Obamaclypse. It's at 7997 or thereabouts now, with some late trades still being tallied.

Strangely, the New York Times stock price has soared 200% to $15.33.

Just kidding, it's at another all-time low.

Can we arrange a bailout for the New York Times? To subsidize it as it keeps the Moron Sulzberger in control of it, losing money hand over fist?

Yes, we can!

Thanks to Scott.

Posted by: Ace at 11:53 AM | Comments (91)
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Whoops! DrewM already cited the Op-Ed. Oh well. I've wanted to write on this for a while... despite not really knowing what I'm talking about.

Hank Paulson doesn't know what he's talking about, either, but he's pretty comfortable offering diagnoses and prescriptions.

...

Romney doesn't quite say "Drop Dead!," but does want Detroit to take the normal course of action of failed business, chapter 11 bankruptcy.

His op-ed in the NYT was good, too:

I have several prescriptions for DetroitÂ’s automakers.

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.

That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.

I feel stupid offering my opinion, as I don't know what the hell I'm talking about. But this is how it seems to a moron:

Detroit has been dying, and should have been dead, fifteen years ago.

But something intervened to keep them alive, temporarily. And for a while they looked healthy... but they weren't. That intervention was the SUV craze.

SUVs became huge. And this craze allowed Detroit to conceal its massive competitive disadvantages. Because SUVs were pricey cars, the excess cost of labor could be more easily hidden in the cost of the car. And, I'm guessing, SUVs are not terribly more labor intensive than an entry-level two door sedan; the increased costs come from all that extra steel, a bigger engine, better components, etc. Ultimately they have pretty much the same number of welds and screws and rivets as cheap entry-level cars. A few more, an extra few hours to assemble, but not much more.

If an entry level two-door cost, say, $6,000 in parts and $5000 in labor to produce, and sold for $10,500 (yes, selling for a $500 loss just to maintain market share), an SUV might cost $14,000 in parts to produce, and $7000 in labor, and might sell for, I don't know, $30,000. A nine thousand dollar profit, partly because people are wiling to pay a lot more pure-profit on a luxury (or at least semi-luxury) purchase.

The Japanese (and non-union American South) would still have a $2000-$3000 competitive advantage in the costs of labor to produce such vehicles, but that's only a small fraction of the vehicles' total cost, and, again, at that price level people are making their decision more on features, design, etc., and less on pure cost.

(Trucks, by the way, similarly work in Detroit's favor, but unlike SUVs, demand for trucks remains, basically, static. Oh I'm sure they've been selling somewhat better over the years as trucks have gained a coolness factor, but they certainly didn't explode like SUVs. So while trucks might continue to be profitable for Detroit, it's a small part of the market and not a really growing one.)

Detroit has not been able to make decent entry level cars for a long, long time. Two generations of Americans have learned to avoid low-cost American cars at all costs. They're simply crappy cars -- to offset the big additional labor costs, they have to go with the cheapest possible parts. They can compete in quality or they can compete on costs, but not both. (I think they actually half-compete on both, resulting in cars that are still a thousand or $1500 more than Japanese cars of that class, but still a lot less car for the money.)

If the SUV craze had not hit so hard and persisted so long, Detroit never would have recovered, such as it did, in the nineties to look like a somewhat profitable industry. They got extraordinarily lucky that the public just happened to go bananas for one of the few types of cars they could sell at only a small competitive disadvantage.

The trouble is that you can't persist long on the basis of a lucky fluke. The SUV craze would have ended eventually, anyway, probably, but $4.25 gas surely cut the craze short. The public doesn't want to buy low-gas-mileage car-trucks anymore, leaving Detroit in the position of trying to produce lower cost, lighter cars... where once again their competitive disadvantage is at its most acute.

Incidentally, the auto manufacturers about to be laid off can partly thank the Democrats' offshore drilling ban and ANWR ban for their coming misfortunes. American oil stocks flowing into the market would not have kept oil costs from rising to historic highs -- but they would have kept it from rising quite so much. If the Democrats were not ideologically committed to artificially-spurred rising gas prices as a supposedly "natural" check on gas consumption, SUVs would not be at their current level of disfavor and Detroit might not be on the verge of bankruptcy. But the Democrats are so ideologically committed, and that means that the car-type keeping Detroit afloat is now all but dead.

