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December 7, 2008

How To Read an American Newspaper
Posted by Patrick at 10:37 PM * 70 comments

America GOOD!

Detroit Bailout May Bring On U.S. Oversight

Congressional Democrats were weighing options for government control of the auto industry, including the possible creation of an oversight board.

Foreigners SINISTER!
In Hard Times, Russia Moves In to Reclaim Private Industries

The Kremlin seems to be exploiting the economic crisis to establish more control over weakened industries.

Yes, when we do it, we’re “weighing options” and possibly creating an “oversight board.” But when Russia—excuse me, I mean “THE KREMLIN”—does it, they’re “exploiting the economic crisis” in order to “establish more control.” You can hear their commissars cackling as far away as Sarah Palin’s house!

I don’t doubt for a moment that there’s plenty to criticize about the cozy oligarchy that post-Soviet Russia has become. And I actually think we probably do need to keep the Detroit auto companies, awful though they are, from completely cratering over the next few weeks. But the difference of journalistic slant is striking when the two stories are a mere one column apart.

In fact, I’m sure the Russian elites, contemplating their problems, are telling themselves high-minded stories that are more similar to the internal narratives of our own aristocracy than they are different. And it’s hard to look at the recent raids on the commonweal by our own merchant princes and not think, hm, this looks a lot like the behavior of a mafiya. But it’s remarkable to see such a high-level organ of received wisdom as the New York Times making our habitual hypocrisy quite so plain.

Comments on How To Read an American Newspaper:
#1 ::: Anders Monsen ::: (view all by) ::: December 07, 2008, 11:10 PM:

There is a very sweet sense of irony when seeing these stories side by side. For what are the Big Three but weakened industries? And would not the government exert some control if they are going to pump billions into propping them up to ensure they never fail?

#2 ::: Patrick Nielsen Hayden ::: (view all by) ::: December 07, 2008, 11:13 PM:

I would certainly hope so. I'm not necessarily opposed to ponying up megabucks in order to keep the machine running, but I have this crazy notion that the public should get something other than (as in the case of AIG, Citibank, etc.) nonvoting equity.

#3 ::: heresiarch ::: (view all by) ::: December 07, 2008, 11:46 PM:

To be fair, this particular double standard is pretty recent in origin. Not too long ago, that first headline would have read something like "DEMOCRAT PINKO SOCIALISTS ATTEMPT TO STRANGLE AMERICAN ENTERPRISE." It used to be that any whiff of government interference in good old-fashioned capitalism was anathema. The problems with that philosophy have become evident at home, but it's not surprising that the "free" market line still holds abroad.

#4 ::: will shetterly ::: (view all by) ::: December 07, 2008, 11:59 PM:

I'm surprised at how disappointed I am. The Times usually does a better job of handling propa-- uh, the news that is fit to print.

On the other hand, extreme times call for extreme measures. Few of the Times' faithful are likely to notice that News Fit To Print has been turned up to eleven.

#5 ::: Avram ::: (view all by) ::: December 08, 2008, 12:03 AM:

Aw, if it were only mere megabucks we were talking about! The Big Three are asking for gigabucks, and the banking industry got most of a terabuck. Congress loses megabucks in its sofa cushions.

#6 ::: Steven desJardins ::: (view all by) ::: December 08, 2008, 12:27 AM:

The content of the Russia article fairly justifies a more negative headline, though. There's a difference between negotiating concessions in return for financial help, and using trumped-up charges and a dysfunctional legal system to force companies to make concessions.

#7 ::: Patrick Nielsen Hayden ::: (view all by) ::: December 08, 2008, 12:33 AM:

True. We just use trumped-up charges and a dysfunctional legal system to overturn elections. All different!

#8 ::: Nicole J. LeBoeuf-Little ::: (view all by) ::: December 08, 2008, 12:39 AM:

I am reminded of the post-Katrina news images captioned with opposing phrases like "scavenging the means to survive" and "looting" depending on the skin color of the depictees.

#9 ::: pericat ::: (view all by) ::: December 08, 2008, 12:46 AM:

Does the Russian way of doing things ensure that the State will gain an ownership status in the reclaimed industries equal to the money it invests in those industries? Cos if so, that's a considerably better deal than the American taxpayers are getting.

#10 ::: albatross ::: (view all by) ::: December 08, 2008, 01:01 AM:

If you read some of the discussion going on about what should be required of the big three to get a bailout, it's hard not to suspect that this is going to involve the folks inside the Kremlin Beltway having a great deal of power over how American cars are made, what sort of labor negotiations will happen, what models will be built in the future, etc. Those decisions will now be made with government input, with all that implies. I don't think many people have thought through what that means, yet.

We've been sold these bailouts (including this one) in panic mode. In doing them, we are in the process of redesigning our whole country and economy, in ways nobody has thought through. We're likely to come out of this with the US government having a substantial ownership interest in a whole bunch of politically-important industries. The companies in those industries will still be permitted to lobby and make donations, and the government will still be regulating both them and their non-nationalized competitors. The kind of power for tinkering with the workings of the economy this represents is horrifying. But the politicians and the media and the shills of the companies who want the bailout money simply aren't talking about that stuff. What would be the profit in that?

