News: Labor Pained - Labor Secretary Not on Econ Team.
Tuesday 25 November 2008

Ben Smith, The Politico

After actively campaigning for Obama, union members await a decision on who will be the next Labor secretary.

{WE BELIEVE THAT THE NATIONAL ECONOMY SHOULD NOT BE RUN BY THE UNIONS, AS WE BELIEVE IT SHOULD NOT BE RUN BY THE INDUSTRIALISTS OR BY BUSINESS - AND THE TRAVAILS OF DETROIT SHOW PLAINLY HOW UNIONS BECAME PART OF THE DISASTROUS FALL IN THE US ECONOMY BECAUSE OF THE JOINT MANAGEMENT AND LABOR OPPOSITION TO MODERNIZE THE INDUSTRY.

YES, WASHINGTON MUST GET THE GUTS TO TELL LABOR THAT THE NATIONAL INTEREST REQIRES CHANGE  - AS IT HAS TO TELL MANAGEMENT THAT WITHOUT CLEAR PLANS FOR CHANGE THERE IS NO BAILOUT! }

The markets rose on the news of Barack Obama’s economic policy team Monday, but some labor spirits fell.

Obama’s team of treasury secretary and four top economic advisers, introduced as the hands that will steer America’s economy, had no particular ties to the labor movement. And Obama’s secretary of labor was not introduced as part of that team - a suggestion that that post will retain its second-tier status and quiet voice in matters central to economic policy.

“I wish that [the secretary of labor] would have been among them,” former Michigan congressman David Bonior, a labor stalwart and member of Obama’s transition team, said of the group at the Chicago press conference. “I hope they take that job seriously.”

Labor’s low profile in Obama’s transition is striking because of unions’ vital role in the general election campaign. While Wall Street split its contributions between Obama and John McCain, labor, after dividing its efforts in the Democratic primary, united behind the Democrat and emerged as by far the strongest outside force in the general election. Unions reportedly spent well over $100 million communicating with their members and other voters. The Service Employees International Union alone spent more than $30 million on an independent campaign for Obama, while many of the AFL-CIO unions played key roles in overcoming potential prejudice among their older, white members.

“You can make the case that Obama wouldn’t have won without the labor movement - troops, money, key states,” said the executive director of the pro-union Labor Research Association, Jonathan Tasini, reflecting a widespread view in the labor ranks. “But when it comes down to it, they don’t have the kind of juice to say, ‘This is how we want the economic team to look.’”

That doesn’t mean labor has no agenda in the transition. They’re expecting a pro-union labor secretary - a shift from Bush’s low-profile Labor Secretary Elaine Chao, who was often at odds with organized labor. (Chao is best known as the answer to a trivia question: Who is the only Bush cabinet secretary who will have served all eight years?) Labor is also focused on the job of United States Trade Representative. And they’re debating how hard to push Obama on the Employee Free Choice Act, a bill that would make organizing easier.

Some unions are pushing former House Majority Leader Richard Gephardt for labor secretary, though his lobbying and his staunch skepticism of trade may disqualify him; Bonior is backing a lesser-known union operative, Mary Beth Maxwell. Some unions are pushing Leo Hindery, a left-leaning business executive and donor, as trade representative, though many in labor expect Obama to choose a former Clinton Administration technocrat, Lael Brainard, who has pushed for more enforcement of trade agreements.

In maneuvering for the top job, the labor movement is crippled by its internal split. Though leaders would like a pro-labor figure with national stature in the job - “someone with the stature to get into Larry Summers’ face,” Tasini said - the leading candidates seem to have been disqualified. Bonior and SEIU President Andy Stern have taken themselves out of the running. Other large figures are deeply rooted in the feuding sides - the AFL-CIO and Change to Win. Richard Trumka, who played a key role in selling Obama to AFL unions, is the federation’s secretary-treasurer; SEIU Secretary-Treasurer Anna Burger, who was the face of the service unions’ pro-Obama efforts in the general election, is the chair of Change to Win.

