Too many laws get approved as a form of legislative therapy -- as a way to make politicians feel needed, relevant and better about themselves. Here's one excellent example. Whether or not those new laws make much sense -- if they can be enforced -- is of secondary concern. It's all about feelings: how we feel about them and how they feel about themselves. I'm open minded on the question of whether this simply mirrors, or whether it feeds and perpetuates, our national neurosis.
How much trouble we all would be saved -- and how much madness could be avoided -- if, instead of letting them "act out" legislatively, we simply paid their psychiatry bills instead.
Showing posts with label Congress. Show all posts
Showing posts with label Congress. Show all posts
Monday, March 7, 2011
Thursday, December 30, 2010
Dead Sea Scrolls
"Archaeologists excavating the west side of the U.S. Capitol grounds reportedly have stumbled upon a frayed, faded, soiled old parchment, dating to the nation’s earliest days, which they say could have explosive implications for what goes on in the chambers above. Scholars hope the document, which they call “The Constitution,” may hold long-forgotten clues about what motivated the colonists to free themselves from British rule. It may, they say, even be the original blueprint, according to which the former republic was supposed to be organized. The political implications could be explosive, according to those who’ve read it, since it reportedly sets explicit limits on the size and scope of the central government and grants states and individuals a level of autonomy – a level of “freedom” – that is unthinkable today. In a related development, some members of Congress are threatening to open the next session by actually reading this so-called Constitution into the public record, which critics call a subversive, politically-motivated stunt designed to dredge-up old longings for liberty and sow doubts about the now-widely-accepted federalization of everything. It’s an interesting old relic, say most capital city insiders, but irrelevant to how things work in the modern era."
This parody of a (not-so-farfetched?) future news story is prompted by reports that subversives in the U.S. House of Representatives plan to open the 112th Congress by reading the U.S. Constitution, out loud and right in front a everybody, and have instituted new rules requiring that any new bill introduced cite some constitutional authority before the clerk will file it.
The moves, meant to show Tea Partiers that Republicans have gotten their pro-Constitution message, naturally evoke skepticism in certain quarters:
"I think it's entirely cosmetic," said Kevin Gutzman, a history professor at Western Connecticut State University who said he is a conservative libertarian and sympathizes with the tea party. "This is the way the establishment handles grass-roots movements," he added. "They humor people who are not expert or not fully cognizant. And then once they've humored them and those people go away, it's right back to business as usual. It looks like this will be business as usual - except for the half-hour or however long it takes to read the Constitution out loud."
But also enthusiasm:
""It's a big deal," said Brendan Steinhauser, director of federal and state campaigns at FreedomWorks. "That's a very basic starting point for all legislation - not only should we do it, can we afford to pay for it, but can we do it?"
Most, like me, probably will adopt a wait-and-see attitude about this renewed reverence for The Constitution. "You can do the talk, but you have to do the walk," one Connecticut Tea Party leader told the Post. "It may be an olive branch," said another. "People are excited to see that our leaders know there's a relevance to the Constitution in the process. But I don't think it will make people any less vigilant in looking at the laws that are being introduced."
Wednesday, December 22, 2010
They Shoot Horses Don't They?
Sens. Mark Udall and Michael Bennet reportedly fear that some important items for Colorado will fall along the wayside if the lame duck Congress fails to pass an omnibus, everything-but-the-kitchen-sink public lands bill by the time it adjourns. But I say let the lame duck session, and everything left unfinished, die, since little good can come from this sort of 11th-hour sausage-making. They shoot horses, don't they?
Most Americans still don't have a clue what was in the last catch-all public lands monstrosity, rammed through in early 2009 in similarly-rushed circumstances. That "omnibus" was a dumping ground for 160 bills that couldn't find any other way of garnering majority support. And here we are, less than 2 years later, engaged in the same tawdry exercise. The only reason Congress can get away with it is that this really is (what Gore Vidal called) The United States of Amnesia.
If the items Udall and Bennet seek have enough merit to win a majority the honest way -- and some might -- the senators should have a very good chance of reviving them in the next Congress. If the only way to pass good bills is to package them with bad ones, the system really is broken.
It's time to treat this lame duck just as we treat lame horses, by putting it out of its misery, before it can do any more harm. If these items have to die with it, so be it.
Most Americans still don't have a clue what was in the last catch-all public lands monstrosity, rammed through in early 2009 in similarly-rushed circumstances. That "omnibus" was a dumping ground for 160 bills that couldn't find any other way of garnering majority support. And here we are, less than 2 years later, engaged in the same tawdry exercise. The only reason Congress can get away with it is that this really is (what Gore Vidal called) The United States of Amnesia.
If the items Udall and Bennet seek have enough merit to win a majority the honest way -- and some might -- the senators should have a very good chance of reviving them in the next Congress. If the only way to pass good bills is to package them with bad ones, the system really is broken.
It's time to treat this lame duck just as we treat lame horses, by putting it out of its misery, before it can do any more harm. If these items have to die with it, so be it.
Wednesday, December 3, 2008
All Roads to Ruin -- and Perdition -- Run Through Washington
Can Washington save the automakers? Should Washington save the automakers?
Perhaps a better question -- one posed in the thought-provoking piece below -- is whether the Big 3 can survive Washington's "help," given the straight jacket of strings that will come attached. The piece also underscores a point I made last week: that a history of meddling by the Experts on Everything inside the Washington Motor Company contributed significantly to the industry's plight -- just as it contributed to the larger economic car crash that's unfolding.
I don't endorse all the writer's conclusions -- especially his view that the company's are owed a bailout because of the burdens Washington imposed -- but his analysis is otherwise sound.
But enough of my commentary. Here's the piece:
Can the Big Three survive a bailout?
By Jack Nerad
IRVINE, California (CNN) -- The Big Three automakers yesterday presented impressive plans to Congress that justified their need for bridge loans to help them regain their competitiveness in light of a vehicle market that has crashed into a wall.
Such loans won't simply help support a vital portion of American industry, they will help prevent a much greater potential economic disaster. The commercial and strategic importance of the auto sector simply cannot be overestimated.
That being said, we are reminded of the old phrase, "Watch what you wish for; you might get it." Because as we watched the chief executives of the Detroit automakers make their second trek to Washington to seek loans from the federal government that could stave off disaster, we have to ask the unexpected question, can the Big Three survive a federal bailout?
An undiscussed but critical part of whether government intervention will succeed is determining whether the inevitable strings attached to the federal funds will bind the Big Three into untenable positions like Gulliver in Lilliput.
Loan assistance from the federal government that tries to control the companies too tightly, that forces them to bring to market vehicles that the public may not want, might simply assure that they fail somewhat later rather than sooner. And in that scenario the American taxpayer and consumer is the biggest loser.
That question must be asked because the historical dynamic between the federal government and the domestic auto industry is a relationship that has been, at best, rocky and often openly antagonistic.
Jump back to 1975 and the institution of the Corporate Average Fuel Economy requirements designed to limit our reliance on foreign oil in the wake of the Arab oil embargo. Instead of simply limiting foreign imports or adding federal taxes to fuel costs to give consumers an incentive to buy more fuel-efficient vehicles, the government instituted byzantine regulations that required American manufacturers to build (or at least market) fuel-efficient cars just so they could continue selling the cars and trucks they were already known for.
