Date: 12/14/2008 9:08 PM
BC-Meltdown-Autos,5th Ld-Writethru/814
Eds: UPDATEs with Bush quotes. AP Video. Moving on general news and financial services.
WASHINGTON (AP) — The White House tossed out no lifeline for the teetering auto industry Sunday, although President George W. Bush reiterated that he was considering using money from the $700 billion financial bailout fund to provide loans to the carmakers.
“An abrupt bankruptcy for autos could be devastating for the economy,” Bush told reporters Monday aboard Air Force One during an unannounced trip to Iraq and Afghanistan. “We’re now in the process of working with the stakeholders on a way forward. We’re not quite ready to announce that yet.”
Bush wouldn’t give a precise timetable but said, “This will not be a long process because of the economic fragility of the autos.”
White House officials said they did not expect to make an announcement Monday. The administration is considering ways to provide emergency aid to General Motors Corp. and Chrysler LLC, which have said they could run out of cash within weeks without federal aid.
Sen. Bob Corker, R-Tenn., who blocked legislation that would have provided $14 billion in loans to the automakers, said he had spoken with the White House early Sunday. “I don’t think they yet know what they’re going to do,” he said. Ron Gettelfinger, the president of the United Auto Workers, said the union had not held discussions with the White House.
The aid is expected to benefit General Motors and Chrysler and discussions involve the amount of funding and any potential conditions. Ford Motor Co. has said it has enough cash to survive 2009 but asked Congress for a line of credit in case the financial markets deteriorate further.
“I’m optimistic they’re going to do something significant. I don’t think the White House wants bankruptcy at one of the Big Three automakers as part their legacy,” said Sen. Sherrod Brown, D-Ohio.
Last week, Congress failed to approve a plan that would have provided short-term financing to the industry and create a “car czar” who would ensure that the money would transform the Detroit automakers into competitive companies.
The administration, following the legislative defeat, said it was considering several options, including using money from the $700 billion financial bailout fund to provide loans to the carmakers.
Corker and other Republicans sought a compromise that would have insisted the carmakers restructure their debt and bring wages and benefits in line with those paid by Toyota, Honda and Nissan in the United States. The legislation died when Republicans demanded upfront pay and benefit concessions from the United Auto Workers that union leaders rejected.
Corker urged the White House to seek similar concessions from the auto companies and their unions in return for the money. “Of course, the benefit they have — they don’t have to negotiate. They can say this money is available but it’s only available under these conditions,” he said in a broadcast interview.
Sen. Debbie Stabenow, D-Mich., c
ountered that Republican leaders in the Senate did not want an agreement and said the loans were needed to buy time for the companies to restructure.
“Manufacturing is on the edge in this country. This is not the time for a political agenda,” Stabenow said.
The UAW’s Gettelfinger said the failure of the legislation showed that Congress should stay “away from the bargaining table.”
The administration has several options. It could tap the $700 billion financial rescue bailout fund to provide loans to the carmakers or use part of that fund as a kind of collateral for emergency loans the automakers could get from the Federal Reserve.
The administration also could do nothing, leaving open the possibility that one or more of the automakers could go bankrupt.
The White House is keeping President-elect Barack Obama and his advisers informed of the discussions. If administration officials choose not to provide the money now, the Obama team could wait for the new Congress, which will have stronger Democratic majorities.
Providing aid to the companies could represent a change for the White House, which has previously insisted that the Wall Street rescue plan should be used solely to help financial institutions.
Gov. Jennifer Granholm, D-Mich., said other countries were providing aid to their automakers and the loans were essential to help make the U.S. less dependent on foreign oil.
If the companies don’t get help, “we’ll be replacing our reliance on foreign oil with a reliance on foreign batteries because it’s going to be the battery that’s driving the electric vehicle in the future,” Granholm said.
Corker was on CBS’ “Face the Nation,” as was Brown, and “Fox News Sunday,” where he appeared with Stabenow. Gettelfinger was on “Late Edition” on CNN. Granholm was on “Meet the Press” on NBC.
Copyright 2008 The Associated Press.
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On Friday, to paraphrase Michelle Obama, for the first time in my adult life, I thought George Bush was a patriotic. Why? The White House’s suggestion to save the American automobile industry. It appears my bipartisanship was premature. See the below AP story. Let us cross our fingers that the likes of Sen. Bob Corker, R-Tenn (quoted below) haven’t convinced George Bush he should side with the Japanese auto industry instead of Detroit. I know as a Texas patriot, Bush would certainly remember the Alamo. But what about remembering Pearl Harbor, Auschwitz and the Great Depression?
My son and I just saw the movie The Day the Earth Stood Still. The thought I shared with my son after watching this movie with the plot that humans must be exterminated to save the planet, was that perhaps AIG and its credit default swaps would ultimately save the Earth from mankind.