“If we believe this election was about rebuilding the middle class and reclaiming the American Dream, the next secretary of labor should be somebody who is passionate about workers and the issues confronting a 21st century workforce,” Burger said in an email.

Labor leaders on both sides of the divide said they expect Obama to choose a neutral, like Kansas Governor Kathleen Sebelius, who would be a high-profile friend of labor, if an outsider. They’re also hopeful that Obama will pick a trade representative who has committed to introducing enforceable labor standards into trade deals.

“If it’s Sebelius, [union leaders] will pretend to be pleased, but they will simultaneously be disappointed,” said Clete Daniel, a labor historian at Cornell University, who pointed out that she’s a relative outsider from a state whose “right-to-work” laws make union organizing harder. (She has, however, generally backed a labor agenda in Kansas.)

Daniel noted that the power of the position had risen and ebbed since the days of Franklin D. Roosevelt’s high-profile labor secretary, Frances Perkins, reaching lows of obscurity in Republican administrations, and perhaps its highest modern point under Jimmy Carter, whose labor secretary, Ray Marshall, was a well-connected union figure and an important inside player.

President Clinton’s first secretary of labor, Robert Reich, battled Treasury Secretary Robert Rubin for restrictions on trade and additional government spending, but lost.

“Whoever is selected will have a stature not unlike that of Reich, which is a position of secondary influence,” said Daniel.

Unions are also debating what they will ask of the labor secretary. Some have suggested pushing Obama to institute a long list of rule changes and to push hard for the Employee Free Choice Act, which would change the rules in organizing campaigns to favor unions. In a September memo leaked to Politico, John Wilhelm, a close Obama ally who is co-president of Unite HERE, argued that they should eschew specific demands and instead push Obama for key appointments and his bully pulpit.

“We should have only one demand of an Obama administration: that the President of the United States publicly, repeatedly, and strenuously advocate that workers have unions, because unions are necessary to build a good America; that he apply that advocacy to specific worker fights and not just general statements; and that he put people on the [National Labor Relations Board] and in his cabinet who share that view and are committed to implementing it,” Wilhelm wrote.

And labor leaders continue to hope that unions have earned themselves a meaningful voice in Obama’s administration.

“In this kind of environment, with the economy we have, I think this will be a big job,” said Tom Balanoff, the president of SEIU Local 1 in Illinois and an old Obama ally. “I’m sure he’ll pick somebody who understands that that’s a job to promote the interests of labor or workers.”

Nissan to skip Detroit, Chicago auto shows.
The Associated Press, Wednesday, Nov. 26, 2008. Reported on Japan Times online.

Nissan Motor Co. said it is pulling out of the Detroit and Chicago auto shows, citing the tough economy and the lack of new vehicles to unveil.

“Based on the fact that we have no major new products to show at the 2009 Detroit and Chicago auto shows, as well as the current economic conditions which will impact the shows’ marketing effectiveness, we have decided to cancel our involvement and participation,” Japan’s third-biggest automaker said.

The announcement comes after Nissan made a splash last week at the Los Angeles Auto Show, where it unveiled the Cube, an updated 370Z roadster and a low-priced Versa. Its Infiniti luxury line unveiled its G37 convertible at the show.

Nissan is the latest and biggest automaker to withdraw from Detroit’s North American International Auto Show, scheduled to take place in January. Mitsubishi, Land Rover, Rolls-Royce and Suzuki have all said they will not attend.

“I certainly respect Nissan and any of the other companies that have to make a decision — hopefully a short-term decision,” said Carl Galeana, cochair of the Detroit show. “It’s tough for everyone right now.”

Although relatively small in terms of consumer attendance, the Detroit show tends to get the most media exposure among the major U.S. auto shows, especially from foreign journalists. The 2008 show attracted about 700,000 attendees last January.

Chris Denove, vice president of J.D. Power & Associates, said Nissan had little reason to spend the money on an appearance in Detroit, given that it already made its big product announcements in Los Angeles.

