I was driving by Gateway Bank here in St. Louis, Missouri late last Friday and saw something seriously unusual. It was about six in the evening, when the small parking lot next to the building is usually void of any vehicles. But on that day, the lot was full of a fleet of what looked like rental cars. Each car was new, freshly washed, and conspicuously generic. My first thought was that the bank was on the verge of collapsing and the FDIC was swooping in. I can’t remember the last time I saw a security guard monitoring this bank. But on this particular day there must’ve been at least four guards protecting the cars and the people. As I drove by I saw two of them standing on either side of the front door.
Not too long ago I heard an article on NPR about the FDIC and the way they move in on banks to try and keep them from going completely under. They typically move in on a Friday night, flash their badges, and start their work auditing the bank to get an exact picture of where the bank stands. In order to keep customers from making a run on the bank and making the situation worse, the FDIC moves with as much secrecy as possible and does its best to keep everything as normal looking as possible.
But it’s truly hard to hide the fact that an army of accountants and auditors and banking experts, not to mention a few security guards thrown in for good measure, just descended on this lone bank late on a Friday night. My curiosity piqued, I took the time to drive around the block to take a closer look. On the second pass, I saw guards three and four standing in the parking lot. One would escort people arriving at the bank inside, the other stayed and watched over their cars. There were a lot of white people showing up at this privately held bank in the heart of the black community. That in itself was noticeable.
Early the next day, the scene was repeated. The bank’s normal operating hours on a Saturday is something like nine o’clock to noon. The parking lot was bursting at the seam with generic cars again. I parked my car and approached one of the guards. After I explained that I lived nearby and couldn’t help but notice the cars, I asked the guard for what the deal was. Dude must’ve been bored and ready for any kind of conservation because he didn’t hold anything back. He confirmed that the FDIC had arranged for the bank to be sold to an outfit on the other side of the state in Kansas City. The bank was about to go under new management, but the FDIC was managing the transfer.
Gateway Bank was one of those success stories in which the black community had fought long and hard to make. If you were a black person living in St. Louis during the sixties, you weren’t getting hired by the dominant community’s banks and you weren’t getting a loan to buy that dream house or that car you wanted. Back in 1963, civil rights activists in St. Louis began protesting over Jefferson Bank & Trust Co.’s refusal to hire blacks for jobs. Prospects for financial advancement in St. Louis were pretty slim for blacks.
Disenfranchised blacks opened up a bank with a mission that it would not discriminate against black people. They soon were able to gain the support of the chairman of the board of the First National Bank of St. Louis. With support from the white community, Gateway National Bank opened in 1965. It was a collaboration between people in both the black and white communities. Today, Gateway Bank’s single branch is now a branch of Central Bank of Kansas City, Missouri. Gateway Bank had a troubled financial history and was on the FDIC’s list of problem banks since 2006. The transfer of ownership cost the FDIC over nine million dollars. This morning, it is business as usual at the bank that still has the name Gateway on its side.
Right now the number of bank failures this year is one hundred twenty three, indicating the worst financial climate in decades. As the economy has soured with unemployment rising and home prices falling leading its only a natural result that loan defaults would rise as well. And the FDIC expects bank failures to continue to cascade. Banks have been especially hurt by failed real estate loans. But banks that cater predominantly to the black community are especially at risk. They are sucker bets for failure in an age where people in the black community are told to exercise self reliance.
The historic Gateway Bank could have survived with just a tiny sliver of a fraction of the funds the government gave to such institutions as General Motors and Bank of America and the like. We know that those institutions, steep in their significance to the dominant community, are way too big to fail. Institutions like Gateway that play a significant part of the black community don’t even come close to being something worth saving.
A fool and his money are soon parted. And if that’s truly the case I seriously doubt if there are many people who would call me harsh for calling Antoine Walker one of the biggest fools the world has ever seen. Supposedly, in the twelve years Mr. Walker played in the NBA, the man made more than one hundred ten million dollars. That’s nine figures. You could take my salary multiply it by a thousand and still come up miserably short to that sum. Of course dude didn’t take all that to the bank. Subtract taxes and management fees and the like and still, Mr. Walker took home something way north of fifty million dollars. That is still a handsome king’s ransom.