Since the United States had always been a country of "cheap gas," (a tradition that continues, by the way) American car companies were not geared up to build small, fuel-efficient cars, but foreign manufacturers were. The result was that Americans were almost forcibly exposed to import vehicles, and many American consumers liked what they found.
The CAFÉ regulations accompanied by inexpensive gasoline were analogous to plopping consumers into the middle of a giant candy store and then forcing the candy manufacturers to somehow persuade a percentage of consumers to buy broccoli instead.
When all was said and done, the CAFÉ rules ended up giving a strong leg up to the Big Three's import competitors, putting their market share on an upward curve that hasn't ceased climbing.
Of course, having helped push American consumers into import cars, albeit inadvertently, the federal government then tried to reverse the trend through new intervention.
At the urging of the U.S. government, the Japanese manufacturers adopted "voluntary"
restraints on their exports of vehicles to the U.S. beginning in 1981. The goal was to give U.S. companies "breathing room" so they could catch up to the Japanese in producing small, fuel-efficient vehicles. (Sound familiar?)
Again, this might have seemed a worthy plan at the time, but it had several unintended consequences that ended up doing much more harm to the domestic manufacturers than good. In the short term it limited supply of popular Japanese-built vehicles, which resulted in windfall profits for the dealers of the top imports, helping those brands establish very strong dealer networks.
It influenced the import manufacturers to move up-market both by building more expensive vehicles and by establishing luxury brands like Acura, Lexus and Infiniti. And it gave strong impetus for the import manufacturers to build plants here in the United States. Today a large percentage of the "import brand" share of the U.S. market -- more than 50 percent of the total light-vehicles sold here -- are vehicles built by Americans in foreign-managed factories on U.S. soil. Ironically, to counteract this, the Big Three automakers have increasingly moved production from the U.S. to lower-labor-cost countries like Mexico.
So what are the implications of this history lesson? The first takeaway is that a portion of the woes the domestic Big Three are suffering today are the result of current and past federal government policies, so it seems fair that they be accorded government assistance now in time of dire need.
But equally important, while the Big Three automakers might well be accused of not correctly gauging the needs and desires of the American buying public, one group that is demonstrably much worse in that endeavor is Congress. If the U.S. government were a car company, it would not only be deep in the red, but also have miserable customer satisfaction scores.
So a second takeaway is that doing the wrong thing -- and by the wrong thing we mean attaching assistance to a web of politically motivated strings to federal loans -- will only lead to a bigger catastrophe down the road.
If Congress acts to aid the ailing Big Three car manufacturers -- and I strongly suggest it should -- then it is equally important that the domestic carmakers be allowed the latitude to conduct their business based on the dictates of the American consumer, not the politicians.
The opinions expressed in this commentary are solely those of Jack Nerad.
Editor's Note: Jack R. Nerad is Executive Editorial Director for Kelley Blue Book and kbb.com, and co-host of "America on the Road," heard on more than 300 radio stations. In the 1980s he served as Editor of Motor Trend magazine. Nerad is the author of "The Complete Idiot's Guide to Buying or Leasing a Car," "Chevrolet Corvette: The Power & the Glory," and his latest book, "The Complete Idiot's Guide to Hybrid and Alternative Fuel Vehicles," published recently by Alpha Books.
Perhaps a better question -- one posed in the thought-provoking piece below -- is whether the Big 3 can survive Washington's "help," given the straight jacket of strings that will come attached. The piece also underscores a point I made last week: that a history of meddling by the Experts on Everything inside the Washington Motor Company contributed significantly to the industry's plight -- just as it contributed to the larger economic car crash that's unfolding.
I don't endorse all the writer's conclusions -- especially his view that the company's are owed a bailout because of the burdens Washington imposed -- but his analysis is otherwise sound.
But enough of my commentary. Here's the piece:
Can the Big Three survive a bailout?
By Jack Nerad
IRVINE, California (CNN) -- The Big Three automakers yesterday presented impressive plans to Congress that justified their need for bridge loans to help them regain their competitiveness in light of a vehicle market that has crashed into a wall.
Such loans won't simply help support a vital portion of American industry, they will help prevent a much greater potential economic disaster. The commercial and strategic importance of the auto sector simply cannot be overestimated.
That being said, we are reminded of the old phrase, "Watch what you wish for; you might get it." Because as we watched the chief executives of the Detroit automakers make their second trek to Washington to seek loans from the federal government that could stave off disaster, we have to ask the unexpected question, can the Big Three survive a federal bailout?
An undiscussed but critical part of whether government intervention will succeed is determining whether the inevitable strings attached to the federal funds will bind the Big Three into untenable positions like Gulliver in Lilliput.
Loan assistance from the federal government that tries to control the companies too tightly, that forces them to bring to market vehicles that the public may not want, might simply assure that they fail somewhat later rather than sooner. And in that scenario the American taxpayer and consumer is the biggest loser.
That question must be asked because the historical dynamic between the federal government and the domestic auto industry is a relationship that has been, at best, rocky and often openly antagonistic.
Jump back to 1975 and the institution of the Corporate Average Fuel Economy requirements designed to limit our reliance on foreign oil in the wake of the Arab oil embargo. Instead of simply limiting foreign imports or adding federal taxes to fuel costs to give consumers an incentive to buy more fuel-efficient vehicles, the government instituted byzantine regulations that required American manufacturers to build (or at least market) fuel-efficient cars just so they could continue selling the cars and trucks they were already known for.
Since the United States had always been a country of "cheap gas," (a tradition that continues, by the way) American car companies were not geared up to build small, fuel-efficient cars, but foreign manufacturers were. The result was that Americans were almost forcibly exposed to import vehicles, and many American consumers liked what they found.
The CAFÉ regulations accompanied by inexpensive gasoline were analogous to plopping consumers into the middle of a giant candy store and then forcing the candy manufacturers to somehow persuade a percentage of consumers to buy broccoli instead.
When all was said and done, the CAFÉ rules ended up giving a strong leg up to the Big Three's import competitors, putting their market share on an upward curve that hasn't ceased climbing.
Of course, having helped push American consumers into import cars, albeit inadvertently, the federal government then tried to reverse the trend through new intervention.
At the urging of the U.S. government, the Japanese manufacturers adopted "voluntary"
restraints on their exports of vehicles to the U.S. beginning in 1981. The goal was to give U.S. companies "breathing room" so they could catch up to the Japanese in producing small, fuel-efficient vehicles. (Sound familiar?)
Again, this might have seemed a worthy plan at the time, but it had several unintended consequences that ended up doing much more harm to the domestic manufacturers than good. In the short term it limited supply of popular Japanese-built vehicles, which resulted in windfall profits for the dealers of the top imports, helping those brands establish very strong dealer networks.
It influenced the import manufacturers to move up-market both by building more expensive vehicles and by establishing luxury brands like Acura, Lexus and Infiniti. And it gave strong impetus for the import manufacturers to build plants here in the United States. Today a large percentage of the "import brand" share of the U.S. market -- more than 50 percent of the total light-vehicles sold here -- are vehicles built by Americans in foreign-managed factories on U.S. soil. Ironically, to counteract this, the Big Three automakers have increasingly moved production from the U.S. to lower-labor-cost countries like Mexico.
