Ex Cathedra

You think the scale-back of the Constellation program was bad news?

Huntsville has built its economy around weapons of war.

According to the Defense.gov – Quadrennial Defense Review, they’re useless weapons for the wrong damn war.

As you sowed, Huntsville, so shall ye reap.

Better get our smart people started on building a sustainable economy.

Reasons I’m not optimistic about saving the auto industry:

1. Forget the platitudes about nobody leading. Nobody’s following. Cheney told Senate Republicans in a closed door meeting that unless they get on board, “It’s Herbert Hoover time.” The Old Right couldn’t manage to overcome their deep emotional impulses enough to listen to him.
   1. The South was built on slavery and kept alive by maintaining a permanent underclass. It attracts foreign auto makers because Southern states have been battling to see who can come closest to turning their state into a third world country. They see the existence of organized labor as a threat to their way of life. And rightly so. Cooperation with the bridge loan plan is tantamount to admitting their fundamental premises are wrong.
   2. Republican top cats in the North gained their wealth and power by decades of suppressing rivals for their power, especially organized labor, and by manipulating government to maintain and increase their inherited wealth. They think of the lower and middle classes as prey.
   3. The Republican Party is an alliance between those two: admirers of John C. Calhoun and admirers of J.P. Morgan and John D. Rockefeller. Seduced by Rove’s vision of a permanent Republican majority, neither faction has any experience in compromising or any incentive to compromise. The crumbling of that alliance in the 2008 election and the consequent struggle for the soul of the party hardens those ideological loyalties and makes this precisely the wrong time for any Republican to consider a third path of cooperation, which they’re bound to see as capitulation.
2. Reprogramming TARP funds is unlikely because:
   1. Bush can’t take credit for riding to the rescue because Obama had already come out strongly and persuasively for reprogramming TARP money.
   2. TARP is out of money because, instead of keeping money flowing, Wall Street has been shoveling our TARP money into stockholder pockets and even stupider leveraged investments than the ones that got them into trouble in the first place.
   3. Paulson is going to have to explain what happened to all the TARP money, and he can’t.
3. Free market ideologues in the Administration and protectionists in the Congress have so badly damaged trade that if Treasury turns on the printing presses, they’re facing a Weimar Republic style inflation.
4. The auto industry, like the rest of American industry, has happily fed expectations for insane returns on investment that they can’t possibly meet. Management is willing to make symbolic sacrifices like parking their jets. Recently they’ve done more. They’re doing R&D and listening to customers instead of spending huge effort trying to push nothing but high-profit vehicles. Labor has made sacrifices over the years. Business isn’t just labor and management; it’s a tripod: labor, management, and capital. Capital is not only unwilling to sacrifice, they want more, more more!
5. Capital isn’t some abstract entity or the moneybags guy on the Monopoly board. It’s us, or rather the more affluent of us, here and abroad. We’ve been hooked on high ROI and the only way to come down is through detox. The only modestly affluent will come down the hardest. They’ll get eated. Which explains why educated urbanites and suburbanites have figured that out and have largely deserted the Republican Party.

Well, when Obama gets in, we’ll have nice roads and bridges to ride our bikes on.

My younger son Robert has a rosier scenario. Bush, who thinks of nothing but his legacy these days, reprograms the TARP money and becomes a hero in his own mind. He throws Paulson and Bernanke under the bus, leaves the mess to Obama, and leaves Congressional Republicans in the short term and the Republican Party in the long term to fight it out among themselves as a gaggle of rugged individualists. He never understood the alliance that kept the Republican Party going, and giving the auto industry a bridge loan by fiat is a perfect match for his vision of a unitary Executive.