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Archive for December, 2008

Since I was last here, the auto bailout has already gone down. It looks like the president will use some of the $700 billion to step in where Congress (or really the Senate GOP) didn’t.
While I don’t know if bailout or bankruptcy is the right solution for the Big Three, I do know that the GOP rationale for not bailing out the industry just doesn’t make sense. If you want wage restrictions for companies that get bailout money, why did you fight so hard against executive compensation rules for the financial companies that, you know, got us into this mess? Why weren’t across the board wage cuts part of the AIG bailout, even if we ignore the executive compensation issue? Heck, the US Government is in huge amounts of debt. Why doesn’t a congressperson introduce a bill to cut the salary of congress by the same amount as the proposed UAW cut?
I honestly don’t have a problem with the people who are saying “They should just go into bankruptcy, because the consequences won’t be that bad, and it’s better in the long-term.” Salon quotes the conservative blog “Hot Air”, who says about the same thing:

If they’re convinced that economic catastrophe is inevitable and don’t want to burn any more taxpayer money trying to deflect the asteroid, that’s fine. If, on the flip side, they think the consequences of letting the Big Three fail and losing a million jobs in this economic climate won’t be that bad, that’s fine too. Both are good reasons to oppose a bailout. But make the case. Explain to me why, in the middle of a global economic crisis, propping up a failing industry to save jobs at least until the crisis is over is a worse option than pulling the plug now.

Now we have fallout from the bailout failing. First off, Andrew Leonard from Salon, with an ironic little story. Bob Corker of Tennessee was the GOP’s lead on killing the bailout. Once the bailout died, GM announced that it’s shutting down most of its plants, including the one in Spring Hill, TN. Whoops.
Next, we have Rachel Maddow with a pretty eloquent little rant about the GOP’s new platform: reducing the wages of American Workers. I can imagine the bumper stickers now.
And finally, every action in congress has political consequences. As Andrew Leonard points out, the economies of Michigan and Ohio are already in serious trouble. If this causes a lot of layoffs and the state economies get worse, do you see them voting for republicans any time soon? I’d say it’s pretty unlikely. The GOP is starting to look more and more like a regional party…maybe they like it that way, because they sure don’t seem to be making many friends.

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The title of this post was inspired by an update of Atlas Shrugged for the current crisis. The money quote is:

He walked toward her and sat informally on the edge of her desk. “Why make a product when you can make dollars? Right this second, I’m earning millions in interest off money I don’t even have.”

(via Andrew Sullivan)

  • Let’s talk bailouts! It looks like the Big Three will get a cool $15 billion. Steve Clemons has a great post pointing out that nothing in the bailout will prevent the big three from offshoring those jobs that we’re saving. There’s a link hidden in there that points out that we could buy the entire Big Three for about $3 billion, rather than give a loan of five times that.
  • Andrew Leonard points out, “Earth to G.M.: No one is buying your cars right now! Your business is kaput. How much more stigma can bankruptcy add than your own mismanagement has already spawned?”
  • Andrew Leonard again, pointing us to a Malcolm Gladwell article about how the Big Three stuck itself with all the pension liabilities, among other obligations. Leonard points out that if Detroit had fought for nationalized health care, they would probably be in a different situation.
  • Jonathan Gruber talks about why health care reform would be good for the economy. (via Mark Thoma)

We’ll stick with the short post today. Lots of economic things coming, and probably some talk of education too.

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As of today, Barack Obama has officially unveiled more than half of his cabinet-elect (along with a few leaked members), but a few glaring omissions remain – particularly at the Department of Education. This is a story that we here at BTG will follow eagerly over the coming days and weeks, beginning with this list of 3 prominent candidates:

Joel Klein

Current Job – Chancellor of New York City Department of Education

Prospects: Klein has been a controversial figure during his tenure in New York, angering parents, community groups, and teachers at various times. At the same time, he is an old Washington hand and attorney (who led the anti-trust battle against Microsoft). Klein has won wide support from the philanthropic and corporate communities, as evidenced by the amount of private money used to support pilot initiatives in New York, though a New York Magazine feature details his complicated relationship with teachers’ unions. Smart money says that Klein elects to stay in New York, where his boss is seeking a 3rd term. At the same time, Klein’s reputation as a results-oriented pragmatist might appeal to Obama’s desire to address inequities in education.

Linda Darling-Hammond

Current Job – Professor at Stanford University School of Education

Prospects: Obama recently tapped Professor Darling-Hammond to serve as the chair of his education policy working group. Her expertise is in the area of merit pay, and she has been a consistent and principled opponent of NCLB. In a 2007 piece for The Nation she called for a new Elementary and Secondary Education Act that would broaden the criteria for school evaluation, and introduce a new Marshall Plan for teaching to improve recruitment, training, and retention. Darling-Hammond is especially interested in rectifying our educational debt (rather than achievement gap) by making federal funding to states contingent on the demonstration of progress towards equal access to educational resources and opportunities. Darling-Hammond has made waves by criticizing Teach For America, saying “If one takes the lowest possible standard and accepts that as a goal, then Teach for America is great.” At this point in the game, I think it’s fair to say Darling-Hammond would represent the premiere academic choice for Obama. Her qualifications as a researcher is unparalleled, and her emphasis on teacher development might appeal to Obama, who has gone so far as to suggest his support for merit pay.

Arne Duncan

Current Job: CEO, Chicago Public Schools

Prospects: What’s not to like? Duncan is from Chicago (Obama’s Hyde Park, even), runs the Chicago Public Schools, and had a career in professional basketball. He has championed small neighborhood schools, early childhood education, and “clean slating” failing schools by dismissing staff. Will it matter that Richard Daley wants Duncan to stay in Chicago? Duncan has introduced merit pay in Chicago, a sign of his willingness to challenge certain liberal orthodoxies. Over at the daily tracking poll at EdExcellence’s Flypaper, Duncan remains the odds-on favorite for the appointment. Duncan was the only prominent educator to sign the manifestos advanced by both the Bigger, Bolder Approach to Education camp and the Education Equality Project. A Duncan choice would demonstrate the kind of broad, pluralistic vision that Obama might want in his cabinet.

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