So what are the implications of this history lesson? The first takeaway is that a portion of the woes the domestic Big Three are suffering today are the result of current and past federal government policies, so it seems fair that they be accorded government assistance now in time of dire need.
But equally important, while the Big Three automakers might well be accused of not correctly gauging the needs and desires of the American buying public, one group that is demonstrably much worse in that endeavor is Congress. If the U.S. government were a car company, it would not only be deep in the red, but also have miserable customer satisfaction scores.
So a second takeaway is that doing the wrong thing -- and by the wrong thing we mean attaching assistance to a web of politically motivated strings to federal loans -- will only lead to a bigger catastrophe down the road.
If Congress acts to aid the ailing Big Three car manufacturers -- and I strongly suggest it should -- then it is equally important that the domestic carmakers be allowed the latitude to conduct their business based on the dictates of the American consumer, not the politicians.
The opinions expressed in this commentary are solely those of Jack Nerad.
Editor's Note: Jack R. Nerad is Executive Editorial Director for Kelley Blue Book and kbb.com, and co-host of "America on the Road," heard on more than 300 radio stations. In the 1980s he served as Editor of Motor Trend magazine. Nerad is the author of "The Complete Idiot's Guide to Buying or Leasing a Car," "Chevrolet Corvette: The Power & the Glory," and his latest book, "The Complete Idiot's Guide to Hybrid and Alternative Fuel Vehicles," published recently by Alpha Books.
Tuesday, November 25, 2008
Would "Washington Motors" Do Better?
An excellent piece in today's Washington Post poses the question: Can the know-it-alls in Washington do a better job of building an innovative and profitable car company than can the panhandlers in pinstripes from Detroit? Washington seems to think so, judging from all the critiques auto company execs endured when they came grovelling, and all the conditions politicians want attached to any bailout money.
The short answer, of course, is that any car or car company designed according to Washington's specifications would be an Edsel -- just as everything else Washington touches becomes an Edsel. Hasn't anyone in Washington ever heard of the GAZ-M20 Pobeda, which was just one clunky and archaic result of Soviet central planning? And an argument might even be made that the meddling Washington's already done in the industry, in terms of the regulatory burdens and fuel economy and safety mandates it's imposed, contributed mightily to the uncompetitiveness of this American industry (a point made by Holman Jenkins in The Wall Street Journal).
But the long answer, for those who want it, is as follows:
The Car of the Future -- but at What Cost?
Hybrid Vehicles Are Popular, but Making Them Profitable Is a Challenge
By Steven Mufson
Many members of Congress believe they know what the car company of the future should look like.
"A business model based on gas -- a gas-guzzling past -- is unacceptable," Sen. Charles E. Schumer (D-N.Y.) said last week. "We need a business model based on cars of the future, and we already know what that future is: the plug-in hybrid electric car."
But the car company Schumer and other lawmakers envision for the future could turn out to be a money-losing operation, not part of a "sustainable U.S. auto industry" that President-elect Barack Obama and most members of Congress say they want to create.
That's because car manufacturers still haven't figured out how to produce hybrid and plug-in vehicles cheaply enough to make money on them. After a decade of relative success with its hybrid Prius, Toyota has sold about a million of the cars and is still widely believed by analysts to be losing money on each one sold. General Motors has touted plans for a plug-in hybrid vehicle called the Volt, but the costly battery will prevent it from turning a profit on the vehicle for several years, at least.
"In 10 years are they [at GM] going to solve the technological problems with respect to the Volt? Sure," says Maryann Keller, an automotive analyst and author of a book on GM. "But are they going to be able to stake their survival, which is really more of a now to five-year proposition, on it? I'd say they can't. They have to stake their future on Malibus, the Chevy Cruze, and much more conventional technologies."
U.S. automakers faced a barrage of demands last week that they provide evidence and assurance that they would use federal bailout money to transform their companies to produce automobiles of the future, using advanced technologies and featuring hybrid or plug-in vehicles. And in his "60 Minutes" interview on Nov. 16, Obama said that before backing a big loan package he wanted to be sure "that we are creating a bridge loan to somewhere as opposed to a bridge loan to nowhere."
But there's no guarantee that the new business model would be any more viable than the current one. Automobile experts estimate that the battery in a plug-in vehicle could add at least $8,000 to the cost of a car, maybe considerably more. Most Americans will be unwilling to pay the extra price, especially if gasoline prices languish around $2 a gallon.
That's why one of the mysteries about GM's plans to introduce the Volt in 2010 is how much it will cost to buy one. "What's the Volt going to cost? I would be happy to answer that if you can tell me the price of oil in 2010," said Robert A. Kruse, GM's executive director of global vehicle engineering for hybrids, electric vehicles and batteries. "I can tell you to the penny what it will cost GM, but pricing is much more related to market conditions."
The hurdles ahead for the Volt and other cars with new technologies pose dilemmas for automakers trying to gauge a market that is still very young for cars that don't exist while trying to stay in business during a downturn.
"These are hard choices," said Toyota chief technology officer Bill Reinert, part of the Prius design team. "Do you bet on lighter, smaller, more fuel efficient but ultimately less profitable cars or do you hold back a little on technology development and look at new versions of existing cars."
Many experts say that gas guzzlers will not fade away as long as Congress fails to impose higher taxes on gasoline to steer people toward fuel-efficient cars.
"You'd think from reading the media that we have had a burial ceremony at Arlington cemetery for the last pickup truck," said James Womack, a management expert who has written about the automobile industry. "I can easily imagine three years from now when public is focused on a new set of priorities . . . that this whole thing would go poof."
Eager to reduce U.S. dependence on foreign oil, Obama proposed a $7,500-a-vehicle tax credit for plug-in vehicles during his presidential campaign. Roughly half of Americans don't earn enough to take advantage of such a big tax credit. (A head of household would need to earn almost $50,000 to have a federal tax liability that large.) Many others don't have the cash to purchase an expensive vehicle then wait for a federal refund. To spur sales of new vehicles, the price must be reasonable at the point of sale, say many industry experts.
Womack warned that it takes time to design a new vehicle, change assembly lines and then turn a new product into a profitable one. "For anything that's really new it's still about four years," he said. "To get your money back, you need to make that product for eight to 10 years with only cosmetic changes."
Helping automakers over that hump may take more money and patience than Congress or its taxpaying constituents have.
The experience of Tesla Motors, a Silicon Valley sports car maker, illustrates the challenges of making a radically new automobile. Founded by a group of high-tech multimillionaires, Tesla has been trying to become the first new successful American car company since Chrysler, which was founded in 1925.
Tesla's founders set out to make all-electric vehicles. The company's first: an all-electric sports car with a price tag of $109,000 that can go from zero to 60 mph in a bracing 3.9 seconds. As of a week ago, only 63 had been delivered to customers; a couple of dozen were nearly ready and the company has about 1,200 back orders.
"The reason we started with a $100,000 sports car is that when technology is new it tends to be expensive," says Elon Musk, the co-founder of PayPal who is the chief executive of and a big investor in Tesla. "It just takes time to optimize the right design and work up to economies of scale. . . . Why we didn't start with a Honda Civic is that it would be a $70,000 to $80,000 Honda Civic."