#12 ::: Lizzy L ::: (view all by) ::: December 08, 2008, 01:14 AM:

albatross at 10 said: We're likely to come out of this with the US government having a substantial ownership interest in a whole bunch of politically-important industries.

Turn the above sentence around and what you get looks very much like what we've more or less had for the last 100 years or so.

We're likely to come out of this with a whole bunch of politically-important industries having a substantial ownership interest in the US government.

The more things change, the more they stay the same.

#13 ::: will shetterly ::: (view all by) ::: December 08, 2008, 01:53 AM:

Nicole @8, it's actually much more blatant. In the Katrina examples, there were two different news agencies: the European-based AFP spoke of "finding" food and the US-based AP spoke of "looting." In this case, it's just the New York Times doing its usual shtick.

#14 ::: Bruce Cohen (SpeakerToManagers) ::: (view all by) ::: December 08, 2008, 02:33 AM:

I suspect Detroit's more likely to get real help from God than from Congress. Certainly talking to Congress these days, if you don't have a few million dollars and a larceny of lobbyists in your pocket, is more like talking to a brick wall than praying to God is. At least God isn't likely to fall over on you. Or pick your pocket as it does.

That one little rectangle of news includes another lovely, a headline designed to imply to the casual reader that Pakistan is known to have backed the attack in Mumbai.

All the news that fits an American exceptionalist world view.

#15 ::: Luthe ::: (view all by) ::: December 08, 2008, 03:10 AM:

What amuses me the most is the amount of outcry for "strict oversight" and "detailed plans" that the automakers need to provide just to get a measly* $25 billion, while the financial industry got $350 billion with no oversight or plan whatsoever.

The rat stinks so bad you can smell in three towns over.

*Compared to $700 billion

#16 ::: Steven desJardins ::: (view all by) ::: December 08, 2008, 03:37 AM:

Patrick@9: And this is relevant how? The New York Times should have used a different headline on an article about the American automobile bailout because of corruption in the American judicial system?

Just because the New York Times is frequently guilty of similar misdeeds doesn't mean they're guilty this time—and if the difference in the headlines is justified by a difference in the articles I'd say they're not guilty. I frequently criticize the New York Times for holding themselves to a lesser standard of logic when slurring entities they hold in contempt; that behavior is no more attractive when applied to them, than when applied by them.

#17 ::: heresiarch ::: (view all by) ::: December 08, 2008, 03:45 AM:

albatross @ 10: "The companies in those industries will still be permitted to lobby and make donations,"

Really? I thought that one of the conditions of the bailout was the dissolution of the Big Three's lobbying groups.

One possible upside of government input in auto manufacture, among a field of downsides, is that it could allow the government to implement otherwise impossible fuel economy standards and other green energy initiatives in the American auto industry.

#18 ::: Jon Meltzer ::: (view all by) ::: December 08, 2008, 06:46 AM:

And don't forget the important news. The one in the upper right corner, with a picture.

Luxury good sellers are suffering!

#19 ::: Chris ::: (view all by) ::: December 08, 2008, 07:13 AM:

Well, I just jumped to the conclusion that "and by 'may', we mean 'won't', because when was the last time Congress actually effectively oversaw something of real importance?", which means that the stories are really different and not just being made to look different - in Russia, government controls business, while in the U.S., the reverse is true.

Is that too cynical of me? I doubt it.


@#14: People with critical thinking skills might note that if Pakistan backed the group *before* the attacks, that doesn't necessarily imply that Pakistan knew about, let alone supported, the plan to carry out the attacks, or intends to go on supporting the group after it carried out those attacks (if indeed it did at all and isn't just "suspected" by India *because* of its links to Pakistan).

But like most MSM fare, the article isn't intended for people with critical thinking skills. Too small a demographic.

(And whatever else the Mumbai attacks may have been, they were definitely not a "siege". Besieging Mumbai might be possible even in the modern era, but you'd need a much larger force. And a navy as well, since it's a port.)

#20 ::: John L ::: (view all by) ::: December 08, 2008, 07:27 AM:

The sad thing about our economy is that the car companies represent one of the last major industries still in the country, and that allowing them to collapse would probably kick the economy right into the bottomless pit.

Since workers for the car industries tend to be so well paid, I've seen analysts indicate that each worker laid off represents 1.7 jobs lost due to a drop in economic spending. However, even with a restructuring or bailout, the companies will still need to lay off thousands of workers, which will trickle down to the local economies through loss of dealerships, part manufacturers, etc.

Just like some of the financial institutions that were bailed out, the car manufacturers have become "too big to be allowed to fail". At least the latest talk has them using money already set aside for alternative energy vehicles to shore them up, rather than printing brand new money for them.

