Personally, the last person that I’d put as head of Treasury right now is the former CEO of Goldman Sachs, mostly because no matter how smart he may be, his whole worldview is far too Wall Street and NY focused (’obsessed’ would probably be more accurate). Ditto the other Bu$hCo appointees.

George Soros has the best track record that I am aware of — but the Bushies loathe him, because he sees the Really Big Picture and he values openness and transparency. The fact that the Bushies all keep secrets, that all the Wall Street money is based on ‘private information’, and that the bailout is not one bit transparent pretty much tells me:
1 They don’t know what they’re doing.
2. They’re terrified we’ll all catch on that they don’t know what they’re doing – despite the fact that given Paulson’s erratic behavior it’s already obvious that they’re simply reacting and don’t have a handle on things.
3. They’re used to keeping secrets, they value insider information, and their power fundamentally relies on insisting that no one can make them accountable for any of their decisions — kind of the way the Mafia operates, which tells me all that I really need to know.
4. They’re used to getting what they want and believing they are valuable and important, so the phenomenal contempt and resentment that someone like me feels toward them must come as rather a shock — which means, they’re entrenched in self-delusion that is only making them more inept, and the economic problems worse.

Not a pretty picture.
People who are decent will figure out a way to make them work better.
Sociopaths will take advantage of the confusion, and those are the people that we need to spot and guard against — no matter whether they’re running governments, institutions, or the local gas station. For that reason, my own view is that far more law enforcement resources and procedures are critical for solving our economic woes going forward.

The most dangerous thing that occurred in the financial meltdown is that incentives were created by which companies were “worth more dead than alive” on the balance sheets. (FWIW, one reason that I utterly loath Mitt Romney is that Bain Capital was an early phase of this kind of ‘killing companies to pick off the best parts’, and I think that is fundamentally amoral within the larger social context.)
People have made millions from destroying companies – and now they’ve built this disastrous system up to such an extent that their next victims are that Big 2.5.
This really is a key, fundamental, critical conflict — and there are financial interests and third parties who want the Big 2.5 to fail so they can pick off the ‘carcass’ (i.e., the patents and intellectual property).

Agree with you that we’re all tired of supporting sluggards, particularly those who probably make more than most who read and comment around these parts. But despite that fact, as klynn points out there are bigger issues — how do we address them in a socially responsible way? The old methods are clearly NOT working for nearly enough people.
Bailouts have not worked, and are not working as predicted.
So now what?

How to retain the Big 2.5 on life support in order to maintain control of the patents while other factors shift so that they are more competitive going forward — in a society in which millions of people have just watched billions vaporize in their homes and portfolios?

And as wavpeac shrewdly points out, there is an overlap between ‘auto’ and ‘finance’.
(Kevin Phillips pointed out a few years back in a book titled “American Theocracy” that by the early 1990s GM was making more off finance than off products; we’d become a ’service economy’ back in the 1980s making more money off loans than off goods.)

wavpeac probably makes the most fundamental point of anyone on this thread:
There is a dual relationship between Big 2.5 and finance.
Those threads need to be untangled, and we need to figure out how to enforce restrictions on finance, while enabling the Big 2.5 to lead the way toward more sustainable solutions.

The one thing that I am certain of is this: if the Big 2.5 go under, it will impede America’s move toward more sustainable economic activities.

Sounds like Congress needs to figure out “Bailout 3.0: the Upgrade” and figure out what THAT could look like.

changing their stripes to more match their competition.

I have to point out the “changing of stripes” is an interesting concept
in light of http://emptywheel.firedoglake……nt-116099:

And I want to go specifically to Alabama if I could for a minute. We have

Hyundai Motor Company that got $252.8 million in incentives
Toyota there got $29 million in incentives
Honda $158 million
And Mercedes $253 million in incentives

It just seems odd to us that we can help the financial institutions in this country. That we can offer incentives to our competitors to come here and compete against us. But at the same time were willing to walk away from an industry that is the backbone of our economy. And while I read these figures to you which is the actual figures that we’ve been able to dig up I want to go to one particularly. And this is the plant, the Mercedes plant in Alabama. As it turned out as I’ve said Alabama offered $253 million dollars. But the state offered to train the workers, clear and improve the sites, upgrade the utilities, buy 2,500 vehicles and it’s estimated that incentive package totaled some where around $175 million dollars, oh excuse me $175,000. per employee to create those jobs there. And on top of this the state gave this auto maker a large parcel of land around $250 to $300 million dollars that was the same price or cost to them of building a facility.