With a chassis made by Lotus in England, body parts made by a French carbon fiber firm Sotira and battery parts from Taiwan, Tesla has had supply-chain problems ranging from customs delays to a fire in the tunnel that goes under the English Channel. Initially a two-speed vehicle, the early Teslas were rough on transmissions, which have been eliminated in new single-speed versions. Recently Musk has hired some veterans from the Detroit automakers to smooth out production problems.
"For sure, this game looks a lot easier than it really is," said Jon Lauckner, GM's vice president of global program management. "You've got to get 3,000 parts all together in one place to assemble a vehicle."
Tesla isn't any different from the Detroit Three in one regard: It too is looking for government assistance. Eager to make a luxury sedan as the next in what it hopes eventually will be a full line of electric vehicles, Tesla Motors has applied for $400 million in low-interest federal loans under the $25 billion loan package approved by Congress a year ago.
But GM and other car companies, while preparing plug-in vehicles, are more likely to live or die based on the sales of conventional cars that get better fuel efficiency through improved transmissions, reduced weight or hybrid technology. GM says it will offer nine hybrids for sale by the middle of next year. Reinert says that Toyota will eventually offer hybrid versions of all its car models.
Still, production of the new cars will be limited. GM, for instance, plans to produce only a little more than 10,000 Volts in the model's first year.
"People ask us when will we produce not just 10,000 but 50,000," said Frank Weber, GM's global vehicle line executive and chief engineer for E-flex systems. "I say when the battery and power train costs have come down significantly." Weber added: "We never said this program in the first generation was there to make money. You cannot expect this type of technology to make money from day one."
The economic downturn has also changed the equation.
"Will the U.S. auto industry ever be as profitable as it was from mid-90s to the early part of this decade?" asks automobile expert Keller. Those days were "magic. It was like printing money for everybody. Everybody from Toyota and GM to Ford and Nissan were feasting on our desire to drive around in those giant vehicles."
But the industry has gone from feast to famine. Auto industry experts say that the basic problem is that the U.S. industry geared up to make 18 million cars and light trucks a year and that it will be lucky to sell 11 million this year. How far sales will climb back -- and when -- is anybody's guess.
"There's fluff and there's reality," Keller said. "The fluff is the Chevy Volt . . . That's not going to save GM in the next five years. What will save GM is more small sedans and more crossovers. That's what people are going to be buying."
The short answer, of course, is that any car or car company designed according to Washington's specifications would be an Edsel -- just as everything else Washington touches becomes an Edsel. Hasn't anyone in Washington ever heard of the GAZ-M20 Pobeda, which was just one clunky and archaic result of Soviet central planning? And an argument might even be made that the meddling Washington's already done in the industry, in terms of the regulatory burdens and fuel economy and safety mandates it's imposed, contributed mightily to the uncompetitiveness of this American industry (a point made by Holman Jenkins in The Wall Street Journal).
But the long answer, for those who want it, is as follows:
The Car of the Future -- but at What Cost?
Hybrid Vehicles Are Popular, but Making Them Profitable Is a Challenge
By Steven Mufson
Many members of Congress believe they know what the car company of the future should look like.
"A business model based on gas -- a gas-guzzling past -- is unacceptable," Sen. Charles E. Schumer (D-N.Y.) said last week. "We need a business model based on cars of the future, and we already know what that future is: the plug-in hybrid electric car."
But the car company Schumer and other lawmakers envision for the future could turn out to be a money-losing operation, not part of a "sustainable U.S. auto industry" that President-elect Barack Obama and most members of Congress say they want to create.
That's because car manufacturers still haven't figured out how to produce hybrid and plug-in vehicles cheaply enough to make money on them. After a decade of relative success with its hybrid Prius, Toyota has sold about a million of the cars and is still widely believed by analysts to be losing money on each one sold. General Motors has touted plans for a plug-in hybrid vehicle called the Volt, but the costly battery will prevent it from turning a profit on the vehicle for several years, at least.
"In 10 years are they [at GM] going to solve the technological problems with respect to the Volt? Sure," says Maryann Keller, an automotive analyst and author of a book on GM. "But are they going to be able to stake their survival, which is really more of a now to five-year proposition, on it? I'd say they can't. They have to stake their future on Malibus, the Chevy Cruze, and much more conventional technologies."
U.S. automakers faced a barrage of demands last week that they provide evidence and assurance that they would use federal bailout money to transform their companies to produce automobiles of the future, using advanced technologies and featuring hybrid or plug-in vehicles. And in his "60 Minutes" interview on Nov. 16, Obama said that before backing a big loan package he wanted to be sure "that we are creating a bridge loan to somewhere as opposed to a bridge loan to nowhere."
But there's no guarantee that the new business model would be any more viable than the current one. Automobile experts estimate that the battery in a plug-in vehicle could add at least $8,000 to the cost of a car, maybe considerably more. Most Americans will be unwilling to pay the extra price, especially if gasoline prices languish around $2 a gallon.
That's why one of the mysteries about GM's plans to introduce the Volt in 2010 is how much it will cost to buy one. "What's the Volt going to cost? I would be happy to answer that if you can tell me the price of oil in 2010," said Robert A. Kruse, GM's executive director of global vehicle engineering for hybrids, electric vehicles and batteries. "I can tell you to the penny what it will cost GM, but pricing is much more related to market conditions."
The hurdles ahead for the Volt and other cars with new technologies pose dilemmas for automakers trying to gauge a market that is still very young for cars that don't exist while trying to stay in business during a downturn.
"These are hard choices," said Toyota chief technology officer Bill Reinert, part of the Prius design team. "Do you bet on lighter, smaller, more fuel efficient but ultimately less profitable cars or do you hold back a little on technology development and look at new versions of existing cars."
Many experts say that gas guzzlers will not fade away as long as Congress fails to impose higher taxes on gasoline to steer people toward fuel-efficient cars.
"You'd think from reading the media that we have had a burial ceremony at Arlington cemetery for the last pickup truck," said James Womack, a management expert who has written about the automobile industry. "I can easily imagine three years from now when public is focused on a new set of priorities . . . that this whole thing would go poof."
Eager to reduce U.S. dependence on foreign oil, Obama proposed a $7,500-a-vehicle tax credit for plug-in vehicles during his presidential campaign. Roughly half of Americans don't earn enough to take advantage of such a big tax credit. (A head of household would need to earn almost $50,000 to have a federal tax liability that large.) Many others don't have the cash to purchase an expensive vehicle then wait for a federal refund. To spur sales of new vehicles, the price must be reasonable at the point of sale, say many industry experts.
Womack warned that it takes time to design a new vehicle, change assembly lines and then turn a new product into a profitable one. "For anything that's really new it's still about four years," he said. "To get your money back, you need to make that product for eight to 10 years with only cosmetic changes."
Helping automakers over that hump may take more money and patience than Congress or its taxpaying constituents have.
The experience of Tesla Motors, a Silicon Valley sports car maker, illustrates the challenges of making a radically new automobile. Founded by a group of high-tech multimillionaires, Tesla has been trying to become the first new successful American car company since Chrysler, which was founded in 1925.
Tesla's founders set out to make all-electric vehicles. The company's first: an all-electric sports car with a price tag of $109,000 that can go from zero to 60 mph in a bracing 3.9 seconds. As of a week ago, only 63 had been delivered to customers; a couple of dozen were nearly ready and the company has about 1,200 back orders.