The SUV craze put off the reckoning, but now the reckoning is at hand. Detroit simply cannot continue paying its workers $73.00 per hour in salary and benefits when the Japanese pay its own workers $43.00. You can't engineer your way around that problem -- and, in any event, even if you do engineer a cheaper, smarter way to make a car to help offset that disadvantage, the Japanese will be doing the same thing in a month, anyway, taking away that very brief advantage. (And it's silly to even pretend that American engineers and designers are superior to the Japanese -- possibly they're on the same level, but no way are they so superior they can out-engineer them to over come a $30.00/hour labor disadvantage.)

A bailout only delays the inevitable changes that must happen. Which is what the automakers want, and what the auto workers want. They want delay. They want the government to continue subsidizing a model that just can't work without outside help.

The rest of us shouldn't want that, though. It's one thing to give a relative or friend a loan in a pinch if you're comfortable that it's a one-time thing just to get him past a bad patch. But if he's addicted to drugs and putting most of what little money he has up his nose, there's no such thing as a "loan." What there is is the first payment of many future payments in a permanent subsidy for his bad lifestyle choices.

Time for an intervention -- a real intervention, and not a bailout.

"Green Tech" Won't Save Detroit, Either: I hate the "green tech" label. Let's just say higher-gas-mileage hybrid models.

Hybrids have two, count 'em, two entire systems for providing locomotion, as opposed to a standard car's one. They have the conventional gas engine and the battery system.

That sounds like a doubling of labor costs, to me, at least as regards engine/power/etc.

So even if Detroit could flood the market with hybrids, and even if the public wanted only such vehicles, that would mean... the Japanese and non-union, non-Detroit autoworkers have an even greater labor cost advantage on such models.

Perhaps SUVs could remain popular were they hybrids... but in that case, the public would be buying non-Detroit made hybrids. Hybrids are pretty damn expensive, and those double-labor-costs will make Detroit models unattractive. There's only so much excess cost one can hide in a higher price. When it gets to the $8-10,000 level, even fairly rich people notice.

Posted by: Ace at 10:39 AM | Comments (206)
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Nice.

Her article, by the way, is atrocious. Not just for the predictability of it, but for the radioactive smugness at her own alleged wit and humor.

She's not funny. She's cutesy, in a very self-satisfied way.

Thanks to KingShamus.

Oogedy-Boogedy: So Kathleen "Who? Parker refers to religion -- as that "oogedy-boogedy stuff." In a follow up, Goldberg takes her to task.

Posted by: Ace at 09:38 AM | Comments (166)
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I know all about Mitt's conservative heresies and they prevented me from fully supporting him in the primaries (though I leaned towards him at the time) but he makes a rather good case for not throwing taxpayer money at a failed domestic auto industry.

He argues that bailing out the 'Big' 3 with cash will only delay their death, not prevent it. To save US automakers, you have to let them die and rebuild from the ashes (sorry, it's in the NY Times).

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.

That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.

Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.

The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”

...But don’t ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost.

It's actually fairly basic business and conservative stuff but we don't hear much of it these days so it sounds pretty shocking, especially on the Op-ed page of the Times. Hopefully lots of bloggers will link it, otherwise no one will see it and it is worth the read.

You can disagree with his call for the federal government to invest in basic research but if you are going to spend money on the problem, that's probably the better way to do it. And of course the idea that the UAW is going to change it's stripes any time soon is rather unlikely, though bankruptcy proceedings are about the best shot anyone has of getting it done.

For more on the failed Detroit business model ("Sure we lose money on every car but we make it up in volume!) check out this post from The Corner.

Posted by: DrewM at 09:22 AM | Comments (45)
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The upswing in pirate attacks around the world but especially off the Horn of Africa has been going on for awhile now but it's finally starting to break into the MSM (hijacking an oil tanker will do that).

Several nations have sent warships to that troubled area in an attempt to deal with the problem. It looks like the Indian Navy has drawn the first series bit of pirate blood.

An Indian naval vessel sank a suspected pirate "mother ship" in the Gulf of Aden and chased two attack boats into the night, officials said Wednesday, as separate bands of brigands seized Thai and Iranian ships in the lawless seas.

..."Pirates were seen roaming on the upper deck of this vessel with guns and rocket propelled grenade launchers," said a statement from the Indian navy. Indian forces fired back, sparking fires and a series of onboard blasts — possibly due to exploding ammunition — and destroying the ship.

They chased one of two speedboats shadowing the larger ship. One was later found abandoned. The other escaped, according to the statement.