The thought of risking our national security through tanking the auto industry, creating a reverse stimulus on our economy due to tanking the auto industry; thus, creating yet more national security threats is simply wreckless and destructive.

We cannot go there.

well if you or someone else doesn’t mind, please clue me in about why the EV1 was bad. The people in the documentary seemed to love it, and why were the cars destroyed? That seems a little crazy.

readerOfTeaLeaves,

at item 3., I dropped out. Way too muddy for me. I just hope these financial guys, Republicans, Democrats and various Savants know what they are doing and get the economy back on track. I have lost the value of a fair sized house in my 401 so far. I would like to get it back.

I do agree with you that I would rather spend money on saving an homegrown industry making cars and trucks than on International Hedge Fund jocks, and Derivative swamis. But, all the powers that be seem to think that saving the Finance Industry is vital! Not so much the Auto Industry.

My only problem with GM, etc., is what will it take? How much and how long? And will the Auto Companies and the Union both continue changing their stripes to more match their competition.

readeroftealeaves, putting it another way, I don’t want to have to be putting money into that Auto operation year after year because the public just won’t buy the cars. Regardless of what kind of patents they hold, they still have to sell cars.

The floodplain issue took several years of monitoring and part-time focus; clearly, I have too much passion to squeeze into a reasonably sized comment.

Apologies!

1. The Big 2.5 need to maintain control of their patents for emerging new technologies.
2. Maintaining control of their patents allows them to build on the momentum they’ve developed toward a new energy economy that is not based on heavy, inefficient oil consumption.
3. There are parties who desire the patents and bargain-basement, fire sale prices; these parties find ‘reasons’ to object to the Big 2.5 bailout — one of their primary methods being to conflate the Big 2.5 bailout with the Wall Street bailout.

So we must ask: are these two bailouts ‘equivalent’?
How are they similar?
How are they different?

If the Big 2.5 bailout was to use the same logic as Wall Street, it would go like this:
1. Dealer A buys Auto A1.
2 To ensure that Dealer A gets all his money (plus interest) from the sale of A1, he goes out to the ‘insurance market’ to purchase a ’swap’ that will ensure he gets his full expected amount.
3. He is allowed to purchase the ‘insurance’ on the total of the cost of A1 + interest, and he is allowed to buy it at ratios of 30:1.
—– 3a. This means that if the total amount of A1 + interest is $30,000, he only has to put down $1,000.
—–3b. Under ‘Wall Street Roulette’ Dealer A puts down $1,000 — and this INSURES that he is guaranteed to get back $30,000.
—– 3c. Meanwhile, other dealers are also out spending $1,000 to INSURE that they can get back their full $30,000 for each vehicle they ‘option’.
—– 3d. In a very short time, a lot of $1,000 amounts change hands; it only has to do that about 100,000 times and someone (say, AIG) is in debt to the tune of $3,000,000. Not to worry; AIG doesn’t think everyone will come to collect at once.
—– 3e. The dynamic continues: dealers ‘option’ the odds that if they spend $1,000, then they are ‘guaranteed’ a return of $30,000. None of this is overseen, because back in 1999 Sen Phil Gramm argued that non of this should be regulated. So the insanity builds.
—– 3f. In practically no time, dealers each spending $1,000 apiece to INSURE their $30,000 ‘contracts’ for autos heat this market up faster than a Finnish sauna on Mercury — it’s wild, it’s the heydays, it’s Bonus Time on Wall Street because so many $1,000 checks are changing hands, all these jackasses think that money flows like wine and the Good Times Will Last Forevah. (No doubt I’m leaving out the random details: great cocaine and the long-legged hookers, but hang in here with me.)
—– 3g. So after about 1,000,000 of these exchanges in amounts of $1,000, AIG is ‘leveraged’ for something on the order of $30,000,000…. it’s basically a big math problem that people like to disguise with a lot of bullshit mumbo-jumbo about Free Markets.
—– 3h. So let this ‘Free Marketering’ cook a little hotter, and a little longer… and whoopee!! In almost no time at all, you have about $10,000,000 leveraged up to $300,000,000. Now, suddenly, some dealer out in Omaha, or in St Cloud, or in Denver wants to collect… and then another dealer wants to collect…
—– 3i. Someone says, “Fuuuuuuuckkkkkkk!” under their breath and probably wishes they had more good cocaine and great whiskey, cause guess what…? They’re about $290,000,000 short of the amount they’ve written contracts to cover.