"The reason we started with a $100,000 sports car is that when technology is new it tends to be expensive," says Elon Musk, the co-founder of PayPal who is the chief executive of and a big investor in Tesla. "It just takes time to optimize the right design and work up to economies of scale. . . . Why we didn't start with a Honda Civic is that it would be a $70,000 to $80,000 Honda Civic."
With a chassis made by Lotus in England, body parts made by a French carbon fiber firm Sotira and battery parts from Taiwan, Tesla has had supply-chain problems ranging from customs delays to a fire in the tunnel that goes under the English Channel. Initially a two-speed vehicle, the early Teslas were rough on transmissions, which have been eliminated in new single-speed versions. Recently Musk has hired some veterans from the Detroit automakers to smooth out production problems.
"For sure, this game looks a lot easier than it really is," said Jon Lauckner, GM's vice president of global program management. "You've got to get 3,000 parts all together in one place to assemble a vehicle."
Tesla isn't any different from the Detroit Three in one regard: It too is looking for government assistance. Eager to make a luxury sedan as the next in what it hopes eventually will be a full line of electric vehicles, Tesla Motors has applied for $400 million in low-interest federal loans under the $25 billion loan package approved by Congress a year ago.
But GM and other car companies, while preparing plug-in vehicles, are more likely to live or die based on the sales of conventional cars that get better fuel efficiency through improved transmissions, reduced weight or hybrid technology. GM says it will offer nine hybrids for sale by the middle of next year. Reinert says that Toyota will eventually offer hybrid versions of all its car models.
Still, production of the new cars will be limited. GM, for instance, plans to produce only a little more than 10,000 Volts in the model's first year.
"People ask us when will we produce not just 10,000 but 50,000," said Frank Weber, GM's global vehicle line executive and chief engineer for E-flex systems. "I say when the battery and power train costs have come down significantly." Weber added: "We never said this program in the first generation was there to make money. You cannot expect this type of technology to make money from day one."
The economic downturn has also changed the equation.
"Will the U.S. auto industry ever be as profitable as it was from mid-90s to the early part of this decade?" asks automobile expert Keller. Those days were "magic. It was like printing money for everybody. Everybody from Toyota and GM to Ford and Nissan were feasting on our desire to drive around in those giant vehicles."
But the industry has gone from feast to famine. Auto industry experts say that the basic problem is that the U.S. industry geared up to make 18 million cars and light trucks a year and that it will be lucky to sell 11 million this year. How far sales will climb back -- and when -- is anybody's guess.
"There's fluff and there's reality," Keller said. "The fluff is the Chevy Volt . . . That's not going to save GM in the next five years. What will save GM is more small sedans and more crossovers. That's what people are going to be buying."
Wednesday, November 19, 2008
Prince of Pork Dethroned by Earl of Earmarks
First the good news: 90-year-old West Virginia Sen. Robert Byrd has been ousted from the chairmanship of the all-powerful Senate Appropriations committee, which gave him his own set of keys to the U.S. Treasury. Now the bad news: Byrd will be replaced by another geriatric, 84-year-old Hawaii Sen. Dan Inouye, whose been a worthy understudy in the art of pork-barrel pillaging.
Little changes, in short, except for matters of style. "Rather than give big speeches on the Senate floor or in committee hearings like his predecessor, the senior Hawaiian senator will strike a lot more deals in the backrooms," reports The Hill. And I'm not sure that's an improvement.
At least with Byrd, who fancies himself a historian, the banditry was accompanied by rambling, 10-hour discourses on the rise and fall of the Roman Empire (with the part about bread and circuses adroitly sanitized, lest the audience see any parallels). Inouye, though an old-school senator and a gentlemen, doesn't even bother entertaining you while he's picking your pockets.
Little changes, in short, except for matters of style. "Rather than give big speeches on the Senate floor or in committee hearings like his predecessor, the senior Hawaiian senator will strike a lot more deals in the backrooms," reports The Hill. And I'm not sure that's an improvement.
At least with Byrd, who fancies himself a historian, the banditry was accompanied by rambling, 10-hour discourses on the rise and fall of the Roman Empire (with the part about bread and circuses adroitly sanitized, lest the audience see any parallels). Inouye, though an old-school senator and a gentlemen, doesn't even bother entertaining you while he's picking your pockets.
Wednesday, October 15, 2008
Seattle Times Squeals on the Squealers
The Seattle Times on Sunday rolled out a pretty damning expose of Congress's continuing appetite for pork, suggesting that the earmarking epidemic goes on, despite vows of reform and transparency. Here’s a link to the stories, which the paper packaged together as a feature called "The Favor Factory 2008."
This is all just an appetizer, keep in mind. These earmarks come from just one bill, which funds the Pentagon in Fiscal 2009. That was the only place the paper could go, though, since Congress -- derelict in its duties as usual -- failed to pass most other spending bills this year. The Times also provides readers with a database, itemizing the defense earmarks and campaign contributions for each member. That leaves us to judge whether these earmarks seem legitimate (though the project descriptions can be maddeningly vague), and to draw our own conclusions about whether there appear to be quid pro quos between earmarks and donations.
It's a nifty piece of investigative journalism, that provides a wealth of possible story angles, and research opportunities, for local reporters and curious constituents alike, if they take the time to connect the dots. Kudos to The Seattle Times for putting it all together.
Here are links to earmark/campaign donor lists of particular interest to local readers.
U.S. Rep. Doug Lamborn: earmark list.
Sen. Wayne Allard: earmark list.
Sen. Ken Salazar: earmark list.
U.S. Rep. John Salazar: earmark list.
U.S. Rep. Mark Udall: earmark list.
It's always tempting, when looking at home state pork, to let narrow self-interest cloud our judgment about the propriety of such expenditures. Since state or local institutions may benefit, we have a tendency to be more forgiving of "our" earmarks than we are of those that go elsewhere. This cognitive dissonance is perfectly captured in this editorial from the Port Huron Times Herald, which decries earmarking as "reprehensible" -- except when it benefits Michigan. And this is one reason why members of Congress rarely pay a political price for their plundering.
One way to get a more objective perspective is to ask yourself whether you would consider this a good and legitimate use of federal money -- of your money -- if it were going to some other state or congressional district. If you wouldn't be happy paying for such a project in Peoria, you shouldn't ask people in Peoria to pay for one here.
This is all just an appetizer, keep in mind. These earmarks come from just one bill, which funds the Pentagon in Fiscal 2009. That was the only place the paper could go, though, since Congress -- derelict in its duties as usual -- failed to pass most other spending bills this year. The Times also provides readers with a database, itemizing the defense earmarks and campaign contributions for each member. That leaves us to judge whether these earmarks seem legitimate (though the project descriptions can be maddeningly vague), and to draw our own conclusions about whether there appear to be quid pro quos between earmarks and donations.
It's a nifty piece of investigative journalism, that provides a wealth of possible story angles, and research opportunities, for local reporters and curious constituents alike, if they take the time to connect the dots. Kudos to The Seattle Times for putting it all together.
Here are links to earmark/campaign donor lists of particular interest to local readers.
U.S. Rep. Doug Lamborn: earmark list.
Sen. Wayne Allard: earmark list.
Sen. Ken Salazar: earmark list.
