a rescue. Because it is a rescue of Main Street America…

If this is how John McCain is going to deal with crises as they arise, I’m not interested. He spent Sunday morning bragging that he and brought the House Republicans into the deal, and then on Monday they killed the bill. Now he’s in the business of re-selling the bill not as a bailout (which it is) and calling it a rescue (which it only might be). 

I would like to see either of these candidates engage their brains and stimulate a debate on this. Give me a reason to be for it…otherwise, please, stop talking.

Bailout in the Tank

McCain Blames Obama

Obama makes eloquent statement

All is right with the world.