Shit. Hits. Fan.

So then what? Well, if you are Wall Street, and you have a lot of friends in D.C, you belly up to your pals in the Capital and act like you’ve obligated the entire US public to pay off your gambling. The system will collapse! The markets — free, unregulated, and glorious as they were! — will collapse! The end is near! Your corner office? Gone.

Now, I despise my local GM dealer — the jackass who’s screwing up my floodplain, my dairy farmers, and my environment. And my taxes.
But I’ll give him this much credit — that jackass still didn’t expect me and mine to bail out his sleazy, sorry ass at the ratio of 30:1.
And at least he sells a tangible good.

So if you want to digress about whether a combined total of a few million UAW employees make a total sum that is larger than the combined (obscene) exec salaries + bonuses, go for it. Personally, I view it as a digression.

What pisses me off is to have to listen to ignorant bullshit that FALSELY equates keeping control of patents, with bailing out gamblers who make EVEN MORE than the auto execs. (If any auto exec made more than the $84 million/year attributed to the head of AIG, feel free to correct me.)

Just because two animals are ‘brown’ does not make them both grizzly bears.
One might be a puppy; the other might be a cougar.
Their ‘browness’ is one property that happens to be shared.
In no way, shape or form does that make them ‘the same’.
They are not.

Similarly, to say a bailout makes the Big 2.5 ‘the same’ as Wall Street is seriously flawed reasoning.
These are very different economic sectors.
Wall Street makes money from money — and, as we now see, from fraud, deceit, and corruption.
The Big 2.5 still make tangible goods.

All tangible goods are based on copyrighted, or patented intellectual property.
Control of that form of wealth — control of intellectual property such as patents — is a national security issue.
You do not hand your ass on a platter to people who aren’t as good as you are at developing novel, innovative solutions — NOT UNLESS you are explictly ‘Open Source’ or have some shared agreements.

Now, perhaps the Big 2.5 will move that direction, but for the present it is essential that the patents remain in US control, which means bailing out the sorry asses of the US auto companies — and setting strict conditions in doing so.

As for ‘outpricing’ themselves, I’d say this; UAW needs to work with management to make sure that its members do good work.
I don’t tell my dentist that he’s ‘outpriced himself’ — he’s a professional, and I pay for his expertise.
I don’t tell my doctor that she’s ‘outpriced herself’ — she happens to have some prestigious degrees and many years of experience that I regard as ‘valuable’.
I don’t tell teachers they’ve ‘outpriced themselves’ if they know what they’re doing and students learn.

If the UAW workers produce good cars, and have good safety records, then compared with the money spent to bail out ‘leveraged’ bullshit on Wall Street, IMHO the auto workers are a hell of a deal!

The main issue as I’ve followed EW’s threads are these:
1. How and why Wall Street and Big 2.5 bailouts are dramatically different things, despite the term ‘bailout.’
2. How and why it is important for momentum that the investments made by the Big 2.5 to move toward cleaner energy be retained by ensuring they remain in business to retain control of their patents.
3. There are powerful interests for whom the Big 2.5 are worth ‘more dead than alive’; they have spokesmen like Sen Richard Shelby of Alabama who can waste hours of time wankering on about the shortcomings of the Big 2.5. Such muddled thinkers should be ignored and scorned.