#21 ::: A.R.Yngve ::: (view all by) ::: December 08, 2008, 07:41 AM:

The basic rules for how to create bullshit verb tenses:

1st person verb:
"I dress"

2nd person:
"YOU dress up"

And so on:
"HE/SHE puts on some rags"
"THEY look so 90s"

This can easily be applied to news:

- WE bail out the economy
- THEY take over the economy

- WE investigate Blackwater controversy
- THEY massacre innocent civilians

#22 ::: Gag Halfrunt ::: (view all by) ::: December 08, 2008, 07:57 AM:

perikat @ 9:

Does the Russian way of doing things ensure that the State will gain an ownership status in the reclaimed industries equal to the money it invests in those industries? Cos if so, that's a considerably better deal than the American taxpayers are getting.
The issue seems to be how the state gains ownership status. The NYT article implies that the Russian government uses investigations, fines, lawsuits and insider trading to force down a company's share price so that the state can mount a takeover cheaply.

#23 ::: Ken MacLeod ::: (view all by) ::: December 08, 2008, 08:02 AM:

I've thought for some time that the future we're all heading into is well caught by Hillel Ticktin's phrase "capitalism with Russian characteristics".

#24 ::: Patrick Nielsen Hayden ::: (view all by) ::: December 08, 2008, 08:23 AM:

I think Steven desJardins and I are talking past one another. The point isn't the stories in their full substance, the point is how they're spun on the front page.

I was not and am not making the reductionist claim that the US and Russia are Exactly The Same, Man. I thought I was clear about that in the initial post.

#25 ::: lucas ::: (view all by) ::: December 08, 2008, 10:22 AM:

You may be missing some important nuances as ideological filters become irrelevant when there are questions of survival.
Times Co. to borrow against building
By Richard Pérez-Peña
Published: December 8, 2008
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The New York Times Company plans to borrow up to $225 million against its mid-Manhattan headquarters building, to ease a potential cash flow squeeze as the company grapples with tighter credit and shrinking profits.

The company has retained Cushman & Wakefield, the real estate firm, to act as its agent to secure financing, either in the form of a mortgage or a sale-leaseback arrangement, said James Follo, the Times Company's chief financial officer.

The Times Company owns 58 percent of the 52-story, 1.5 million-square-foot tower on Eighth Avenue, which was designed by the architect Renzo Piano, and completed last year. The developer Forest City Ratner owns the rest of the building. The Times Company's portion of the building is not currently mortgaged, and some investors have complained that the company has too much of its capital tied up in that real estate.

The company has two revolving lines of credit, each with a ceiling of $400 million, roughly the amount outstanding on the two combined. One of those lines is set to expire in May, and finding a replacement would be difficult given the economic climate and the company's worsening finances. Analysts have said for months that selling or borrowing against assets would be the company's best option for averting a cash flow problem next year.

Standard & Poor's recently lowered its credit rating on the Times Company below investment grade, and Moody's Investors Service has said it was considering a similar move. Times Company stock, which has lost more than half its value this year, closed on Friday at $7.64, down 30 cents. More Articles in Business » A version of this article appeared in print on December 8, 2008, on page B2 of the New York edition.

#26 ::: James Davis Nicoll ::: (view all by) ::: December 08, 2008, 10:27 AM:

I think we're all agreed here that the time has come for the US auto industry to turn to the obvious pair of visionaries who will lead that industry into the 21st Century. I speak of course of Malcolm Bricklin and Paul Moller.

#27 ::: Spherical Time ::: (view all by) ::: December 08, 2008, 11:30 AM:

Lizzy L @ 12: Turn the above sentence around and what you get looks very much like what we've more or less had for the last 100 years or so.

We're likely to come out of this with a whole bunch of politically-important industries having a substantial ownership interest in the US government.

The more things change, the more they stay the same.

I think the government is primarily going to be buying not voting shares.

However, I think there's a certain truth and a certain misapprehension in that reversed statement. Yeah, the government is reversing the flow of money from the corporations giving money to the government to vice versa but as the government is (theoretically) public not private, there are huge differences between the first case and the latter case. I think that the people should be much more concerned about what is happening now because it's supposed to be our government.

But I'm too tired to figure out how to make that point more clearly.

#28 ::: Ken Houghton ::: (view all by) ::: December 08, 2008, 12:01 PM:

"Detroit auto companies, awful though they are..."

That just Is Not True. Detroit auto companies have been making real progress over the past ca. 15 years in efficiency, safety, and production. They basically caught Toyota last year, and have shown steady improvement since about the mid-1990s.

You want to solve the auto industry problem? The first step should be to break the stranglehold the dealers have on the firms. Only place in the chain--including the often-dubious management--that has done absolutely nothing to try and improve the industry in the past decade.

#29 ::: Alan Bostick ::: (view all by) ::: December 08, 2008, 12:06 PM:

I am reminded of the time late in the Soviet era when a US reporter was arrested on trumped up espionage charges (apparently in retaliation to an espionage bust in the West). After he was released, he wrote about his experience in shocking tones.

At about the same time, Ted White had been sentenced to jail time on drug charges, and was sending out his Letters from Prison to be distributed by friends in fanzine form. Ted was a lot more level-headed about his experience on being processed and confined by his jailers. And yet the factual content of his reports seemed to match very closely the factual content of the account of reporter jailed in the USSR (what was his name again? Danilof?), stripped of its fnords.