U.S. Rep. John Salazar: earmark list.
U.S. Rep. Mark Udall: earmark list.
It's always tempting, when looking at home state pork, to let narrow self-interest cloud our judgment about the propriety of such expenditures. Since state or local institutions may benefit, we have a tendency to be more forgiving of "our" earmarks than we are of those that go elsewhere. This cognitive dissonance is perfectly captured in this editorial from the Port Huron Times Herald, which decries earmarking as "reprehensible" -- except when it benefits Michigan. And this is one reason why members of Congress rarely pay a political price for their plundering.
One way to get a more objective perspective is to ask yourself whether you would consider this a good and legitimate use of federal money -- of your money -- if it were going to some other state or congressional district. If you wouldn't be happy paying for such a project in Peoria, you shouldn't ask people in Peoria to pay for one here.
Thursday, October 9, 2008
Federal "Help" Becomes Election Hindrance
Talk about a letdown.
One of the top stories in today’s New York Times takes you from 60 to 0 in about 11 seconds, by promising much more than it delivers -- which might create misperceptions for people who glance at a headline, gasp at the implications, but don’t bother to actually read the story.
“States' Actions to Block Voters Appear Illegal” is how the story is headlined. And the lead promises something big: "Tens of thousands of eligible voters in at least six swing states have been removed from the rolls or have been blocked from registering in ways that appear to violate federal law, according to a review of state records and Social Security data by The New York Times."
There’s a qualifier in there, the word “appear,” which might make one wary of jumping to conclusions. But otherwise, this seems like dynamite in print. Yet in the story’s second paragraph, for those who get that far, the dynamite turns into a dud, as the Times explains that this isn’t the result of some dark partisan plot, or a dirty tricks operation run out of RNC headquarters, but due to bureaucratic errors and – ironically -- the convolutions of a 2002 effort by Congress to improve elections integrity!
“The actions do not seem to be coordinated by one party or the other, nor do they appear to be the result of election officials intentionally breaking rules, but are apparently the result of mistakes in the handling of the registrations and voter files as the states tried to comply with a 2002 federal law, intended to overhaul the way elections are run,” concedes the Times – leaving this reader feeling mislead, but also enlightened.
The real story here is that the so-called “Help American Vote Act of 2002" (passed by Congress in an overreaction to the Florida voting debacle), by trying to create a federal fix for a state-administered voting system that wasn’t, by and large, broken, is creating more problems than it solved. Far from “helping” America vote, the act has become a hindrance. And if the outcome of this election ends up in court, Washington's meddling, not hanging chads, will be to blame.
Washington, in trying to “help,” made our lives a little harder.
But that isn’t news, is it?
One of the top stories in today’s New York Times takes you from 60 to 0 in about 11 seconds, by promising much more than it delivers -- which might create misperceptions for people who glance at a headline, gasp at the implications, but don’t bother to actually read the story.
“States' Actions to Block Voters Appear Illegal” is how the story is headlined. And the lead promises something big: "Tens of thousands of eligible voters in at least six swing states have been removed from the rolls or have been blocked from registering in ways that appear to violate federal law, according to a review of state records and Social Security data by The New York Times."
There’s a qualifier in there, the word “appear,” which might make one wary of jumping to conclusions. But otherwise, this seems like dynamite in print. Yet in the story’s second paragraph, for those who get that far, the dynamite turns into a dud, as the Times explains that this isn’t the result of some dark partisan plot, or a dirty tricks operation run out of RNC headquarters, but due to bureaucratic errors and – ironically -- the convolutions of a 2002 effort by Congress to improve elections integrity!
“The actions do not seem to be coordinated by one party or the other, nor do they appear to be the result of election officials intentionally breaking rules, but are apparently the result of mistakes in the handling of the registrations and voter files as the states tried to comply with a 2002 federal law, intended to overhaul the way elections are run,” concedes the Times – leaving this reader feeling mislead, but also enlightened.
The real story here is that the so-called “Help American Vote Act of 2002" (passed by Congress in an overreaction to the Florida voting debacle), by trying to create a federal fix for a state-administered voting system that wasn’t, by and large, broken, is creating more problems than it solved. Far from “helping” America vote, the act has become a hindrance. And if the outcome of this election ends up in court, Washington's meddling, not hanging chads, will be to blame.
Washington, in trying to “help,” made our lives a little harder.
But that isn’t news, is it?
Monday, August 18, 2008
Ban the Bomb -- any Bomb.
I've written on this blog before about the reckless reluctance of some members of Congress to modernize America's aging nuclear arsenal, and their desire to abide by a never-ratified nuclear test ban treaty, for fear of appearing "provocative." But as this and other stories indicate, doves in Congress also seem reluctant to develop non-nuclear alternatives -- including Trident missiles armed with conventional, high-explosive warheads -- that might be used in a crisis.
Here's an excerpt from the story at GovExec.com:
"An independent panel on Friday advised that the U.S. Navy develop and field a conventional version of its nuclear-armed Trident D-5 missile, a Defense Department initiative that has received scant support thus far from a skeptical Congress.
In a 192-page report, commissioned by lawmakers in 2006, the National Academy of Sciences experts take issue with a Capitol Hill decision to eliminate this year's funding for the Conventional Trident Modification.
"The committee disagrees with the congressional decision not to fund testing of [the] CTM [missile] in 2008, and recommends instead that Congress fund" Conventional Trident Modification research and development "at a level sufficient to achieve early deployment if tests confirm system effectiveness," writes the group, composed of 18 national defense and nuclear weapons experts.
The Navy missile was to be the first weapon developed and deployed for a new mission called "prompt global strike," in which terrorist targets or rogue nations could be attacked within just one hour of a launch command. Currently, nuclear weapons are the only tools in the U.S. military arsenal available to hit urgent targets halfway around the world in such short order.
Lawmakers last year decided that the Navy project would be limited to basic research and development and must share a $100 million budget in fiscal 2008 with an array of other "promising conventional prompt global strike technologies." Critics on Capitol Hill cited concerns that, if launched from the same Ohio-class submarines that carry an identical nuclear weapon, a conventional D-5 ballistic missile might be mistaken for a nuclear salvo and elicit a violent response from other atomic powers like Russia or China."
The "critics on Capitol Hill" ought to worry less about the reaction of ruthless leaders in Russia and China -- nations that won't flinch from doing what's in their national security interest -- and more about the risks this country runs if doesn't take the necessary steps -- and take them soon -- to modernize and strengthen its sagging deterrent capability, nuclear and conventional.
The best way to avoid having to resort to the "nuclear option" is to have an array of equally-effective conventional options available. "Prompt Global Strike" is meant to do that. Yet the neo-disarmament crowd in Congress is making a nuclear strike even more likely, during some future crisis, by scuttling a viable conventional arms alternative.
Here's an excerpt from the story at GovExec.com:
"An independent panel on Friday advised that the U.S. Navy develop and field a conventional version of its nuclear-armed Trident D-5 missile, a Defense Department initiative that has received scant support thus far from a skeptical Congress.
In a 192-page report, commissioned by lawmakers in 2006, the National Academy of Sciences experts take issue with a Capitol Hill decision to eliminate this year's funding for the Conventional Trident Modification.