If General Motors fails, it could more effectively than any other theory postured by Al Gore, put an end to global warming. The short term reason is that our American cars would over a fairly short period of time, stop running. See Thursday’s blog. That could have a midterm significant impact on energy conservation in that those American cars are less efficient than foreign cars. But the long term impact is far greater than that. A GM bankruptcy is followed shortly by spiraling unemployment and tightening credit. When you abandon your American car because no one knows how to fix it, you won’t be able to replace it since your job will be at risk and no bank will lend you the money. Thus, a huge drop in the number of cars and oil consumption.
That could be construed as a good thing if you didn’t figure in that the World Economy is fueled by American consumption. Money is just a fictional barter medium (it is only paper after all) that has no intrinsic value. Yet, the world has abandoned its agrarian roots for urban based manufacturing and consumption, all in pursuit of this fictional barter token. Demand for Western Products has created an immense migration to Asian and other third world cities, where no one will have jobs should rampant unemployment follow a drop of American demand for such products. There are fourteen cities in China alone with populations over 3.6 million people. (Can you even spell more than two Chinese cities?)
Human’s need shelter, we need heat and we need fuel. The rest is all a delusion. If you remove the fuel from the world economy that is American’s belief that they need cars, computers, videos games and TV’s – the economies of Asia will collapse. Should American’s stop buying, hundreds of millions of people will be in desperate straights in Asia.
While things will take a while to get as bad here, how much food are you capable of growing on your little plot of soil on your condo balcony? Could you keep yourself warm by foraging for wood? The people of Stalingrad did not do so well in such a venture.
I’ve had a vision that we could create Green jobs to replace our excess demand for cars. In my vision we could replace some of our production capacity for cars with the production of windmills, solar panels and an improved energy grid. Yet, if the American economy (and tax structure with it) collapses in the next few months, there will be no way to fund a transition to Green. Taxes require jobs and profits. George Bush was right to save the banking industry, but not because it has any inherent value, but because it allows people to buy the houses and the cars, the things that the UAW and other American workers make. As the financial system implodes and the jobs dependent entirely on the illusion of wealth disappear, we must have jobs where tangible things are made, in the United States.
Lose the American automobile industry and you have put our species on the precipice. If the survival of billions of human beings on this planet is a priority, then be a patriot, George Bush and make me proud of you this once.
For Depression survivors, meltdown means reminder
Date: 10/29/2008
By MEGAN K. SCOTT
Associated Press Writer
Copyright 2008 The Associated Press.
By MEGAN K. SCOTT
Associated Press Writer
NEW YORK (AP) _ The words have been repeated over and over: This is the worst financial crisis since the Great Depression.
For those who lived through that turbulent time, the statement sparks more than a history lesson. They experienced the bank closures, the bread lines and the sudden disappearance of available work.
What was life like for them? And what are their fears about what is to come? The Associated Press interviewed several people who lived through the Depression to find out how bad things can get — and appreciate our relative affluence today.
Here are their stories, edited from their own words:
EATING IN SOUP KITCHENS
NAME: Esther Pulliam-Torres, 79, New York
HER STORY: I was born in Des Moines, Iowa. When I first came to New York people were so surprised that black people lived in Iowa. My mother was a domestic. I never knew my father.
When I was younger, I remember going to the soup kitchen and I had a red bucket and I would go and they would fill my bucket with soup and I would take it home. I remember we ate a lot of cornmeal, cornmeal pancakes, cornmeal bread. I remember bread was cheap.
I have often thought back to the time when I was in the line with that red bucket because I really loved that red bucket.
As a senior, I’m on the opposite end now. On the one end, I was a child. On the other end, I’m an adult. At that time, I didn’t know anything. Now I do.
I’m worried because in terms of my Social Security, what’s going to happen if they decide to change the way we get it? That’s something I really depend on. I earned it. I worked hard for it.
BEGGING AND BANK FAILURES
NAME: Fran Marshall, 90, Upper Arlington, Ohio
HER STORY: The Depression was really, really bad in 1933. Of course it started in 1929. Then it got worse and worse. My father was a lawyer for two banks in New York. During the Depression, the two banks started to fail. He was so upset over it, he went into a mental depression and he never got out of it. It was a sad thing. He died in a mental institution.
People were trying to get their money out. The banks finally closed and that was the end of it. There was no more money. The government didn’t bail out people back then.
I remember the long lines of people standing in line for bread or soup. They were hungry. There were a lot more people begging back then. We haven’t gotten to that yet. God help us if we do.
We would feed people who came to the door asking for food. My mother would sit them down on the back porch and always fed them. She would give them eggs and toast. She never turned anyone away. My mother was good with money and because my father was a lawyer at one time, his law partner gave her $10 a week, when my father was ill.
In 1937 or 38, we had to move out of our brick house and across the street. We lived in an apartment upstairs and had to look down to the home we had once owned. That was tough.
I don’t worry about bread lines and bank closures coming back. I really don’t think it can get that bad. Look at the way the government has stepped in and the government didn’t step in like that way back during the Depression.
I think it’s safer today. But it’s scary. The whole thing.