#30 ::: Josh Jasper ::: (view all by) ::: December 08, 2008, 01:05 PM:

In the US, if any part of the economic crisis is being exploited, it's by the anti-union and anti-labor forces to rid themselves of obligations to laborers. Things like pensions. Back wages. Health care.

I resent the way this fiscal crisis makes me sound in any way like Ralph Nader.

#31 ::: Xopher ::: (view all by) ::: December 08, 2008, 01:15 PM:

I think companies that are "too big to fail" should be broken into smaller pieces that are NOT too big to fail, as a condition of rescuing them.

Alternatively, any company that is too big to fail must be regulated. Closely. Like with a federal auditor sitting in on board meetings, and so on.

I expect the free-market types will like the first one more hate the first one slightly less. But if the government is going to have to pick up the pieces when something goes bust, it has a right and duty to act to prevent the going bust in the first place.

#32 ::: Josh Jasper ::: (view all by) ::: December 08, 2008, 01:41 PM:

Xopher - That suggestion rings a Bell.

#33 ::: Larry Brennan ::: (view all by) ::: December 08, 2008, 02:04 PM:

Well, the bright side is that when I clicked on that nifty Continental ad that's been running on the NYT site (and that appears in the clip) I got a super airfare to NYC!

Otherwise, it's unsurprising to see American Exceptionalism shown so clearly on the Grey Lady's homepage.

Ken Houghton @28 - I went to the car show this year, and sat in lots of cars. The only Big 3 cars that I felt showed good fit and finish on the floor of the car show were the Chevy HHR, the Ford F150 and Focus and couple of other Fords whose model names I forget. I've driven lots of Big 3 cars as rentals and the only one I even vaguely liked was the HHR.

By contrast, virtually every Japanese car (made here or made in Japan) and most of the European cars felt well made and didn't display any noticable fit and finish problems.

Further, even if the quality has gotten better (which I doubt) the Big 3 cars are still clunky on the road. I recently rented a Saturn Vue that had so much torque steer that I had to really yank on the wheel to keep the thing from going into the next lane when accelerating. How is that a good experience?

My GF and I will probably buy new cars in the next two years or so. Her list is the Mazda 3 or the Honda Fit. Mine is the Scion XB or the Nissan Cube. Neither of us are considering a Detroit car - mostly because our past experiences have been so bad. The Big 3 has a lot of PR and design ground to cover, even if their quality has risen.

And yes, the dealers do have the Big 3 hamstrung. I wonder if a bankruptcy could void those contracts, too.

#34 ::: Matt Austern ::: (view all by) ::: December 08, 2008, 03:27 PM:

I like Xopher's suggestion, but implementing it might be nontrivial. As we've discovered in the last few months, a sufficiently leveraged company in a sufficiently interconnected industry might turn out to be "too big to fail" even if it isn't particular big. Just monitoring which companies are like that, and figuring out how to break them up into pieces that really can fail independently, probably involves a fair amount of regulation.

#35 ::: Bruce Cohen (SpeakerToManagers) ::: (view all by) ::: December 08, 2008, 03:42 PM:

Matt Austern @ 34

I suspect that trying to figure out which companies are likely to be "keystone" elements of the economy* is doomed to failure. The nature of financial operatives in a capitalist system is to want to find unfair advantage; regulation, while very useful and necessary, means that the advantage is likely to be found in gaming the regulatory system. If you know how a company can become keystone by gaming the system, you can prevent the gaming in the first place; without omniscient (in fact, precognitive), regulators, you just can't do that

* Analogous to keystone species in a biome.

#36 ::: Earl Cooley III ::: (view all by) ::: December 08, 2008, 04:54 PM:

A company that can't find an unfair advantage obviously isn't allocating enough resources to their bribery budget.

#37 ::: albatross ::: (view all by) ::: December 08, 2008, 05:05 PM:

heresiarch #17: Wow, I hadn't heard that! I'm pretty skeptical that it will work out that way, but I certainly could be wrong.

Spherical Time #27: It seems almost impossible that I could both provide you with enough money to keep your company afloat for the next few years, and not somehow end up with great influence over your company's actions. Imagine Microsoft offering such an arrangement to a smaller software company. What would you expect to happen as a result?

In the case of the Big Three, they're almost certainly going to be needing more bailouts in the not-so-distant future. The willingness of anyone to lend them money, take on commitments for business from them, or buy their cars is likely to depend in part on what promises for future bailout money are made, what loan guarantees are offered in the future, etc. Taking actions that p-ss off Congress or the president will look, to GM, very much like corporate suicide, right? If Congress declares that there will be no more bailout money until the CEO goes, until a pay cap is imposed on management, until GM gets rid of their SUV line, etc., how much choice will GM have?

That's a new thing in the world. Maybe good, maybe bad, but new, and not well thought out yet.