And yet, what do I see on the net this morning? Mr. Walker is flat busted and sinking fast. The once multi millionaire athlete is being pursued by multiple financial institutions for unpaid debts. He’s been charged with passing rubbery checks in Las Vegas somewhere in the neighborhood of a million dollars. According to the Boston Globe he owes more than four million to creditors. Where did all of that fortune go? It’s not like it was confiscated for running an illegal kennel in his backyard.
Mr. Walker loved to live large. It wasn’t enough for him to drive a Bentley, he had to drive two. And it wasn’t enough for him to drive two Bentley’s. A Bentley is already custom built to its owners specifications. It’s one of the reasons why the car’s starting price is something like three hundred thousand dollars. But Mr. Walker had to take both of his custom built Bentley’s and have them customized even further with tricked out paint jobs and one of those global satellite enhanced sound systems that can compete with the best technology that NORAD has to offer. And to supplement his automotive taste, rumor has it that there were two Mercedes-Benzes, a high end Range Rover, a Hummer, and a Cadillac Escalade for when he wanted to slum around.
His entourage was large. His jewelry was large. Mr. Walker bought diamonds for his diamonds. The ring on his finger looks large enough to be used to scramble eggs on. He built a mansion for his mother complete with an indoor pool and ten bathrooms. I don’t care how active your bladder is, ten bathrooms is just a bit much. And despite all of this investing in all these material goods and then some, Mr. Walker didn’t invest a dime into anything that could’ve made money in the future when his basketball diary would eventually come to a close.
But now those days are long behind him. That picture you see with his name and number on his back was truly prophetic. Despite all the cars he had in his past Mr. Walker is now a walker. And that number twenty four under his name means that no matter what time it is during the day, twenty four hours a day he’s walking if he wants to get there.
It’s easy to see the folly of Mr. Walker’s ways. But more often than not we the lower life forms on the economic ladder do virtually the same exact thing with the relative pittance (compared to Mr. Walker’s salary one upon a time) that is our paycheck. Too often when we make our purchases we want to spend money like we don’t have a need to save. Need a car? Go to the dealership and buy the most car your credit score will allow. Some fashion magazine says that a new look is the new rave and many people make the choice to discard good clothing simply because it might be just a tad out of the latest style. Some of us try to buy diamonds and pearls and other ornamental jewelry like we had Mr. Walker’s taste. And let’s face it, part of the drain on the economy can be squarely contributed to people who bought way too much house for what they needed. It may not have ten bathrooms but too much is too much no matter how you look at it.
It is easy to point the finger of disappointment at Mr. Walker and say something like that would never happen to me. But it happens to many of us more often than what we think. People wake up one day and realize that they’re about to retire and their savings are woefully inadequate if they exist at all. Corporate America has made it easy for us to live beyond our means and we make the choice to take advantage of their low interest wares each and every day.
We don’t have to live like a multi millionaire to end up in the poor house. We can make the same foolish choices right where we are with our four, our five, or if we are so blessed, our six figure salaries. It’s not necessary to live at the very edge of your means. Tamp it down a bit. Live comfortably and save for a comfortable life in the future. That way, none of us will be one of the people sitting around years from now wondering what happened after we’ve spent way more than we should and asking why wasn’t more done to prepare for the time where income isn’t coming in the way it used to.
I once had a girl friend who told me that if I didn’t love her unconditionally she would find somebody who did. That was funny. Our relationship that lasted years was beginning to crumble. The trust and common goals that we once shared had turned into mistrust and personal interest. In a last ditch attempt to set things right my ex made the ultimatum to me. Our relationship was in my hands. She would walk if I didn’t put aside our differences. I wonder what happened to her.
I see the same thing happening at the national political level. Republicans are demanding that President Barack Obama and the rest of the Democratic Party bend to their will or they will not support the stimulus bill. It’s pretty telling who is trying to be bipartisan or not when not even a single Republican congressman voted for the stimulus. Granted the bill is far from perfect. Even a blind man can see that. My personal opinion is that if tax cuts worked so well wouldn’t those tax cuts that favored the rich people so much for the past eight years or so have kept this economic fiasco from happening in the first place?
But I also understand the need for compromise and to make concessions in order to reach a consensus. However, at some point, the other side needs to make a compromise as well and do something to reach back. To think that only one person is responsible for making all the concessions is rather hypocritical.
For years the Republican Party majority that controlled both houses of the Congress stood idly by while former President George Bush ran deficits that have ballooned the national debt from the considerable five trillion dollars when he took office to the ten trillion dollars today. These people, and their Democratic counterparts, were complacent when the economy started to turn and jobs started to evaporate. The foundation of our economy was strong and nothing needed to be done. The stimulus of lower taxes was all that was needed to improve conditions for everyone in America. More trickle down economics.