"The committee disagrees with the congressional decision not to fund testing of [the] CTM [missile] in 2008, and recommends instead that Congress fund" Conventional Trident Modification research and development "at a level sufficient to achieve early deployment if tests confirm system effectiveness," writes the group, composed of 18 national defense and nuclear weapons experts.
The Navy missile was to be the first weapon developed and deployed for a new mission called "prompt global strike," in which terrorist targets or rogue nations could be attacked within just one hour of a launch command. Currently, nuclear weapons are the only tools in the U.S. military arsenal available to hit urgent targets halfway around the world in such short order.
Lawmakers last year decided that the Navy project would be limited to basic research and development and must share a $100 million budget in fiscal 2008 with an array of other "promising conventional prompt global strike technologies." Critics on Capitol Hill cited concerns that, if launched from the same Ohio-class submarines that carry an identical nuclear weapon, a conventional D-5 ballistic missile might be mistaken for a nuclear salvo and elicit a violent response from other atomic powers like Russia or China."
The "critics on Capitol Hill" ought to worry less about the reaction of ruthless leaders in Russia and China -- nations that won't flinch from doing what's in their national security interest -- and more about the risks this country runs if doesn't take the necessary steps -- and take them soon -- to modernize and strengthen its sagging deterrent capability, nuclear and conventional.
The best way to avoid having to resort to the "nuclear option" is to have an array of equally-effective conventional options available. "Prompt Global Strike" is meant to do that. Yet the neo-disarmament crowd in Congress is making a nuclear strike even more likely, during some future crisis, by scuttling a viable conventional arms alternative.
Sunday, August 17, 2008
A Tale Half Told
I haven't read this book. And based on this review, and what I know of the author's previous work, and my years living and working in the city about which he writes, I probably won't.
It's not because he blames Republicans -- the "wrecking crew" of the book's title -- for everything that's screwed up and corrupt in the capital city's political culture. As the party largely in charge since 1994, Republicans certainly deserve plenty of blame, not just for falling prey to the city's many temptations but for abandoning what ideals they once had. And they'll face a well-deserved reckoning for that in just a few short months, when the Democrats take control of the White House.
No one's rougher on the party than those of us who at one time labored in the GOP vineyards, only to see the fruits of those labors turn sour. But I also lived in Washington long enough, and followed goings on there closely enough before plunging in myself, to put the issue into the context this book obviously lacks. All the corruptions the author decries or could decry -- fiscal irresponsibility, lobbyists, earmarks, abuses of office, patronage-building -- were pioneered (and in some cases perfected) by Democrats when they ran the show. Has the author so quickly forgotten names like Tony Coelho, Dan Rostenkowski and Jim Wright, to name just a few?
Republicans simply took things to the next level. And if the author imagines these things will vanish when Democrats are again completely in charge, he's imagining things. Has earmarking ended since Democrats regained control of Congress, promising to clean things up? Have lobbyists packed their bags and left town? Is Congress run by a bunch of rabidly partisan politicos, who will bend and break procedural rules, and throw basic fairness out a second story window, to get what they want? The correct answers are no, no and yes.
And none of this will change as long as so much power, money and regulatory clout remains centered in Washington. The corrupting influence of so much centralized power will eventually take root in whichever party is in charge at the moment. It was there before the Republican "revolution." It will continue during the Democratic "devolution" ahead. But will the author, 8 or 10 years hence, be penning "The Wrecking Crew Revisited"? Don't bet on it. His sort of "muckraking" conveniently ignores both sides of the pig sty.
The author takes shots at libertarians in the book, according to this review, but libertarians at least recognize that the only way to end power's corrupting influence in Washington is for states and people to take their power back, by returning to the limited government ideals the founders espoused. Liberals, like the author, fail to grasp that their own support for big government -- their Statolatry, as Von Mises called it -- creates the optimum conditions for abuses of power and corruption to flourish.
It's not because he blames Republicans -- the "wrecking crew" of the book's title -- for everything that's screwed up and corrupt in the capital city's political culture. As the party largely in charge since 1994, Republicans certainly deserve plenty of blame, not just for falling prey to the city's many temptations but for abandoning what ideals they once had. And they'll face a well-deserved reckoning for that in just a few short months, when the Democrats take control of the White House.
No one's rougher on the party than those of us who at one time labored in the GOP vineyards, only to see the fruits of those labors turn sour. But I also lived in Washington long enough, and followed goings on there closely enough before plunging in myself, to put the issue into the context this book obviously lacks. All the corruptions the author decries or could decry -- fiscal irresponsibility, lobbyists, earmarks, abuses of office, patronage-building -- were pioneered (and in some cases perfected) by Democrats when they ran the show. Has the author so quickly forgotten names like Tony Coelho, Dan Rostenkowski and Jim Wright, to name just a few?
Republicans simply took things to the next level. And if the author imagines these things will vanish when Democrats are again completely in charge, he's imagining things. Has earmarking ended since Democrats regained control of Congress, promising to clean things up? Have lobbyists packed their bags and left town? Is Congress run by a bunch of rabidly partisan politicos, who will bend and break procedural rules, and throw basic fairness out a second story window, to get what they want? The correct answers are no, no and yes.
And none of this will change as long as so much power, money and regulatory clout remains centered in Washington. The corrupting influence of so much centralized power will eventually take root in whichever party is in charge at the moment. It was there before the Republican "revolution." It will continue during the Democratic "devolution" ahead. But will the author, 8 or 10 years hence, be penning "The Wrecking Crew Revisited"? Don't bet on it. His sort of "muckraking" conveniently ignores both sides of the pig sty.
The author takes shots at libertarians in the book, according to this review, but libertarians at least recognize that the only way to end power's corrupting influence in Washington is for states and people to take their power back, by returning to the limited government ideals the founders espoused. Liberals, like the author, fail to grasp that their own support for big government -- their Statolatry, as Von Mises called it -- creates the optimum conditions for abuses of power and corruption to flourish.
Monday, June 23, 2008
American Contrarian adapted for The Rocky
A piece of mine appeared in Saturday’s Rocky Mountain News, which was a slightly refined version of something I posted on The American Contrarian a few weeks back (just in case my army of loyal readers missed it). I thank the good folks at the Rocky's editorial page for running it. Neither my original post here, nor the Rocky version, included several key sentences I wanted tacked on to the end, however. They should read as follows:
“No major rules changes or legislative actions are needed to permanently
end the earmarking epidemic. Members of Congress merely need to make a pledge,
individually and collectively, to strictly follow existing budget rules and stop
taking self-serving shortcuts.”
Tuesday, June 17, 2008
Congress takes aim at another scapegoat
High gas pump prices have members of Congress searching for scapegoats again – an imperative, lest Americans begin looking too closely at Congress’ own (very considerable) role in establishing a regulatory climate that creates false scarcity and drives prices higher. Big Oil “profiteers” are always convenient bogeyman, but the witch hunt now seems to be shifting to the role that “speculators” may be playing, as this story in the Los Angeles Times.
I honestly don’t know enough about commodities to speculate about what role, if any, traders are playing in high gas prices (though I would wager money that an unbiased analysis would find Congress far more culpable than commodities traders), but the Reuters wire service has done enough solid journalism to dig out the facts: Reuters News Wire.
