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Let Detroit go

I can't think of a more appropriate symbol of the misplaced priorities of the political machine than this image of GM CEO Rick Wagoner traveling to the Congressional hearings in his Chevrolet Malibu hybrid car.  This follows the auto industry CEOs' heavily criticised trip to the first set of hearings in their respective corporate jets.  How dare they! chimed the media and the politicians.  In this time of eco-awareness and required executive humility!

Since they aren't selling a lot of cars at the moment, I suppose the CEOs can afford to take a day's drive across the country to show the media how much they care about the environment and to what levels of degradation they are prepared to submit themselves in front of a fired-up Congress.

Enter His honourable Barney Rubble Frank and his outraged cohorts, who have perfect the fine the art of asking interviewees to agree to their own demise in front of a CSPAN audience.  Like Guantanamo's frequent flyer programme, this process takes a few days to deliver results.  More time well-spent by the auto executives...

The auto industry bailout is becoming the poster-child for why -- even in a democratic, firmly capitalist country like the US -- governments just can't resist creating a planned economy when they get their hands on its levers.  And -- if approved -- it will go down in history as one of the most disastrous economic interventions in memory.  Here are just two reasons why (there are many more):

First, to get the bailout the car makers will be forced to commit to a huge retooling and innovation project to build greener cars.  Apparently, according to the politicians, it was management's failure to respond to huge demand for such vehicles that got them into financial trouble in the first place.  I guess it's a good thing someone noticed and is prepared to save the companies from their myopia!

The green development plan will cost a fortune.  Not $15bn, not $20bn, but probably more like $100bn+.  When this becomes apparent (in 9 months, 12 months?), will any of the politicians have the guts to pull the plug?  No, they will be forced to continue plowing money into the largest ever government-funded production line since re-armament for WWII.  And at the end of it, will these politico-industrial behemoths be the profitable, solvent companies they couldn't be when they were making cars people actually wanted?    

Second, government intervention will ensure that the only significant impediments to the companies' viability -- the inflexible labor contract with the UAW, and their garganguan pension fund obligations -- will remain intact, thus enshrining $75/hour labor (indexed to inflation) and $7bn/year pension funding costs (for GM alone) for eternity. 

At that level, the less unionised foreign-owned car plants in the South will eat Detroit's (and Washington's!) green lunch.  No one on Capitol Hill (or in the White House) will be willing or able to take on the unions nor restructure the legacy retirement packages, further entrenching a sclerotic state economy in Motown.

The good thing is that the net effect of all this attention and funding will be to drive increased interest in green cars.... just not Detroit's green cars.

The bad thing is that taxpayers will fund this adventure for generations to come, and the day of reckoning for Detroit's beleaguered workers will simply be delayed.

The fact is this bailout is entirely unnecessary.  America has the world's most effective bankruptcy framework for enabling companies to buy the 'freedom to breathe'.  In Chapter 11 proceedings the companies can negotiate with creditors, restructure onerous contracts (including labor and pension obligations), and make the organisational changes necessary to become viable again. 

Just in case you think I'm a cold-hearted bastard, ignoring the hundreds of thousands of workers that might lose their jobs in a restructuring, I have a mitigating idea for them too.  Let's put the $15bn or $20bn earmarked for the bailout into a fund that targets affected workers directly: re-skilling, job placement, early retirement, unemployment benefits.  That would be much better use of the money, and would contribute to the economic 'stimulus' effect everyone is looking for.

The American casualty of Abu Ghraib?

Spare a few moments to ponder the fate of an all-but forgotten Charles Graner, notorious torturer at Abu Ghraib.  Injustice has many faces, and this one is hard to get to grips with but noteworthy indeed...

The full story is here, courtesy of Salon.com.  An excerpt: 

The detainee held on charges related to the so-called war on terror is clad in an orange jumpsuit. His wrists are shackled to a leather belt cinched tight around his waist. A short chain connects his ankles, so he can only shuffle down the barren hallways of the prison, escorted by a guard at each arm.

[…] You remember [Charles] Graner, the alleged ringleader of abuse at Abu Ghraib who showed up in those harrowing photos back in 2004.