That was then. Now that we have trickle up pain these politicians have become the model of fiscal responsibility and now want to curb our woes with more tax cuts. I guess the theory is that if we give more tax cuts to people who don’t need them, they will be able to save more money, and sparking more investment in companies that will generate jobs. Investment in what is the question. With the majority of people already strapped to make ends meet now that retirement investments have shriveled up, what’s a good investment that will have economic returns these days, another Ponzi scheme ala Bernard Madoff? Or what will be even harder to find is a good investment that will actually create jobs and not just profits for profits sake.
Giving corporations smaller tax payments doesn’t create jobs, it creates bigger profit margins. Companies don’t hire people based on profit. If that was the case everybody would’ve been working for the petroleum companies that were making a billion dollars a week last year. What creates jobs is a demand for work. Instead of giving a company tax break so they can be more profitable and making the gap between workers and owners even larger, spending money on infrastructure projects that will actually generate jobs seems to be a smarter proposition.
The last round of tax cuts that were passed actually netted me about twenty dollars a week. That might sound like a deal to some but its peanuts compared to the deep pocket guy who netted something like four grand a week. My extra twenty bucks a week won’t put much of a dent for the Peacemaker household. The funny thing is that all things considered the extra four thousand dollars a week wouldn’t make much of a difference in the deep pockets guy’s household either.
But hey, like I said before, when you’re trying to get buy in you’re willing to make concessions. I will be willing to give you this if you will be willing to give me that. That way, we both will have a vested interest in getting something out the door.
However, when one side starts putting up ultimatums and refuses to entertain a compromise because they have gotten so used to having things their way for so long that they’ve forgotten how to give a little, it becomes problematic. A lot of people on one side of the political aisle have promised to be obstructionist in the new age of political bipartisanship. People want to say that they just want what’s best for America after being so negligent for the past eight years or so. Maybe that’s true. But after the majority of America decided to give someone else’s ideas a shot you would thing these people would get with the program.
Instead, all the bipartisanship moves in the world can’t get these obstructionists to budge off their position. The way some of these politicians act you would think that they didn’t get the memo that they don’t control the two political big houses any more. People want things to change and these politicians are promising nothing of the sort. It isn’t that these politicians are not into Mr. Obama or the Democrats or the American people. These people are simply stuck on protecting what remains of their political fortunes.
To make the steps necessary to help the new guy succeed would be like shooting their political philosophy in the foot. At this point, these people have nothing else to loose. Many of them come from political districts that would rather drink Jim Jones’ cyanide laden Kool-aid than vote for anything but Republican political representation. So why not give ultimatums? And even if those hurdles were met there’d be other reasons to stand in the way of political change.
Personally, I can see that this new age of political change isn’t for everyone. Some people just don’t understand the concept of give and take. The idea of compromise means that the other person is responsible for making all the changes. I used to have a girl friend who thought like that. That was a few years ago. If what happened then was any indication, in a few years we might be asking ourselves whatever happened to those guys that gave that political ultimatum.
My partner in life and I are not married but I refer to her as Ms. Peacemaker. My just shy of two years old son I refer to as Baby Peacemaker or Junior Peacemaker. But Ms. Peacemaker has another son who lives with us that I’ll refer to as Young Peacemaker. Young Peacemaker is a teenager. He is an excellent kid but is often confused and has a tendency to not think things through clearly or to listen carefully. Like many typical teenagers these days, he suffers from an inability to understand the world accurately. A senior in high school he will be graduating in a few months. I am afraid that life will hit him harder than what he is prepared for.
Wearing dreadlocks that are just a couple of years old and with no intention to cut them off, Young Peacemaker is fixated on becoming part of a very prestigious, high profile, professional group. For the sake of anonymity I won’t say what his aspiration is. But needless to say it is a profession seriously dominated by white males with a smattering of blacks. Long haired, socially conscious, strongly associated with their ethnicity black people need not apply. But that’s his dream. As much as it breaks my heart to see him shoot for things so far removed from the black community and what appears to be so far outside his ability to achieve or his desire to pursue, it is his life and he has his own decisions to make.