“Detroit consumers tend to be domestic buyers who typically are connected to one of the Big Three,” Denove said. “Ergo, (there are) not a whole lot of actual customers to reach out to in Detroit (for Nissan), relative to the cost of the show.”

The L.A. Auto Show, which is open until Nov. 30, attracted almost 1 million attendees last year, a spokesman said. The New York Auto Show claims the largest attendance at about 1.2 million. The Chicago show, scheduled for February, does not report attendance figures but claims it is the largest show in terms of space, with 117,000 sq. meters.

Automakers have been cutting back on car shows as they seek to trim their budgets during the difficult economy. General Motors Corp. and Chrysler LLC scaled back their presence at the L.A. show, where they unveiled no new cars and held no briefings.

Natives Hope Obama Will Be Their President, Too.

By Haider Rizvi from IPS

NEW YORK, Nov 24 (IPS) - During his election campaign, Barack Obama repeatedly said that he cared about the issues facing Native American communities and insisted that they could trust him — pledges that Native leaders are now watching closely as the president-elect appoints a new cabinet and fills other key federal posts.

So far, Obama has named six native political figures to his transition team — half of them assigned to assist in Interior Department policy, budget and personnel changes.

“We’re lucky to have such stellar representatives with people with whom Indian Country has really good relationships,” said Jacqueline Johnson-Pata, executive director of the National Congress of American Indians, a nonprofit organisation that represents more than 250 tribes.

Native advocates Mary Smith, Mary McNeil and Yvette Robideaux have been assigned to work on justice, agriculture and health issues, while three current and former attorneys with the Native American Rights Fund — John Echohawk, Keith Harper and Robert Anderson — will advise Obama on changes proposed within the Interior Department.

The Natives, also known as “American Indians”, have their own sovereign governments, which the United States recognises in accordance with its constitution and under treaty obligations. However, as the Native leaders observe, their communities have always suffered from inattention during the transition and early years of past U.S. administrations.

“If appointments and major policy decisions are delayed for extended periods, the long-term issues in Indian Country are left unaddressed and handed on to the next administration,” said Johnson-Pata. .

In her view, “any significant reform efforts must be planned during the transition and start at the beginning of an administration if they are to succeed.”

As he continued to reach out to new voting blocs past summer, Obama made a campaign stop at an Indian reservation in Montana, where he told the audience that, as an African-American, he identified with their struggles.

“I know what it’s like to not always have been respected or to have been ignored and I know what it’s like to struggle and that’s how I think many of you understand what’s happened here on the reservation,” Obama said.

In his speech, Obama added: “A lot of times you have been forgotten, just like African-Americans have been forgotten or other groups in this country have been forgotten.”

Statistics show that the indigenous communities, which constitute about one percent of the U.S. population, are among the most marginalised sections of society with regard to health care, education and employment.

In March 2006 and again in March 2008, a panel of U.N. experts analysed the U.S. government’s treatment of indigenous Americans and ruled that it was guilty of racial discrimination.

In its 2008 report, the U.N. Committee on the Elimination of Racial Discrimination (CERD) also urged the U.S. to sign onto the U.N. Declaration on the Rights of Indigenous Peoples, which the current administration has continued to reject despite the fact it has been approved by a vast majority of the U.N. member states.

“Obama has stood with us and it is now time that we stand with him,” he said in a statement, describing the Natives’ interest in the political process as unprecedented. “Indian country has responded to the Democratic message of change and the need for urgency.”

“We have many who go without because our leaders have failed us. This election means much to them. Obama understands this while others remain oblivious. Let us, as Native people, help him.”

On the campaign trail in Montana, Obama was adopted as an honourary member of the Crow tribe, a ceremony that native activists say is reserved for special dignitaries. On that occasion, he was given a new name, “Barack Black Eagle”.

Many activists fighting for the rights of indigenous people say they are hoping that the Obama administration would also re-examine the case of Leonard Peltier, the legendary hero of the American Indian Movement who has been behind bars for nearly four decades.