It doesn’t seem to me, as a layperson, that this sector of the market is completely unregulated, or that a regulatory overreaction by Washington is warranted, given the high probability that government intervention will cause more problems than it solves.
I honestly don’t know enough about commodities to speculate about what role, if any, traders are playing in high gas prices (though I would wager money that an unbiased analysis would find Congress far more culpable than commodities traders), but the Reuters wire service has done enough solid journalism to dig out the facts: Reuters News Wire.
It doesn’t seem to me, as a layperson, that this sector of the market is completely unregulated, or that a regulatory overreaction by Washington is warranted, given the high probability that government intervention will cause more problems than it solves.
Monday, June 9, 2008
Profiles in porkage
Three news stories, appearing in different parts of the country on the same day, put a human face on the congressional earmarking issue. It’s not a pretty face, to be sure; but a face all the same.
One story profiles a longtime member of Congress who is damn proud of his ability to “bring home the bacon.” He even seems to have kept a tally of his raids on the treasury and brags of personally delivering $7 billion in pork to the district – that’s illion with a capital B, he says. And his constituents evidently loved him for it, given his long tenure. Meet retired Rep. Ken Gray: http://www.courierpostonline.com/apps/pbcs.dll/article?AID=/20080609/NEWS01/806090344/1006. Here’s a key quote. "If building hospitals, nursing homes and highways is pork, then I say pass the plate," Gray said, laughing. "Anybody who tells you that the greatest beneficiary of a pork barrel is the provider of the pork is wrong."
Perhaps I’m not alone in being thankful this guy retired.
The second story profiles what might be called the reluctant porker; a member of Congress who claims to oppose most earmarking on principle, recognizing that it’s a corruption of the budget process, but who indulges nonetheless, because he is a practical person. As long as everyone else is doing it, he figures, why shouldn’t I dunk my biscuit in the gravy bowl too? Meet New Jersey Rep. Frank A. LoBiondo: http://www.courierpostonline.com/apps/pbcs.dll/article?AID=/20080609/NEWS01/806090344/1006. Here’s a key quote: "I don't believe the people that I represent should be unfairly disadvantaged by my self-imposing a moratorium when everybody else will be advocating on behalf of their constituents," says LoBiondo, who hastens to add that every earmark he sponsors is carefully vetted. Vetted by whom? LoBiondo and his staff, of course.
Finally, you have the relatively rare member of Congress who finds the feeding frenzy repugnant and declines to participate, hoping his constituents will reward him for his fiscal restraint. He may manage to stay in office, but most colleagues give him a wide berth in the cloakroom and at cocktail parties; sort of like the one clean cop in a dirty precinct. Meet California Rep. Devi Nunes: http://www.fresnobee.com/263/story/654409.html. Here’s a key quote: "Earmark decisions are made in smoke-filled rooms by out-of-touch people who have a record of making poor decisions," Nunes said. "The process has enabled corrupt politicians to exploit their offices and is largely based on political patronage." Naturally, this sort of talk, though it has the ring of truth to it, doesn’t make Nunes popular with colleagues. Some suggest he’s even been targeted for retaliation, after crossing swords on a fiscal issue with Rep Jerry Lewis, a prodigious porker who chaired the House Appropriations Committee.
There you have it. Three different members of Congress, three different attitudes toward earmarking. And each tailors his position to fit a constituency.
Some Americans expect their congressperson to plunder at will. They seem driven by a sense of entitlement to get “their fair share” -- though it’s frequently much more than their fair share. Other Americans, though they understand earmarking is wasteful, corrupting and contributes to budget deficits, are pragmatists, who feel (with some justification) they’ll be taken advantage of by the plunderers if their man or woman in Congress doesn’t play the game.
Still others – a decided minority, in seems -- make the connection between high taxes, runaway spending and the total lack of fiscal discipline earmarking bespeaks. This latter group hopes, perhaps forlornly, that a modicum of fiscal discipline might be restored if their representative in Washington, while looking out for their legitimate interests, refrains from trying to bribe them with their own money -- which is what the earmarking racket amounts to.
Which mindset prevails will largely determine whether Congress ever kicks the earmarking habit.
One story profiles a longtime member of Congress who is damn proud of his ability to “bring home the bacon.” He even seems to have kept a tally of his raids on the treasury and brags of personally delivering $7 billion in pork to the district – that’s illion with a capital B, he says. And his constituents evidently loved him for it, given his long tenure. Meet retired Rep. Ken Gray: http://www.courierpostonline.com/apps/pbcs.dll/article?AID=/20080609/NEWS01/806090344/1006. Here’s a key quote. "If building hospitals, nursing homes and highways is pork, then I say pass the plate," Gray said, laughing. "Anybody who tells you that the greatest beneficiary of a pork barrel is the provider of the pork is wrong."
Perhaps I’m not alone in being thankful this guy retired.
The second story profiles what might be called the reluctant porker; a member of Congress who claims to oppose most earmarking on principle, recognizing that it’s a corruption of the budget process, but who indulges nonetheless, because he is a practical person. As long as everyone else is doing it, he figures, why shouldn’t I dunk my biscuit in the gravy bowl too? Meet New Jersey Rep. Frank A. LoBiondo: http://www.courierpostonline.com/apps/pbcs.dll/article?AID=/20080609/NEWS01/806090344/1006. Here’s a key quote: "I don't believe the people that I represent should be unfairly disadvantaged by my self-imposing a moratorium when everybody else will be advocating on behalf of their constituents," says LoBiondo, who hastens to add that every earmark he sponsors is carefully vetted. Vetted by whom? LoBiondo and his staff, of course.
Finally, you have the relatively rare member of Congress who finds the feeding frenzy repugnant and declines to participate, hoping his constituents will reward him for his fiscal restraint. He may manage to stay in office, but most colleagues give him a wide berth in the cloakroom and at cocktail parties; sort of like the one clean cop in a dirty precinct. Meet California Rep. Devi Nunes: http://www.fresnobee.com/263/story/654409.html. Here’s a key quote: "Earmark decisions are made in smoke-filled rooms by out-of-touch people who have a record of making poor decisions," Nunes said. "The process has enabled corrupt politicians to exploit their offices and is largely based on political patronage." Naturally, this sort of talk, though it has the ring of truth to it, doesn’t make Nunes popular with colleagues. Some suggest he’s even been targeted for retaliation, after crossing swords on a fiscal issue with Rep Jerry Lewis, a prodigious porker who chaired the House Appropriations Committee.
There you have it. Three different members of Congress, three different attitudes toward earmarking. And each tailors his position to fit a constituency.
Some Americans expect their congressperson to plunder at will. They seem driven by a sense of entitlement to get “their fair share” -- though it’s frequently much more than their fair share. Other Americans, though they understand earmarking is wasteful, corrupting and contributes to budget deficits, are pragmatists, who feel (with some justification) they’ll be taken advantage of by the plunderers if their man or woman in Congress doesn’t play the game.
Still others – a decided minority, in seems -- make the connection between high taxes, runaway spending and the total lack of fiscal discipline earmarking bespeaks. This latter group hopes, perhaps forlornly, that a modicum of fiscal discipline might be restored if their representative in Washington, while looking out for their legitimate interests, refrains from trying to bribe them with their own money -- which is what the earmarking racket amounts to.
Which mindset prevails will largely determine whether Congress ever kicks the earmarking habit.
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