TENT CITIES AND BREAD LINES
NAME: Philip Flash, 90, of Mercer Island, Wash.
HIS STORY: I grew up in Seattle. My dad was a tailor — he had a little shop. My mother helped dad in the store.
It was very, very hard, although I must admit that my sister and I never missed a meal. We lived in an apartment. I slept in the dining room. My sister in the living room and my parents in the bedroom.
One of the significant things that I can recall during the Depression was tent city down on the waterfront. People lived in shacks. There were hundreds of them out there.
Things were relatively inexpensive, but people just didn’t have any money. Many jobs just kind of disintegrated. If people had a source of income, they were very, very fortunate. They had bread lines, where you could, if you were down and out, get a meal.
One day my father said that there were some jobs in the sawmills. He left the store and never went back. My mother operated it for a couple of years. Things got worse and she had to give it up. I guess it just wasn’t paying for itself.
I’m real concerned about what’s going on today. We’ll come out of this, but it might take some time. I might not even see the day when it gets back to normal because I don’t know long it will take.
FARMING AND HARDSHIP
NAME: Louise McGee, 90, of Tiffin, Ohio
HER STORY: We lived on a farm and of course we didn’t have it too awful because dad raised a lot of our food. You only had one potato and a few vegetables. There were five of us girls. We worked out in the field the same as the boys. He farmed 80 acres.
One year we had to kill all the little pigs and burn the corn because there was a disease.
My parents didn’t have any money. Period. Not back in that time. The grain they could sell, you didn’t hardly get anything for it. Dad took our weeds and made flour. He took corn and had it ground and we had cornmeal.
I worked for other people who needed my help when I got older. The women had babies. I would go and work for them. You were lucky if you got three or four dollars a week. I gave that to my family.
In 1938, I got married to a farmer. It was kind of rough the first couple of years. In 1940, he joined the Army.
If something doesn’t straighten out, we’ll have another hard Depression like we had back then.
There are going to be a lot of people out of work and government is going to have to furnish food for them. There’ll be a lot more stealing and stuff then there was back then.
I’m on Social Security and I moved in with my son and his wife. I have got it pretty good right now. But when you go through it once, you do kind of wonder.
OUT OF WORK
NAME: Marty Evans, 80, Boca Raton, Fla.
HIS STORY: I was born in Philadelphia. My father owned a grocery store. That didn’t last once things got really tough. He allowed people to buy on credit. They couldn’t pay. He lost that business.
We moved to New York and he worked in the food business. Then we moved back to Philadelphia. My father borrowed some money, bought a truck and went around collecting batteries and tires and selling the m.
I remember things being really tight. I remember not being able to get that ice cream cone I wanted so badly from time to time. I remember being taught to be very careful with my clothes. I remember my mother having to go to work. She was a salesperson in department stores, which left me in charge of my younger brother.
I don’t think it’s going to get to the point where it was back then. You know anything is possible, but as clumsy as the powers that be are, at least they are doing something today that they didn’t do in ’29.
I’m not as free as I was two years ago. I clip coupons now out of the newspaper. My wife is recovering from a stroke; even with the insurance, medical bills are murder. Medication is another story.
If I had to, absolutely I would go back to work. But then who the heck is going to hire me?
CHILI MAC FOR 20 CENTS
NAME: George Eckhoff, 95, Seattle
HIS STORY: It was bad. We had to dig up rent money and go around to the meat market and get a soup bone for a dime maybe to make up some soup and scrounge up some vegetables. I remember seeing lines of people trying to get their money out of the bank. And of course the bread lines.
My dad was out of work. I delivered telegrams. That helped quite a bit.
We had clothing and shoes — food was the hard part. I used to get a tip now and then. I could get my own meals when I was working. I could get a chili mac and a nice piece of French bread for 20 cents.
I had an idea this was coming on. I read the news. They are overbuilding — they did that before the Depression. A lot of buildings didn’t get finished.
I don’t know how people will make it this time. Everything is up so high. We could get food pretty cheap. You can’t do that now.
WILL THERE BE ANYTHING LEFT?
NAME: Ruth Swan, 92, Washington, D.C.
HER STORY: The day that the crash came, I lived in a coal mining town in Pennsylvania. My dad was in the real estate business, but he also had a lot of stocks on margin (borrowing money from a broker to buy stock). I remember he was home all day long on the telephone. I can still see him sitting at the telephone.
My dad tried to find other real estate activity in the area but was not successful. Nobody was buying and nobody was selling. My dad was lucky. He came from a big family. He was one of 12 children and he borrowed money to keep us going.
So we did not starve, we were not deprived, but it was a difficult time I’m sure for my mother and father.
He had a driver take him to New York up and down all the real estate places and he finally got a job. So the year that I graduated college in 1937, he moved the whole family plus the maid to New York City.
It’s not cheap living here (in a senior community). But what can I do? I just want to be able to continue to pay for what I have to pay for while I’m alive, and of course, I save money for the kids, but who knows if there is going to be anything left?
Copyright 2008 The Associated Press.