“Until the law is harnessed to protect the victims of state violence and racism, it will serve as an instrument of repression, just as the slave codes functioned to sustain and legitimise an inhuman institution,” Peltier wrote in the letter.

***

Still, Obama has reached out more to the Native community than most others with presidential aspirations.

“That’s the commitment that I’m making to you, and since now I’m a member of the family, you know that I won’t break my commitment.” he said. The question many Natives are now asking is: Will he? 

Waxman’s Win Marks Seismic Shift in House.

The clash between Reps. Henry Waxman (Calif.) and John Dingell (Mich.) was notable in the recently quiet and stable House Democratic caucus.

By Ben Pershing, The Washington Post, November 24, 2008.

Democrats have a comfortable majority now in the House, and they will again in January. Nancy Pelosi is the Speaker now, and she will be again in January. In a capital that is in the midst of a titanic change, House Democrats have been a relatively calm sea of stability since Election Day. Until this morning.

Rep. Henry Waxman’s (D-Calif.) defeat of Rep. John Dingell (D-Mich.) for the Energy and Commerce Committee gavel represents a huge shift in the way the Democratic Caucus runs itself, and in the broader culture that has developed over decades around a few hard and fast rules governing the distribution of power on Capitol Hill.

What does Waxman’s victory really mean going forward? Given the shear scope of the panel’s jurisdiction, and how long it’s been since anyone other than Dingell was the committee’s top Democrat, it will be weeks or months before all of the effects of Waxman’s win are known. But here are three implications that are clear right now.

1) Seniority Is Dead. In a way, the House Democratic Caucus has long operated like a public employees’ union. Seniority ruled the day, and if you stuck around long enough — meaning you had a safe enough district to get reelected cycle after cycle — you would keep moving up the committee ladder, almost without regard for merit. That’s not to say the current crop of chairmen are necessarily bad at their jobs (though some probably are), only that the people who hold gavels don’t necessarily have them because they are the agreed-upon masters of their field.

In theory, Democrats did away with seniority as the determinative principle for chairmen back in 1974, but in practice the longest-serving committee member has nearly always gotten the gavel.

Notably, since Democrats captured control of the House in the 2006 elections, Pelosi has kept on the books a Republican-authored rule mandating six-year term limits for chairmen, so many of the current chairs would be termed out in 2012. But there have been rumbles from Dingell and his ilk that they would try to get that rule scrapped, a step that appears highly unlikely given today’s events.

Now, there are some nervous chairmen out there. If Dingell can be beaten, why not Ways and Means Chairman Charlie Rangel (D-N.Y.) or Judiciary Chairman John Conyers (D-Mich.)? Yes, those chairmen will support each other, just as most probably voted for Dingell. But there are a lot more members in the Democratic Caucus who aren’t chairmen than members who are, and many of them would like their own shots at a gavel someday.

Also nervous today — lobbyists. The seniority system has made it easy for K Street to know who will be in charge of a committee tomorrow, and the day after that, and thus where to put its money and whose former aides to hire. The system begat a cycle: The longer chairmen stayed in place, the more allies they had on K Street and the more money they raised, thereby cementing their power and helping them stay even longer.

Dingell has been the top Democrat on the Energy panel for 27 years. Is that really fair to the other members of the committee? The most common argument made in favor of the seniority system is that it allows chairmen to build up expertise. But Waxman has been on the committee for more than three decades himself. Is he really not an expert? Obviously, the “seniority = expertise” argument didn’t fly today with the majority of the Democratic Caucus, which means it probably never will again.

After this morning, seniority isn’t out the window altogether — no freshman will chair a committee anytime soon — but it’s hurting.

2) Ideology Matters. The fact that seniority was the deciding factor in handing out chairmanships for so long meant that ideology wasn’t. Members didn’t get and keep their gavels because the majority of their colleagues thought they were right on the issues, they got them because their constituents did and kept sending them back to Washington for another term.