Other than that, you could easily spend a decade tossing around blame, excuses, and false claims.

I expect that the moron who has impacted my local floodplain will, under the new, ‘greener’ Big 2.5, discover that the auto companies no longer tolerate showrooms in floodplains, and that kind of lunacy will stop. In the future, as the car companies adapt to a new ethos, and new products, it will be a no brainer to recognize that their marketing, showrooms, customer service, and contact with consumers will need to align with more sustainable practices.

That will be a refreshing change, and I’d sure rather put my money toward that outcome, than cover the hedges, options, swaps, and gambling of egotistical frauds.

Wall Street is history.
We need to invest in Big 2.5 to move forward.

Here is an interesting note for those that keep bellowing about this docu mockumentary as some kind of slam on GM today, the makers of that previous one are now seeking Bob Lutz and GM’s cooperation in making a new documentary about Lutz to be tentatively titled “The Man Who Saved The Electric Car”.

So give it up with the putrid EV-1. It was a horrid car.

My friend, you misunderstand my point about the executives. They as usual made ”decisions for the benefit of the decision makers, themselves.” That is prevalent everywhere even in the military out on the real big flood plains of which I am most familiar, the oceans. Certainly in our Congress and White House.

The executives wanted to keep their cushy jobs with large pay, and they needed to keep the stock up and the plants open, so they caved in to the UAW.
If you want to pillory the executives, then fine, but you are dealing with two groups, executives and the UAW, who together decided to commit a crime against the well being of their company which finally caught up with them.

Sorta like a prositute and her ”john” and when they both get HIV or Aids, each blames the other.

If, especially, in the old days when there were mainly 3 manufacturers in America, the union strike had had to be against all 3 of the manufacturers at once, more sensible deals might have been made. Instead each of the big 3 were whipsawed against each other by the clever Unions. Sometimes our cleverness comes back to haunt us.

But one more lash at the executives. Sure they make obscene amounts of money, but they are typically mobile, and they can trash and cash in on their company and move on. BUT as a group the executives don’t make anyway near the money that the UAW workers make as a group so the UAW workers which aren’t nearly that mobile should have been more careful and kept an eye on their counterparts which weren’t in their union because that became their real competition.

The UAW, like the old steel workers just priced themselves out of a job. You can say the Executives were bad, bad, bad, but that doesn’t ease the pain or the plight the UAW finds itself in.

As far as hybrids and electric cars are concerned, you should rent the DVD that just came out. ”Who killed the electric car?”
It is more than interesting and shocking, it is mind boggling.

The damn Congress should play that video for the Auto Executives when they show up on Dec 2 or whenever they are due for another stupid performance.

My husband can fix any car. Has spent his life loving and working on cars. Does it for friends and family and none of us who have ever had to venture back into the land of “auto mechanic for hire” miss him more than when we get those bills and when we find out they didn’t fix what they said they did. This happens so frequently that it makes me wonder if there is a single honest mechanic out there. My husband in his early days worked at many of the big companies and said that he couldn’t think of a single one who wouldn’t attempt a swindle if they could get away with it.

I know my poorest clients have repeated ripoffs when trying to get a car repaired. Losing their hard earned money over and over again. If it were ethical I would have them see my husband but I can’t do that. He can’t recommend a single place in town that is “safe” for my poor clients.

To me that’s a whole different issue of it’s own. There needs to be regulations in the field of mechanics and prosecution for those who violate the law. But to me that whole field is rife with dishonesty and unregulated.

To the auto “makers” separate from “repair” I still think the key is in the restructuring and verifying the books.

I want congress to start seeing the books of these companies that they bail out. We have to know where the money went. It may seem obvious, but I would be willing to bet that we would find some important information that would help us avoid these pitfalls in the future.