I was a political science major in college. I considered myself liberal. I was a champion of human rights before it was vogue. I never really bothered myself with economics because money has never been the focus of my life. But I guess you could say I am conservative when it comes to money because I appreciate how money is made.
I grew up in one of Denver's western suburbs--a place built right after the end of World War II. Everyone I knew was lily white and most were Protestants. As I grew older I came to realize that some of the kids I went to school with were "richer" than I was. I figured that out by the size of the houses they lived in and the large new cars that their parents drove.
My parents were almost kids themselves when my sister was born in 1930. I came along 17 years later. My dad had to get whatever work he could find during the Depression to support my mom, my sister and my big brother. Like so many people that endured the Depression, my family came out of it with a fear of ever having to live through anything like it again. So my roots are humble and I have a respect for people who work for a living and who know the value of saving and earning what you get in life.
As an attorney that worked in a couple of Denver banks managing problem loans, I learned that sometimes the rich people that live in big houses and drive big cars are not exactly the nicest people around. Sometimes those people lie and cheat and deceive other people (and bankers) into giving them money they do not deserve and cannot pay back. Oh, they will pay it back if things workout alright for them. But if things go bad, there is always an excuse or a defense.
Back in September when politicians and the media started beating the drums for a bailout of Wall Street, I raised my voice in opposition. I wrote my Congresswoman and my two Senators. A lot of good that did. Congress approved the $700 Billion bailout with no bona fide strings attached. Can you believe they got taken again?
So now DETROIT wants a bailout as well. The apologists are on TV talking up the end of the American way of life if the Detroit automakers have to file bankruptcy. I find myself siding with Republicans like Senator Dick Shelby on this one.
Mitt Romney was all over the morning TV programs today discussing his OP ED piece in today's New York Times. CLICK HERE to read. It's short and to the point. Read it.
I agree. With a Republican. My dad would disown me.
One of Romney's major points is that Detroit can use a Chapter 11 Bankruptcy to get out of many of the costly and burdensome obligations that will continue indefinitely unless they are disgorged by bankruptcy. Romney and others are calling those costs "Legacy" costs. Those costs are primarily health care and retiree benefits. In government speak those costs are referred to an "entitlements" because the demand is always present and everlasting.
Romney also calls for the ouster of the geniuses that have been running Detroit that created the current mess. Again, I agree. In a Chapter 11 Bankruptcy the new companies could use the law to avoid all kinds of burdensome contracts (including the costly executive compensation packages) that have added thousands of dollars in unnecessary costs to autos produced in the United States.
Yesterday afternoon one of the guest commentators on MSNBC blamed Congress for the fact that American automobiles get less miles per gallon than most Japanese cars. Wait a minute, buddy. It was Detroit that lobbied Congress for the lower standards. I am old enough to remember that we went down this same road back in the late 1970s. Detroit was going to build cars that got better mileage. But they didn't.
Lately it has been the Bush White House that objected to the efforts of states like California to enact higher miles per gallon requirements that would limit pollution. The talking heads always seem to blame someone else for the problems that their industry created. This time its just the blame game on wheels.
If Congress gives Detroit a bailout the executives keep their lucrative executive pay and all the trimmings that go with it. That includes deferred compensation plans, bonuses, stock options, etc. Forget that the stock prices are low right now. The executives are probably buying as much of it as they can. Because if the bailout comes, the stock will go back up, and the executives will make out like bandits again.
This is how Romney ends his OP ED: "The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk."
"In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check."