The lawmakers who can be reelected for decades tend to be from the safest districts. Which has generally meant that the most conservative Republicans and the most liberal Democrats have accrued seniority. Dingell is an unusual case, in that he is actually to the right of his Caucus on a few issues, notably on abortion and, most importantly, on the environment. His district has a massive auto industry presence and his wife, Debbie, is a senior executive at General Motors; she is actually a descendant of the company’s founders.

So for years, Dingell has resisted efforts to force auto companies to make cleaner, more fuel-efficient vehicles. Though there are other Democrats who represent industrial states and share Dingell’s concerns, most members of the party lean toward the environmentalist side. Dingell simply does not represent the majority of Democrats’ views on environmental issues, and until today, he suffered no consequences for that.

Now, he’s suffering, and the next time a chairman decides to use his committee to advance the interests of his district while ignoring the interests of most of his colleagues, he might think twice.

3) Pelosi Rules. Lest anyone doubted who was in charge of House Democrats, today’s vote provided a helpful reminder.

Pelosi was publicly neutral in the race, but her silence spoke volumes. Her unwillingness to back the longtime chairman or publicly back the seniority system made it clear where she stood. Generally, if journalists write something that Pelosi or her staff think is wrong, they will hear about it in short order. Many reporters wrote that Pelosi was believed to be silently backing her fellow Californian Waxman, and Pelosi’s office made no effort to dissuade the press from that storyline.

(House Majority Leader Steny Hoyer (D-Md.), meanwhile, tried to broker a deal between the two gavel contenders and then spoke out in favor of Dingell at Wednesday’s Steering Committee meeting, and Dingell lost that vote anyway, before losing today’s as well.)

Pelosi has made it clear to chairmen since becoming Speaker that they answer to her. Most of the time, their interests and hers coincide, but her battles with Dingell have been the most high-profile exception. The Speaker created a special panel on global warming issues specifically because she knew Dingell wouldn’t move a bill she found acceptable, and then Dingell mocked and tried to stymie the creation of that special committee. Pelosi is a committed environmentalist, and Waxman’s win has cleared away her biggest internal obstacle to passing more stringent regulations on that front.

Beyond Dingell, the erosion of the seniority system means that Pelosi’s hand is stronger than it was yesterday. Whereas before chairmen were able to defy their leaders largely without fear of losing their jobs, now they know that’s no longer the case. Pelosi was already shaping up to be one of the most powerful Speakers in recent history. Now, with chairmen less likely to freelance and a larger majority being sworn in next January, she’s even stronger.

By Ben Pershing |  November 20, 2008

Obama, the Senate, and China … All Eying the Big 3
Posted by Jane Hamsher, Firedoglake at 11:09 AM on November 21, 2008.

“If I was GM’s CEO, I’d be on a plane to China.”

I see the Obama team is already denying this:

“President-Elect Barack Obama’s transition team is exploring a swift, prepackaged bankruptcy for automakers as a possible solution to the industry’s financial crisis, according to a person familiar with the matter.

Obama’s team has already contacted at least one bankruptcy- law firm to say that Daniel Tarullo, a professor at Georgetown University’s law school who heads Obama’s economic policy working group, would call to discuss the workings of a so-called prepack, according to this person.

Since the election, Team Obama has become “trial balloon central” (if they were genuinely serious about firing the leaker, Rahm Emanuel would hit the Chief Of Staff revolving door post-haste).  They have been strategically using the media to test public opinion, but in this case I’d imagine they also did so with the intent to force the unions, bond holders and other stakeholders in the Big 3 into a more pliant negotiating position.

It was interesting to watch how quickly the chess pieces moved yesterday in the Senate.  As soon as the Senators from Big 3 states called a press conference to announce their bipartisan plan to repurpose the Energy Bill money as a bridge loan, Reid and Pelosi stepped on their press conference and said they were calling a special lame duck session to deal with the problem.  They usurped the cameras and demanded the delivery of a restructuring plan to Dodd and Frank’s committees on December 2 — something Obama had quietly called for in his 60 Minutes appearance only last Sunday.