Young Peacemaker reminds me of so many young people who think that they can become what their heart desires with nothing more than a wish. Without exception, everyday I ask him what he has done to reach his dream the answer is nothing or little of nothing. He’s looked up a few schools on the internet. He’s thought of going into the military to get money for schooling. Sometimes he says he has filled out an online employment application or an application for a college. I’ll suggest something. He’ll do it tomorrow. There really doesn’t appear to be much of an overwhelming drive to become the successful professional in his primary career choice that is highly competitive. And because it is a career that is very competitive, companies have their pick of a number of job applicants for these positions. And with the economy going through a painful economic adjustment for the foreseeable future, job prospects will become even slimmer.
My thinking is that Young Peacemaker could work to prepare himself for his dream job. But in the meantime, he should have a real job that will help get him through lean times. I think that’s pretty smart for any teenager these days. Yes it might sound good to shoot for becoming the first black driver in Formula One racing to wear dreadlocks. But maybe some technical training as an automobile mechanic might keep the lights on until he’s discovered by one of those racing teams. It would be great to be part of the construction crew that builds the first skyscraper on the moon. But maybe a job as a plumber might come in handy until that new space shuttle is ferrying construction workers off planet. I don’t want the young man to stop dreaming his dream. I just don’t want him starving while he’s dreaming.
Not many people are going to get the job to just sit around and play video games or piloting the Goodyear blimp. I think Young Peacemaker confuses occupation with hobbies. Although it might appear that a lot of people make money bowling or playing golf or football, for every person playing a sport and getting paid there are millions who don’t see a dime. In fact, they have to pay to play. Yeah it might be nice to live life as a musician or a rap star. But for every person that gets paid to be in front of a microphone millions are disappointed. All one has to do is watch one of those American Idol or Star Search shows. For every person that makes it to the finals, hundreds or thousands of people are rejected. If you got what it takes you can make it. If all you got is a wish and a prayer but little talent or drive, good luck.
It is my dream to see Young Peacemaker make better choices for himself and for the black community that are a lot more realistic and a lot more obtainable. He can be whatever he wants to be if he’s willing to work hard enough to achieve it. He can be whatever he wants to be if he’s willing to do whatever he has to do to get that dream job. But in the meantime, he has to eat. This experience will help both of us out tremendously. I know I’m learning every time I talk to him. Besides, it’s good practice for when Junior Peacemaker gets older.
The New York City-based pharmaceuticals giant Pfizer’s proposed acquisition of Wyeth is a deal valued at sixty eight billion dollars. It is the biggest pharmaceuticals deal in almost a decade. With the looming expiration of its blockbuster statin drug Lipitor, which is solely responsible for about a quarter of Pfizer’s revenue, and with no new drugs through the company’s own development pipeline, Pfizer had to do something big in order to stay relevant in the corporate America.
But while the Pfizer-Wyeth combination will bring biotech assets like Enbrel, a treatment for rheumatoid arthritis, to a company that predominately has marketed chemical based drugs, the acquisition of Wyeth is only a short term fix to a very deep problem within the company and within corporate America in general.
Pfizer hasn’t had a successful drug emerge from its own research and development department in several years and the company’s drought could be attributed to its history of merging to solve its profitability woes. Pfizer became the world’s largest drug company primarily by buying up competitors like Warner-Lambert which gave it access to the drug Lipitor. Without much doubt, one driving factor of this deal will be the immediate boost to Pfizer’s shareholder value. And while Pfizer is preparing to gobble up another competitor, it is planning to reduce its workforce by ten percent. The company has already announced that it will slash eight hundred research positions this year, theoretically cutting excess staff in order to focus on research that has the best chances of being most profitable.
But interestingly enough the fewer dollars devoted for research is more dollars to devote for takeovers or mergers. The more companies like Pfizer cut back on research, the less chance the company has for developing the next Lipitor or Enbrel that could be the next money maker. It is easier, and much more profitable, to sit back on laurels and wait for other companies to do the hard work and take the risk. Money that could’ve gone into research will go into taking over companies with a profitable future. After the company has been assimilated and its intellectual property has been obtained, workers can then be let go in order to keep the new hybrid company as profitable as possible, until the next time this corporate monster needs to feed on lesser companies.
An analogy for this behavior would be the insatiable Necromongers led by the holy half dead Lord Marshal in the movie Chronicles of Riddick, the science fiction sequel to Pitch Black. In the story, the race of Necromongers traveled from star system to star system overrunning worlds and converting its inhabitants into new recruits because Necromongers could not reproduce. And when a world and its resources have been completely consumed, the planet is utterly destroyed leaving nothing behind as evidence that the planet even existed. Necromongers exist for one purpose and one purpose only; to consume.