He has spent more than 29 months in solitary confinement over the past four years, allowed out of his narrow cell during some of that period only to stretch his legs, alone, for one hour a day. In solitary, he has almost no contact with other human beings. He is allowed no radio, no TV and, in a disorienting twist, no watch or calendar to mark the brutal grind of passing time.

[…] it is easy to argue that Graner deserves whatever he gets.  Graner is now the only person involved in the Abu Ghraib scandal who is still behind bars.

[…] 
Years of revelations, however, show that the prisoner abuse started at the top, yet nobody who ordered the abuse has ever been tried or convicted of anything. The Army convicted a handful of soldiers from Abu Ghraib in courts-martial focused almost exclusively on acts captured by the soldiers' own digital cameras, not on policy decisions from above. As the nation prepares to change presidents, the administration that sanctioned, encouraged or ordered the abuse of prisoners taken in the war on terror is about to leave office, having long ago decided that no one in a position of authority will be held accountable.

The Web Presidency

This guy sure moves fast.  A few days ago I wrote on my other blog about how Obama's use of Web technologies and social trends (email, text, viral videos, social networking) has revolutionised the election process. 

I wondered how he might carry the direct relationship he forged with the people into the White House.  It could alter the balance of power in Washington, disintermediating Congress and the media. 

Well, here we see a first tantalising hint of what is to come: Obama's new website Change.gov is up and running.  Already it is providing more transparency into the transition team, plan and process than we have ever had before.  This really is going to be different....

Cringe with Televisa

It's embarrassing to think that I used to be a production coordinator for adverts like these at Televisa.  After the jump, Televisa's video response to the financial crisis (in Spanish):

More commentary here on Vivir Mexico.

A first-hand look at Palin's work experience

In case you missed Monday's edition of the Daily Show, this expose of Wasilla and -- in particular -- the demanding job of Palin's successor as mayor is disturbing indeed (and of course very funny):

Obama and McCain give -- and take -- a good roasting

If like me you thought that McCain looked on the verge of imploding under the pressure of the last presidential debate, you'll be relieved to see a glimpse of the old relaxed, funny McCain a day later at the Al Smith dinner.  It makes for nice comic relief in this nasty election to watch both McCain's and Obama's speeches.  Enjoy.  

Thanks, Marcos, for the heads-up.

Chris Buckley and the battle for the Republican soul

I don't wish to jinx the election, but if Obama wins, we are going to see an ugly battle for the soul of American conservatism.  I am delighted to see the opening shot fired by a friend, Christopher Buckley, whose very public break with the Republicans' bible, The National Review, makes for a great election-time story.

The short of it is this: a few days ago, Chris Buckley -- son of William F. Buckley Jr, the godfather of American conservatism and founder of The National Review -- wrote a blog post breaking with McCain and endorsing Obama.  In the almighty shit-storm that ensued Buckley resigned from the National Review (where he had a back-page column) and laid bare in another post the divisive and reactionary emotions that sadly characterise our modern politics.

He concludes:

While I regret this development, I am not in mourning, for I no longer have any clear idea what, exactly, the modern conservative movement stands for. Eight years of “conservative” government has brought us a doubled national debt, ruinous expansion of entitlement programs, bridges to nowhere, poster boy Jack Abramoff and an ill-premised, ill-waged war conducted by politicians of breathtaking arrogance. As a sideshow, it brought us a truly obscene attempt at federal intervention in the Terry Schiavo case.

So, to paraphrase a real conservative, Ronald Reagan: I haven’t left the Republican Party. It left me.

A warm welcome to Chris and other high-profile defectors, like Dennis Hopper.  Perhaps when this election is over, Americans can start thinking about a new conservative movement that is inclusive and based on the simple precepts of small government, free trade, and social libertarianism.  It won't be called the GOP unless you rip out its soul first.

The indispensable Palin Debate Flow Chart

Thank you Aden Nak.

Gurkhas win right to settle in UK

It's nice to report a small piece of good news for a change... more detail on Al-Jazeera here and The Times here.