#38 ::: Terry Karney ::: (view all by) ::: December 08, 2008, 05:33 PM:

What really ticks me off with the Big Three is the cars they won't sell in the states. They have pretty good market share overseas, but those cars don't get offered here.

Just maybe, if they'd thought US customers wanted something smaller, more efficient, etc. they'd be in better shape.

Then again, the CEO for Merril Lynch just asked for a 10 Million Dollar Bonus for his performance last year.

#39 ::: Terry Karney ::: (view all by) ::: December 08, 2008, 05:37 PM:

What really ticks me off with the Big Three is the cars they won't sell in the states. They have pretty good market share overseas, but those cars don't get offered here.

Just maybe, if they'd thought US customers wanted something smaller, more efficient, etc. they'd be in better shape.

Then again, the CEO for Merril Lynch just asked for a 10 Million Dollar Bonus for his performance last year.

#40 ::: Kevin Riggle ::: (view all by) ::: December 08, 2008, 07:55 PM:

Terry Karney @38: He got them the bailout, didn't he? Surely that qualifies as good performance!

#41 ::: Jon H ::: (view all by) ::: December 08, 2008, 09:15 PM:

Detroit needs to purge the word 'econobox' from their culture. I'm talking about fining or firing anyone who uses the word.

The term encapsulates such 70s-vintage contempt for a whole class of vehicle, it's no wonder they can't make a decent small or efficient vehicle, and they think it's a big deal that the hybrid malibu gets a whopping 2 mpg better than the non-hybrid.


#42 ::: Rikibeth ::: (view all by) ::: December 08, 2008, 10:45 PM:

John H, I think the polite term these days is "B-car." At least I saw it in a review of the field of subcompacts.

I'm actually driving one of them -- a Chevy Aveo "five-door" hatchback. It's a damned shame they didn't start promoting them until gas prices spiked -- I *love* mine. I think it handles well -- I can take every curve on the Merritt Parkway at 15 mph or more over the rated speed, without feeling insecure. Nice zippy pickup. It's comfortable to sit in the driver's seat for several hours. The hatchback can handle a week's groceries or two people's weekend luggage, maybe three. Adults can sit in the back without undue squashing. And I get 30mpg out of it most of the time, more if I'm being careful about being a leadfoot. And it's a BREEZE to park.

I suspect that if more people *tried* driving this kind of car, they'd be hooked. The only way I could love it more is if it were a convertible.

But I guess that SUVs were more profitable until people stopped buying them entirely, so they didn't promote my cute little car. *I* didn't even know about it until I got one as a rental -- but it was that rental that convinced me that I could love a subcompact.

And I do.

#43 ::: Paula Helm Murray ::: (view all by) ::: December 08, 2008, 11:03 PM:

Rikbeth, I have had a great time with my Mystique. I've been told it is an 'eurobox' but I have no complaint with that. Easy to drive, easy to park, sips gas. It is just at 100,000 miles, which for KC is a REALLY low mileage car.


The only sad thing is that it's a 1995, we bought it for Rohanna's mom, and she decided to quit driving two years ago (at 93!!!). So I have weird shit going wrong because it was SO low-mileage.

#44 ::: Rikibeth ::: (view all by) ::: December 08, 2008, 11:20 PM:

Paula, the Mystique is the twin to the Ford Contour, right? My ex used to drive a Contour. That's at least one size class up from what I'm driving -- I think the Aveo is more comparable to a Ford Focus, although not quite as small as the older Aspire.

The Contour was... okay, I guess. It felt to me like generic Car. My main complaint about it was that the seats were contoured in such a way that I couldn't easily get into or out of the driver's seat while wearing a corset.

I'm glad you're getting good use out of yours, though.

#45 ::: Anne Sheller ::: (view all by) ::: December 08, 2008, 11:36 PM:

Well, my Ford Escort wagon (manual, Cayman green) is almost 14 years old, getting close to 280K miles. It's showing its age, but I'd say Detroit has managed to turn out some durable and economical small cars.

#46 ::: heresiarch ::: (view all by) ::: December 09, 2008, 12:10 AM:

Xopher @ 31: "I think companies that are "too big to fail" should be broken into smaller pieces that are NOT too big to fail, as a condition of rescuing them."

I feel that would be a nice complement to anti-trust law.

albatross @ 37: "I'm pretty skeptical that it will work out that way, but I certainly could be wrong. "

I'm skeptical too, but then I was pretty skeptical that the US would ever elect a black president. The times, they are a-changin'.

#47 ::: Bruce Cohen (SpeakerToManagers) ::: (view all by) ::: December 09, 2008, 12:19 AM:

heresiarch @ 46

I feel that would be a nice complement to anti-trust law.

We could call it the lack-of-trust law.

#48 ::: Josh Jasper ::: (view all by) ::: December 09, 2008, 12:28 AM:

This just in bailoutwise

Democrats bent to the will of the president on several key demands, most notably in agreeing that the emergency funding would be drawn from an existing loan program aimed at promoting fuel-efficient technologies.