Larger "mother ships" are often used to take gangs of pirates and smaller attack boats into deep water, and can be used as mobile bases to attack merchant vessels.

The British Royal Navy, once the scourge of pirates has been told to ignore the problem lest captured pirates press a claim for asylum. The Indians seem to have dealt with that problem nicely by not taking prisoners. Nice.

If you are interested in following the pirate situation I recommend Eagle 1's blog. I've been reading him on this subject for at least a year now and he's all over it.

Posted by: DrewM at 08:10 AM | Comments (110)
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Maybe now the hard left will finally get really mad at al Qaeda. Sure, an attack that kills 3,000 people on American soil can be ascribed to a, "fundamental absence of empathy on the part of the attackers". But this? This is fighting words!

Al-Qaida's No. 2 leader used a racial epithet to insult Barack Obama in a message posted Wednesday, describing the president-elect in demeaning terms that imply he does the bidding of whites.

The message appeared chiefly aimed at persuading Muslims and Arabs that Obama does not represent a change in U.S. policies. Ayman al-Zawahri said in the message, which appeared on militant Web sites, that Obama is "the direct opposite of honorable black Americans" like Malcolm X, the 1960s African-American rights leader.

In al-Qaida's first response to Obama's victory, al-Zawahri also called the president-elect—along with secretaries of state Colin Powell and Condoleezza Rice—"house negroes."

Speaking in Arabic, al-Zawahri uses the term "abeed al-beit," which literally translates as "house slaves." But al-Qaida supplied English subtitles of his speech that included the translation as "house negroes."

The message also includes old footage of speeches by Malcolm X in which he explains the term, saying black slaves who worked in their white masters' house were more servile than those who worked in the fields. Malcolm X used the term to criticize black leaders he accused of not standing up to whites.

Between this and the Polish Foreign Minister's 'joke' about Obama's Grandfather, the far left and some mainstream liberals are going to be shocked to find out that racism exists in other parts of the world and not just America as they seem to think.

Posted by: DrewM at 07:52 AM | Comments (103)
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I meant to get this out earlier this week, but I hold to my commitment for open-blogging like Ace holds onto his Val-u-Rite. (they both end up in a smelly steaming pile of slop on LauraW's shoes.)

A follow-up by the man who created the How Obama Got Elected video has been posted. I think you'll find it very interesting in that it answers his critics quite nicely.

For instance:

"You are a conservative who doesn't like Obama so this is not credible"

This is my "favorite" liberal canard in these situations. They don't like the answers so they go all "Joe the Plumber" on the questioner. What my political beliefs have to do with the answers that Obama voters gave to simple questions that were recorded by cameras and independent pollsters is beyond me. So I guess the only way this experiment would be credible is if I were a liberal black lesbian??

Posted by: Open Blog at 06:59 AM | Comments (26)
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Semi-interesting tidbit for you to chew on briefly, then spit out because all studies like this are tainted with a little crap.

Researchers investigated how scarring might impact on mate choice for men and women seeking both long-term and short-term relationships. They found that women preferred men with facial scars for short-term relationships and equally preferred scarred and un-scarred faces for long-term relationships. Men, however, regarded women with and without facial scars as equally attractive for both types of relationship.

The participants for this study were recruited at a Harley Davidson swap meet.

Other characteristics that made a man more attractive for short-term relationships but not long term; "one percenter" patch on biker club vest, genital piercings.

Men remained indifferent to these characteristics, as well as whether or not the 'old lady' in question had more or less than the standard number of fingers and feet, whether she had facial hair, or whether she was merely a macabre leather scarecrow stuffed with hay and squashes.

Posted by: LauraW at 06:53 AM | Comments (41)
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The CEOs of GM, Chrysler, and Ford travelled in cushy comfort to ask Congress for our money.

All three CEOs - Rick Wagoner of GM, Alan Mulally of Ford, and Robert Nardelli of Chrysler - exercised their perks Tuesday by flying in corporate jets to DC. Wagoner flew in GM's $36 million luxury aircraft to tell members of Congress that the company is burning through cash, asking for $10-12 billion for GM alone.

"We want to continue the vital role we've played for Americans for the past 100 years, but we can't do it alone," Wagoner told the Senate Banking Committee.

Is this a PR problem or do they know they're going to get a bailout no matter what they do?

Posted by: Gabriel Malor at 05:14 AM | Comments (90)
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Posted by: Gabriel Malor at 05:06 AM | Comments (59)
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