If I was Waggoner, I’d be on a plane to China right now (probably coach).  The Chinese have announced their desire to buy the Big 3.  Why not?  It would allow all their debts to be paid off so their suppliers and other creditors won’t go under in a domino effect, their stockholders won’t get shafted (which should make Wall Street happy), and they could easily make both interest payments to bondholders and  the $35 billion payment to the VEBA fund that will take UAW pension and health care legacy costs off their books.

However, there are some long-term implications that could make this less than appealing for the US.  As Ian Welsh has pointed out, there’s a reason the Chinese are so keen to buy a US automaker:

The moment when China becomes a consumer driven society is the moment when the US loses its leadership of the world, and when if it’s economy isn’t in good shape, it crashes out.

[]

Why?  Because the US needs massive inflows of money from nations like China and Japan in order to finance both the government and private consumption.  China and Japan, and other countries, for that matter, have amassed holdings of US securities, cash and so on, in the many trillions, as a result.  They have been willing to buy assets that they know they will probably not see a full real return on because the US buys their exports, and in China’s case, is busily shipping American jobs to China, thus industrializing China.

The world needs the US because the US is the “consumer of last resort”.  It buys everyone else’s stuff, issues a pile of securities and dollars in exchange, and exports industrialization to China in exchange for deindustrialization and cheap consumer goods at home, which kept down inflation for a very long time.

[]

At the current time, China is not ready to have a consumer society.  As Stirling points out, it’s about 2 economic cycles away from being able to switch to one.  If it gets to buy up a US car company, it’s probably one cycle away.  Since the US is in a really really deep hole and currently digging deeper at a ferocious rate (the five trillion spent on the financial crisis will add to the US’s outstanding debt) when this happens is a big deal.  Two economic cycles gives America longer to get its house in order and fix things so that when China does take off, it doesn’t find itself unarmed with every major nation in the world able to annihilate its economy whenever they feel like and take only minor losses themselves.

I’m supportive of Obama’s idea that there needs to be a plan going forward for Big 3 viability before they get a bridge loan, but “viability” may not mean “profitability.” If we’re serious about converting to a green economy, when gas prices are low people want to buy the gas guzzlers that Toyota and BMW and Mercedes are still making in Richard Shelby’s right-to-work state.  You can’t demand that the Big 3 be profitable and make fuel efficient cars that people don’t want to buy, so you’ve either got to levy an unpopular gas tax or give people other incentives to make the cars attractive.

The fact is that the Big 3 and the UAW  have already made a lot of the structural changes and compromises that they need to make going forward, and holding the threat of “organized bankruptcy” over their heads when a buyer is standing there waiting in the wings seems unrealistic.

If we’re playing chicken here, let’s let Richard Shelby and Jim Inhofe go back to their states and tell their constituents that Chevy is being sold to the Chinese (Inhofe visibly bristled at the very suggestion on CSPAN the other day).

That’ll go over well.

Tagged as: china, obama, gm, green economy, economic crisis, the senate, the big 3
Jane Hamsher is the founder of FireDogLake. Her work has also appeared on the Huffington Post, Alternet and The American Prospect.

Bailout or Bust: How to Save the Big Three From Themselves?

Opinion by: Titus Levi, Truthdig, Thursday, November 29, 2008.

CEO’s of the big three automakers were on Capital Hill Wednesday requesting a bailout. (Photo: Getty Images)
The American automobile industry occupies a near-mythic status in the nation’s cultural and economic imagination. President-elect Barack Obama echoes the sentiments of many when he says that Detroit is “the backbone of American manufacturing.” If it is-Detroit’s economic importance is great but now occupies a lesser role than it did before it entered a slow-but-steady decline in the 1970s-then it suffers from acute and advanced damage that will require major surgery. And like any major surgery, treating Detroit’s malaise will be a complicated affair with no assurance of success. However, doing nothing may be worse, especially for the state of Michigan.