Still, the White House objected yesterday to several elements of the Democratic proposal, congressional aides said, including requirements that the car companies notify Washington of any transaction of more than $25 million and that they pull out of lawsuits against states seeking to enforce tougher tailpipe-emissions standards.

Yep. Still gunning for that Worst President Ever award.

#49 ::: Linkmeister ::: (view all by) ::: December 09, 2008, 12:58 AM:

I drive a 1997 Geo Metro, bought in March of 1998 with 13K put on it when it was part of a National fleet. It now has 51K on it and has given me very few problems (the driver-side manual window gears have stripped twice, which is annoying and $100-$200 each time, but that's better than power window failure at $350 a pop like previous cars I've owned). I'm knocking on wood as I type.

The Geo was a joint venture between GM and Suzuki; in 1998 GM took over the whole line and put its own badge on it.

(Side note about the inherent mendacity of car salesmen: when I bought it it was off a Budget lot; the guy assured me they'd taken it in trade from a customer (I was curious about the 13K in less than a year; this is an island, after all). When I got home after all the papers had been signed and started admiring it I noticed that there was a National Car Rental sticker on the door post advising what the proper air pressure was for each tire.)

#50 ::: Bob Rossney ::: (view all by) ::: December 09, 2008, 01:20 AM:

Patrick @ 24:

The stories are spun differently on the front page for a bunch of different reasons. You incline towards one of them, which, as you put it, is "Americans good! Foreigners sinister!"

Well, okay. But the first story is about the possibility - possibility, mind you - that the billions of dollars of public money that Congress is contemplating handing over to the auto industry might have some conditions attached to it. The second story is about the Russian state-security apparatus being used to intimidate senior executives in large industries by threatening them with investigation and prosecution on trumped-up charges.

"In fact," you say, "I’m sure the Russian elites, contemplating their problems, are telling themselves high-minded stories that are more similar to the internal narratives of our own aristocracy than they are different." Even a casual perusal of the history of Russia's extractive industries over the last two decades should suggest that no, it's not so similar. Nobody in Congress or the Treasury Department is thinking that the time is right to get the FBI to throw Richard Wagoner in prison for having that guy whacked back in 1992, so that David Addington can run GM as his private fiefdom. I'd bet folding money that a substantial part of what Dmitri Rybolovlev's thinking right now is whether or not he's going to get out of this situation alive. Alan Mulally is thinking about having to reduce his salary to a dollar a year. That's not the same narrative.

You end with, "And it’s hard to look at the recent raids on the commonweal by our own merchant princes and not think, hm, this looks a lot like the behavior of a mafiya." What? No, it isn't. It's not remotely hard to not think that. Thus far the bailout of Wall Street has been substantially free of corpses turning up with their hands and feet chopped off, restaurants sprayed with automatic-weapons fire, or journalists being arrested, or beaten, or picked up by armed men who may or may not be cops and shot in the head. Nobody at Lehman Brothers has fled the US in fear for his life, and then been tracked down in another country and poisoned to death.

I've worked in the auto insurance industry. I know how imaginary the line between "business" and "organized criminal conspiracy" can be. But the differences in character between how American and Russian oligarchs do things is not trivial, and it's not cosmetic. And yes, I find the Russian approach kind of sinister. Much as I'd get a certain visceral satisfaction out of learning that the CEO of Countrywide had been whisked away to a psychiatric hospital, I'm kind of glad we don't do that. I really don't think this stems from my belief in American exceptionalism.

#51 ::: Mez ::: (view all by) ::: December 09, 2008, 02:19 AM:

James Davis Nicoll (@26) "the corporations giving money to the government"
I was under the impression that corporations managed to give very little (comparatively, particularly when you nett out the assorted deductions, subsidies, etc.) to the government (that is, in taxes to be used for the good of the governed), whereas they did dispense quite a bit to political parties (which I see as private organisations) for their own partisan purposes — which may or may not be to the benefit of the country and its people in the main.

BTW, JDN, our media here in Oz has been neglecting the Canadian Crisis shamefully. I hope nothing too nasty has happened in your woodshed since I hunted some news out last. Are we still awaiting the drop of the second shoe?

#52 ::: Serge ::: (view all by) ::: December 09, 2008, 05:31 AM:

linkmeister @ 49... the inherent mendacity of car salesmen

This reminds me of the glory days of Mad Magazine and their parody of Planet of the Apes. Doctor Zaius explains to Charlton Heston that, on his world, orang-outang are at the top, followed by chimpanzees, then gorillas, then humans, and, at the very bottom, used-car salesmen.

#53 ::: Jason Harx ::: (view all by) ::: December 09, 2008, 12:35 PM:

Hahahah! Great catch!

#54 ::: cajunfj40 ::: (view all by) ::: December 09, 2008, 01:56 PM:

Rikibeth @#42 and Linkmeister @#49: Both the Aveo and the Metro are/were Made In Korea. The only car currently made on US soil by a US automaker that gets an EPA rated 30mpg or better average (based on the EPA's default city/highway mix on their mpg.gov website) is the Chevy Cobalt XFE with manual transmission. The Ford Escape Hybrid FWD (and re-badged clones) also gets 30 mpg or better, but it's not a "car" and costs twice as much.

