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Name: Michael Goodell
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The Man Who Saved America

 
September 10, 2001. The United States was mired in an economic slump. It was teetering toward recession, and it was about to get a lot worse. How much worse? The very next day, four Boeing 757's took off from Boston and New York. These planes, capable of carrying close to 250 people each, contained a total of 201 passengers and crew, combined.
 
How do we know this? Because that’s how many people died when they were flown into the World Trade Center, the Pentagon, and a field in Pennsylvania. This is one of the forgotten stories of the day which became known as 9/11.
 
When those four planes, two each operated by American and United Airlines, took off on lucrative transcontinental flights, they were barely 20% occupied. When was the last time you were on a flight in which eight out of 10 seats were empty? That is an example of how bad the American economy was on that fateful morning.
 
Needless to say, the economy grew dramatically worse in an instant when those four planes reached their unscheduled destinations. Virtually all business screeched to a halt. The stock markets were closed. Air traffic was discontinued. Shopping malls and grocery stores were vacant. Streets and highways were empty. Normal everyday commerce was abandoned.
 
This would have been a dire development in the best of times, but given the state of the economy before that day began, the situation threatened to spin tragically out of control. If something wasn’t done to encourage people to come out of hiding, the recession could have turned into a depression with far reaching consequences.
 
Enter General Motors CEO Rick Wagoner. Wagoner was stranded in Switzerland. He couldn’t get a flight home, not even on a private jet (this was back in the days when car guys could fly private jets without incurring the wrath of nattering Congressional nonentities), because US air space was closed.
 
It didn’t take a Nobel winning economist to recognize that things were in desperate straits back home, but only Wagoner had the vision to identify a solution. Only Wagoner acted to help get the American economy moving again, to induce American consumers to emerge from their shells.
 
Only Wagoner called the office to tell his company to start selling cars at 0% interest. On September 19, GM introduced the program, and people flocked to showrooms across the country. They went, they kicked tires, they test drove, many of them bought, and they all returned home safely. Gradually, the word went out. It was okay to continue to function. Life would go on.
 
The economy stabilized, at least for another eight years. By that time General Motors was teetering on the edge of collapse. Even if Wagoner had another great idea, it wouldn’t have mattered. He, and General Motors couldn’t have implemented it.
 
This morning Wagoner went to the well one last time. After several years of painful cuts and desperate acts to stave off destruction, the CEO made one last gesture to save his company. Confronted with the Obama administration’s ultimatum, “Either you resign or we let GM fail,” Wagoner fell on his sword, and resigned, in order to buy time for one last infusion of cash, one last chance to allow General Motors to survive.
 
With this last act, Wagoner has ensured that he will go into the annals of popular history as the man who drove the world’s greatest industrial company to the brink of destruction. All the errors in judgement, all the short-sighted decisions, all the criminally stupid styling decisions will be laid, unjustly, at his feet. He will fade away, into obscurity. Into disgrace.
 
Yet before the last shovel of sod is tossed on his professional grave, it should be remembered that, for one shining moment, on September 19, 2001, Rick Wagoner was the man who saved America.
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Turkeys Running Wild

Some years ago a  a spurious bad debt popped up on the credit rating of a young acquaintance, blotting his good name. A company called TRW was handling his account, and after repeated unsuccessful efforts to navigate the bureaucracy, he finally cried out, “Now I know what TRW stands for–Turkeys Running Wild.”
 
This is also a good description of those in Washington tasked with picking winners and losers in the American economy. Today, after a quiet weekend tete-a-tete between executives and the US Treasury Department, the federal government shoveled another $20 billion dollars down Citigroup’s gaping maw, and promised to make good on another $300 billion or do of corporate debt. At no time during negotiations was the question raised as to how the Citigroup executives traveled to the meeting. No one stood up and publicly mocked or ridiculed them. No one called them incompetent, or stupid, or brain dead. No one demanded that they resign, or be fired, or be tarred and feathered and ridden out of town on a rail.
 
Thus the difference between Detroit auto manufacturers and New York banks. By all accounts, the CEO’s of Detroit Big Three, GM’s Rick Wagoner, Ford’s Alan Mulally, and Chrysler’s three-headed monster, Bob Nardelli, turned in a pathetic performance during Congressional hearings last week. They were, most emphatically, not ready for their close ups.
 
The question is, could they have been ready? The answer is no. Not if they expected to be treated with the sort of respect illegal aliens or terrorism-supporting Islamist groups routinely receive from Senators and Representatives. Watching the hearings, it was painfully clear they hadn’t been summoned to testify, they were there so each Senator and Representative could grandstand for the folks back home. “This one’s for you,” they seemed to be saying, to each of their constituents who had ever bought a lemon, or had a bad experience with a car dealer; which is just about everyone in the country.
 
It was also a chance to posture, preen and pose, as well as to demonstrate, not only an inability to stay informed about the crisis confronting American manufacturing, but an inability to read and comprehend the analyses compiled by their staffs.
 
One exchange effectively summed up the entire proceedings. New Jersey Senator Bob Menendez, while grilling Nardelli, asked how much cash Chrysler had burned in the first nine months of the year. Nardelli said, “We have $6.1 billion on hand now, which means we went through–“
 
Menendez interrupted to ask if that was how much Chrysler had on hand, or how much they went through. Nardelli attempted to respond, “On hand, but–“
 
“I don’t want to know how much you have on hand,” Menendez thundered. “I want to know how much you burned through.”
 