According to Bureau of Labor Statistics’ figures for September 2008, Michigan’s labor force was about 4.9 million, with about 4.5 million holding jobs. That’s a significant decline from September 2007, when the labor force numbered just over 5 million, with 4.6 million employed. The state lost roughly 149,000 jobs in the period and saw unemployment rise from 7.3 percent to 8.7 percent, which is 2.2 points higher than the national average. The rate would have been even higher if people hadn’t dropped out of the labor force altogether.

The Big Three trimmed thousands of jobs in the state during that period, which no doubt triggered additional job cuts among automotive subcontractors and suppliers, various retailers, and even homebuilders and home improvement firms. These job losses keep politicians, business leaders and citizens up late at night. As Michigan Gov. Jennifer Granholm recently quipped: “Forget ‘Drill, baby, drill.’ Here it’s ‘Jobs, baby, jobs.’ “

All told, General Motors, Ford and Chrysler employ somewhere around 500,000 people, many of them outside Michigan. However, these figures underestimate the total employment impact, since at least 3 million Americans rely on the U.S. auto industry for their jobs, with the highest concentration in and around Michigan. The Center for Automotive Research calculates much higher estimates: about 7 million jobs directly and indirectly tied to the industry, with 2.5 million hanging in the balance in the event of a 50 percent contraction in output from the Big Three.

This brings us to a simple cost-benefit analysis: $25 billion in loans for the industry that will save millions of jobs and about $150 billion in economic activity in 2009 alone. So it’s a no-brainer, right? Well, not exactly.

There is no guarantee that throwing money at Detroit will save these companies and the network of jobs that they sustain. Even if the companies do survive, we can almost certainly anticipate steep job losses anyway. Job losses will be increased if GM and Chrysler’s parent company, Cerberus Capital Management merge. But will cutting jobs now spare jobs in the long run? That question dominates all others in the conversation.

Focusing on jobs moves us from an argument about nostalgia for American manufacturing prowess and bailouts of large, and largely incompetent, firms to the more meaningful conversation about livelihoods. Doing so takes us beyond purely economic analysis, since the value of a job exceeds its economic value to individuals, their families and their communities. Livelihood includes paying for basics like food and shelter, but also touches upon important, if hard to measure, assets like one’s sense of identity and the health of neighborhoods and towns.

Applying a cold, hard economic calculus would probably throw cold water on the idea of a bailout for Detroit. First, the companies may well be beyond hope. They have been slow to change, they repeat the same mistakes and they turn out products that too often do not compete successfully with imports. Quality, safety, durability and customer satisfaction numbers remain spotty. Moreover, the so-called “bridge” funding that Detroit hopes to receive may be a bridge to nowhere: It will take years to work off the debts that weigh down consumers and governments, which will constrain spending for several quarters if not years.

Once we emerge from this hole, Americans may renounce our spendthrift ways and that could leave the entire automobile market much smaller over time. In short, the demand side of the market may not rebound sufficiently to resuscitate Detroit. The supply side looks no better: Over time, Detroit will face tough competition on many fronts. Japanese, German, Korean-and it had to happen-Chinese and Indian automakers will battle American carmakers tooth-and-nail. Simply put, the amount of money that Detroit can earn over the next 10 years may not cover the “loans” they want from the Feds. Taxpayers will likely end up footing the bill.

But if Detroit doesn’t get an infusion of cash, then what? The companies could declare bankruptcy, but so far they have stubbornly refused to consider that possibility-with good reason. Market research shows that 80 percent of consumers will not buy cars from insolvent firms. Therefore, GM’s leadership equates bankruptcy with liquidation. However, this view may well be somewhat overwrought. Bankruptcy would likely allow some leaner, meaner and more durable versions of GM and/or Ford to survive. (Chrysler looks like a dead duck; the only reason GM has any interest in the firm is its $11 billion cash stash.) Overcapacity could be pared back more rapidly under the watchful eye of bankruptcy courts and the companies could shed various obligations. This bodes ill for livelihoods and communities and must be carefully managed to lessen the damage to both. However, while going the bankruptcy route may make short-term economic sense, it may be too high a price to pay in terms of the devastation it would inflict on jobs, families and communities.