I'm getting tired of holding my left foot to the floor sitting in traffic in my old manual trans 1999 Chevy Prizm (rebadged Toyota Corolla built in the NUMMI plant in California), so when I get some financial breathing room I'm likely to buy something with an automatic - and I won't buy unless it equals or exceeds the performance/economy of my current car and doesn't cost a ridiculous amount. That unfortunately excludes all current domestically manufactured US-branded cars...

The US auto industry has some work to do, IMHO.

#55 ::: sienamystic ::: (view all by) ::: December 09, 2008, 04:55 PM:

Her list is the Mazda 3 or the Honda Fit.

For what it's worth, we bought a new Fit last year, and drove it from Virginia to Nebraska during a relocation. With the two back seats folded down, it held a surprising number of our worldly goods, plus three very irritable cats in a large kennel.

We love it. Aside from being a bit squeezed in the winter when both of us are wearing big bulky coats, it fits two broad-shouldered people surprisingly well, and has a lot of elan. When we were shopping for cars, we test-drove just about everything in its class, and none of the US-made cars really seemed to have everything we wanted or just didn't have the fit and finish we were hoping for.

#56 ::: shadowsong ::: (view all by) ::: December 09, 2008, 11:11 PM:

Regarding the Honda Fit: I have Toyota's equivalent, the Yaris. I love that thing so much - short bumper-to-bumper, tall in hip height, good turning radius, and a minimum of 30mpg. I would definitely recommend springing for the power mirrors and ABS though.

#57 ::: Terry Karney ::: (view all by) ::: December 10, 2008, 02:35 PM:

I'm not sure I'd say there was no parallel between mafia and the bailout.

In effect the Wall Street boys seem to be doing a cross between a protection racket (nice economy you go here, be a shame if anything should happen to it) and the sort of exploiting of businesses they, "buy" into, i.e. looting the place and leaving the owner with the debts.

By and large, even in Russia, mobsters prefer to not klll people, as they are only useful as examples to others, lest they think of refusing to pay.

#58 ::: Peter Erwin ::: (view all by) ::: December 10, 2008, 04:52 PM:

Chris @ 19:
@#14: People with critical thinking skills might note that if Pakistan backed the group *before* the attacks, that doesn't necessarily imply that Pakistan knew about, let alone supported, the plan to carry out the attacks, or intends to go on supporting the group after it carried out those attacks (if indeed it did at all and isn't just "suspected" by India *because* of its links to Pakistan).

But like most MSM fare, the article isn't intended for people with critical thinking skills. Too small a demographic.

Actually, if you read the article, you'll find that it addresses at least some of those issues. It even manages to interview some people who aren't "American intelligence and counterintelligence officials", despite what the subhead implies:

Moreover, some terrorism analysts said that Lashkar’s dependence on its original sponsors had lessened in recent years. With wealthy donors in no short supply, an established recruiting pipeline and a series of training camps, Lashkar “has outgrown ISI’s support,” said Urmila Venugopalan, a South Asia analyst for Jane’s Information Group.

It's perhaps not always wise to assume the article is exactly what the headline implies (in part because the writers of the article don't generally have anything to do with the headline).

#59 ::: C. Wingate ::: (view all by) ::: December 10, 2008, 05:01 PM:

re 57: The first part of that seems to me to be a real stretch. If they had some sort of volitional threat against the economy as a whole, they wouldn't be in the straits they're in.

#60 ::: Michael Roberts ::: (view all by) ::: December 11, 2008, 11:35 AM:

Oh, Patrick! Nice catch, man!

#61 ::: Terry Karney ::: (view all by) ::: December 11, 2008, 10:10 PM:

It's not a direct parallel, but I've seen a number of flailing articles, explaining we have to pour money into AIG, CitiGroup, BearStearns, because if they go down, the economy goes down with them.

Then we get told they are so smart that adding any sort of oversight would screw the pooch, and the economy would collapse; because only the money boys understand it well enough to spend that sort of money properly.

And examples of how other economies, with similar problems... those don't count, so looking to the Swedish model, and demanding accountability, return on investment, and direct oversight of the actual use of the money; forcing it out into the economy at large... wouldn't work, would be counter-productive.

Nope, the only way to avoid economic meltdown is to give them a trillion dollars (so far) and not even think of stopping until they say it's better.

AIG's coming back and saying the deal they got was too restrictive, and getting Paulson to make it easier on them doesn't look like the work of honest actors.

#62 ::: Bruce Cohen (SpeakerToManagers) ::: (view all by) ::: December 12, 2008, 02:14 AM:

I heard part of an interview with the chairperson of the oversight committee, who said that the TARP money is being handed to anyone who can demonstrate that:

1. They are a bank
2. They're not failing so badly they have no assets at all.

They don't even have to show a higher than room-temperature thermometer reading, which means a lot of that money is going to go to zombie banks.