Nardelli’s mouth moved helplessly as he searched for a suitable response. Piling on, Menendez suggested surely as CEO Nardelli must know how much his company had spent. Clearly, Nardelli knew. In fact, he had been in the process of answering when Menendez began his Abu Ghraib routine.
 
The Big Three CEO’s looked so ill-prepared was because they were. They had come prepared to present facts, to make a case; they hadn’t come prepared for a public whipping. Maybe they should have expected a throw down. Maybe their inability to do so represents a certain naivete and a failure to do their homework. They looked distracted, confused and utterly at sea when repeatedly asked what plans they had to turn things around.
 
“What plans?” They surely wanted to scream. “What plans? Over the past four years we’ve driven the State of Michigan into an economic black hole through the implementation of our plans. We’ve laid off and bought out tens of thousands of blue- and white-collar employees, and closed dozens of plants while implementing our plans.”
 
They would have been right, but that really didn’t matter. They weren’t there to make a case. They were there to deliver a pound of flesh apiece. One day soon, after the blood’s been mopped up, and the chunks dried off and placed on the scale, they will get their bailout. It won’t be for them, but for the union employees still in their employ. Maybe the economy will turn around in time for them to start selling cars and trucks again, and the Big Three can lurch along until the next crisis.
 
In the meantime, maybe Detroit automakers will figure out they’re in the wrong business. Maybe they’ll relocate to a sexier address, and instead of just selling cars, they can figure out a way to spread the risk around. They can fob their sophisticated financial instruments off on the geniuses over at Citigroup and Merrill Lynch, and call them, say,  Securitized Utilitarian Ventures, or SUV’s.
 
Sell enough of them, and maybe even Senator Menendez will treat them with respect.
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Pigs at the Trough

The title is meant to refer to our elected officials in Washington, the Senators and Representatives who turned the ludicrously huge bailout bill into an orgy of self-aggrandizing expenditure. It isn’t really fair, though, that title. It is nothing more than a gratuitous insult to pigs.

One can argue for or against the bill, which just passed the House of Representatives, on its merits. One can question the wisdom of bailing out those guilty of serious fiscal indiscretion. One can argue that the market must have the opportunity to work itself out, that the consequences, even if they extend so far as to plunge the world into a massive depression, are not nearly as severe as substantially altering, with virtually no debate, the philosophical, moral, and structural assumptions under which our economic system functions. Or one can argue that the bill doesn’t go far enough, or goes too far in the wrong direction, that it is the poor beleaguered mortgage holder who is most in need of succor.

What is beyond dispute is the fact that a three-page bill has turned into a 400-page behemoth. What on earth does a provision requiring health insurance companies to give "equal quality" of treatment to the mentally ill have to do with acting to forestall a global stultification of the credit markets? All that particular clause will do is ensure the legal system will be clogged with a trainload of lawsuits for years to come. Then again, maybe that was the intent of that provision.

In the vice-presidential Debate, Sarah Palin made frequent references to her and John McCain’s goal of ridding Wall Street of greed and corruption. While getting rid of corruption is always a good plan, removing greed from Wall Street will pretty much eliminate Wall Street. Furthermore, it misses the point. Greed didn’t cause this crisis. Hubris did. Hubris always occurs at the end of a bubble. It leads to the sort of excesses which resulted in the subprime mortgage meltdown. The important point is that the greed that needs to be eliminated is not on Wall Street, it is in Washington.

Our elected officials are morbidly greedy. Greedy for power. Greedy for glory. Greedy for the perpetuation of the legislative priesthood from which they derive their dominance. Monetary greed is manageable. It is understandable. It is an entirely human characteristic. Greed for power is unconscionable. It is dangerous to individual rights and freedoms. It is the single defining quality of Congress today.

It is time to clean house. Our system of government today is cluttered with the trappings of action which serve only to obscure the lethargy which obstructs any meaningful reform and even the pretense that Senators and Representatives hold the public’s interests at heart. Occasionally, when some crisis appears, they will bestir themselves to act, and to act quickly. Inevitably, the action they take is ill-considered and hasty, and carries with it the seeds of further damage. Think Sarbanes-Oxley. Think the financial intervention bill passed today.

Aside from making the world safe for children’s bow and arrow manufacturers, the bill, among other things, provides for the Federal Government to take equity positions in American companies, and it allows the government to determine how much individuals can earn. This was done in the name of fairness, and it will be disastrous down the road. It is the thin end of the wedge which ultimately leads to socialism.

Larding this legislation with a witches’ cauldron of special interest giveaways is emblematic of the structural flaws of our legislative system of government. It is beyond tawdry. It is despicable, and it should lead the entire nation to take recourse in the time-honored cry of "Throw the bums out." The only way to reform Wall Street is to reform Washington first, and the only way to reform Washington is through the wholesale removal of every elected official there.

Every incumbent should be voted out, and every voter should pay close attention to the behavior of those who replace them. They should be given one term in which to return to serving the people. If they don’t, then they should be voted out, too. They should be voted out in the primaries, which would result in an election with no incumbents. This process should be repeated as often as necessary until the system is fixed.

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