So what to do? No shortage of ideas have floated through the media, the blogosphere (The Huffington Post has been especially active on the subject, including articles by Neil Young, GM family man Ricky van Veen, and Raymond J. Learsy), broadcasters’ letters’ sections, and probably over many a kitchen table conversation, including my own, where friends engaged in a spirited examination of Detroit’s tendency to confuse novelty-releasing “new models” each year-with genuine innovation.

First, let’s put together a careful cost-benefit analysis. To begin with, Detroit must open its books to thorough scrutiny, and that includes the tight-lipped Cerberus. As a taxpayer, I’m sick and tired of the leap-before-you-look approach to taking action. I’m equally exasperated with Detroit’s tired claims of “trust us, we’re professionals” in demonstrating genuine recalcitrance to changing its organizational culture.

Second, we need to produce a no-holds-barred assessment of the managerial dysfunction at these firms and come to terms with what needs to be done to improve performance and change organizational cultures for the better. Given the track record of these firms, and their reaction to the bad news that immediately had them pulling back on innovation and new product development, I’m not sanguine about the quality or nimbleness of the current leadership. They have to go as part of this process.

Third, jettison utterly hopeless brands and initiatives like Hummer while focusing on integrating innovative ideas into GM’s R&D, design and production systems.

Fourth, engage in a thoughtful analysis of what individuals, families and communities lose in an environment of sweeping job losses and what can be done to ease the pain. This is especially important in places like Michigan, which will suffer near-Great Depression levels of unemployment and disruption, at least in the short run.

Fifth, Detroit could become a public-private partnership built around encouraging innovative and viable ideas in transportation technology. This would allow the automakers to readily leverage the research going on in the U.S. on various fronts and to create systems for developing ideas into commercially viable packages and processes. Even if the Little Two lose some money, they will provide jobs and harness economic benefits that will accrue across the country and even the world.

Finally, if GM and Ford do go into bankruptcy, they probably need to be given some federal support in the form of debtor-in-financing, since financial markets will not back Detroit given the conditions of banks and the auto industry.

My instincts as an economist tell me to cut the Big Three loose, letting them go into bankruptcy so that “the market” can decide their fate, but my heart tells me that we must do something to assure that communities most dependent on the automotive industry and its jobs do not suffer as post-Katrina New Orleans-or pre-Katrina New Orleans-has. After all, that city suffered through a century of decline before its final humiliation and abandonment. Parts of Michigan have endured long-term decline as well, and this experiment in market adjustment has produced far too many losers to regard as anything like a successful treatment.

As a nation and as an economy, we probably can survive the loss of cities like Detroit and Flint, but letting that happen will likely bring on human losses that do not show up in economic statistics. As we decide the automobile industry’s fate, we need to consider something else in this process: What kind of lives will we consign the people of Michigan to living? What kind of people have we become when we plan for, and perhaps execute, the demise of whole cities and even states? How can we prevent genuine harm from coming about and begin the healing process for those who have been and will continue to be displaced by the shrinking of the U.S. automobile industry? How can we, to borrow a sentiment from Albert Camus, strive our utmost to be healers?

We reproduce here the Wall Street Journal Article as we vouch that it was the least favorable regarding this change, and as such proves the high importance of removing the man who for years guarded the US Automotive Industry from the need to make meaningful change - and by doing so condemned it to the obvious bankruptcy stage they find themselves in just these days.

Mr. Dingell, in his mistaken effort to reassure the automotive workers’ unions that their exaggerated gains bear in them the kernel of the malaise that will lead to the demise of their industry, stood in the way of having relevant fuel efficiency legislation - so - with the increase of the price of oil - the demand for Detroit gas-guzzlers plummeted, and with it the fate of the three companies and the thousands of supplier companies.

The man had also both his knees replaced, it is a sorry sight to see him wheeled out, but the world needs this change and the way he backed the worst in American Industry, the fact that his wife is an auto-motive company executive, did not even matter as clear conflict of interest. He was a disgrace also to his other backers - those from the auto-manufacturers’ labor unions.