#63 ::: Micah ::: (view all by) ::: December 12, 2008, 07:32 AM:

@38: Aside from the fact that after it was leaked that he was asking for 10 million as a bonus he declined any bonus, the situation with Thain is not the same as with many of the CEOs of these firms. He started as CEO last December, AFTER most of the major mistakes have been made. If he were being fairly evaluated just for how well he has performed since then, he might deserve a bonus.

As far as I've seen, most every loss they've had this year was from a purchase made before Thain came into the position. I'm an outsider and can't really say, and he certainly might deserve nothing for his performance, but I've seen no clear reason to attribute the current condition of Merril to Thain's leadership.

#64 ::: Earl Cooley III ::: (view all by) ::: December 12, 2008, 09:41 AM:

No one on the planet deserves a ten million dollar bonus unless that's figured as a percentage of net profits. Bonuses figured on excessive profits (like from gasoline price gouging) should trigger jail time, not praise.

#65 ::: Jason Aronowitz ::: (view all by) ::: December 12, 2008, 01:59 PM:

Somewhat on-topic, there is a, to me, significant difference in today's coverage of the auto bailout by the Washington Post and the NY Times. The Times explicitly mentions how much of the difference in “hourly compensation” between Detroit and the foreign-run plants is due to Detroit’s costs for health care and retirement for currently retired workers. Neither paper mentions that this difference exists because the Detroit companies were allowed not to reserve adequately during the years those liabilities were incurred.

Today’s NYT:
http://www.nytimes.com/2008/12/13/business/13uaw.html?_r=1&hp
In 2007, the U.A.W. agreed to sharply lower starting wages and benefits for newly hired autoworkers at the Detroit companies, as well as for workers in jobs away from the assembly line, like janitors and maintenance personnel.
But the cuts did not affect most long-time union members, whose hourly pay and compensation is about $55 an hour. The figure ranges above $70 an hour when the automakers’ costs for health care for retired workers and retirement benefits is factored in.
By contrast, workers in plants run by foreign companies in the United States earn about $45 an hour, and the nonunion companies do not have the hefty burdens for future “legacy costs” that are faced by the Detroit companies.
And the WaPo:
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/12/AR2008121201232_4.html?hpid=topnews&sub=AR&sid=ST2008121201385&s_pos=
The negotiations were based on a plan advanced by Corker, the most junior member of the Banking Committee. His proposal sought to reduce the wages and benefits of union workers by requiring the automakers' total labor costs to be "on par" with Honda and Toyota.
Corker -- a freshman senator who a few years ago was mayor of Chattanooga -- was a strong opponent of the House plan to save the automakers.
He and other Republicans had revolted against the earlier plan because they thought it did not go far enough in forcing contracts on the UAW. GM officials have told Congress, for instance, that under the most recent contract, labor costs would be about $62 per hour in 2010 -- $30 per hour in wages and slightly more than that in benefits to current workers and retirees. That's about $14 per hour more than at Toyota's U.S. plants.

#66 ::: SamChevre ::: (view all by) ::: December 12, 2008, 02:38 PM:

Neither paper mentions that this difference exists because the Detroit companies were allowed not to reserve adequately during the years those liabilities were incurred.

That's true, but not really accurate.*

No one managed to accurately project retiree for the 1980 to present health-care costs. Every estimate--Medicare, companies, insurers--EVERY estimate--was wrong by a factor of about 5. That means that even maximal reserves--the most the IRS will allow to be held--were wildly inadequate.

We do have a taxpayer-paid universal single-payer plan for retirees over 65. The lack of universal healthcare isn't the problem when talking about retirees.

*I work as a life insurance actuary.

#67 ::: Jason Aronowitz ::: (view all by) ::: December 12, 2008, 03:06 PM:

SamChevre @#68:
That makes sense. Ignoring health care, is the statement accurate for retirement costs? I recall companies in the 1980's assuming something close to 15% long term investment returns for their defined benefit obligations.

#68 ::: SamChevre ::: (view all by) ::: December 12, 2008, 03:24 PM:

For pension costs specifically, I don't know the answer. Since the VEBA cost-transfer applied to retiree health benefits, my assumption is that the bulk of the current cashflow problem relates to those benefits. Pensions to existing retirees shouldn't be legally subject to bargaining outside bankruptcy, while health benefits are, so I'm assuming that the concessions from the union with regard to retirees would have to center around the health benefits.

Until ERISA(1974), pensions didn't have to be reserved for. Pension accounting is very tricky. It's very sensitive to the expected earnings rate and to current asset values; pension regulators want to know that your pensions aren't underfunded, and the IRS wants to know that they aren't overfunded--so while there's some discretion in funding levels, there is less than might be expected. (For one thing, there is no ability to over-reserve in good years.)

#69 ::: P J Evans sees spam ::: (view all by) ::: July 19, 2014, 12:26 AM:

slightly misspelled: apparently they think that will keep it from being noticed.

#70 ::: Cadbury Moose spots mustelid spam ::: (view all by) ::: August 24, 2014, 10:09 AM:

Because everybody wants weasel?

Linkspam @ #70.

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