There’s no benefit to anyone other than the shareholders with a company like Pfizer on the prowl. The company has become virtually unable to produce anything of benefit to humanity other than money. Like most wildly successful companies where petty cash denominations are in the billions, the primary focus is not in the development of a product or a service. The primary focus for most companies these days is profit. When Wyeth is consumed by Pfizer, its primary product will become profit. And when people are on the prowl for nothing but profit for profit’s sake, people have a tendency to become as insatiable as the typical Necromonger, unable to produce anything of true value.
When companies focus on making profit for profits sake, they are subject to let their ability to provide a quality product or service to the public. By going with cheaper materials or hiring cheaper labor a company can save more money to sweeten the compensation paid to shareholders. Eventually, the company that went into business because it figured out a way to build a better mousetrap will turn into the company beholden to a horde of owners looking for nothing but profit.
Pfizer is nothing more than the latest corporate entity to stay afloat by gobbling up its competition. Certain workers will be assimilated, others will be terminated. The company will stay fat until the end of the profitability of its product line. And then, in true Necromonger fashion, it will make a move to snap up smaller, nimbler companies who still believe in providing a service or a product or a better mousetrap to fill a need to somebody. And then that company too will learn to forsake all for the sake of profit.
Despite the climate of national goodwill surrounding Barack Obama as he takes the oath of office, two of the candidates competing to lead the Republican National Committee unleashed harsh attacks against President George Bush’s replacement recently.
Katon Dawson, the chairman of the South Carolina Republican Party, promised to be Mr. Obama’s worst nightmare and said it would be the Republican Party’s mission for the next four years to expose the Democrats for what they want to do to this country. Mr. Dawson defended his tough talk as the duty of a leader for his party. “Whether you’re the chairman of the state party or the national committee, your job is to hold Democrats accountable in every way. That doesn’t mean you have to do it in a mean tone of voice or in a way that doesn’t offer solutions.”
Former Ohio Secretary of State Ken Blackwell, who has positioned himself as one of the most rigidly conservative contenders for the top job within the Republican Party, published a column accusing Mr. Obama’s economic stimulus package of being a liberal Trojan Horse that has serious flaws, some of which convey a partisan advantage. Mr. Blackwell argued that Mr. Obama’s stimulus plan would create government jobs, and government workers have a tendency to vote for the Democratic Party referring to the arrangement as political mischief.
The members of the Republican National Committee will elect a new chairman at the end of the month at their annual winter meeting in Washington, D.C. Mr. Dawson and Mr. Blackwell have four other rivals in the race for the top Republican job; incumbent RNC chairman Mike Duncan, Michigan GOP chairman Saul Anuzis, former Maryland Lieutenant. Governor Michael Steele and former Tennessee GOP chair Chip Saltsman who caught a lot of flack for his distribution of a CD with the song Barack The Magic Negro.
If these people would have only been as half as tough on Mr. Bush during any part of the past eight years the country may not have gotten in the mess it’s in right now. According to Mr. Dawson, top priority for the Republican Party is not to help rebuild America but to become Mr. Obama’s worst nightmare. And according to Mr. Blackwell, it is better for the Republican Party that people stay unemployed and the economy stay flat rather than use the government to generate jobs and try to do something to stimulate the economy out of the doldrums.
Obviously, it is more important to the Republican Party that people pull themselves up by their own bootstrap. The public trough that is better known as the national treasure is not for public consumption but for the consumption of the few. It explains why the Republican controlled federal government would have reservations about helping pull poor black people out of the aftermath of a hurricane. Helping to save the underprivileged would only mean more people likely to vote for the Democratic Party. To these people’s twisted thought patterns, that sounds too much like some kind of political mischief. A dead Democratic voter is much better than a poor one.
The idea of these people actually working in a way that benefits the country doesn’t register. It is far more important to keep Republicans on top. Watching the Obama administration to the country’s economy back on track with government jobs, and then having these people think it’s in their best interest to have a political party in control that appears to be more responsive to their interest.
The Republican Party has already given middle America the middle finger. Middle America responded by giving the Republican Party its middle finger. And with this ongoing escalation of middle fingering the ball is in the RNC’s court, and they don’t look like they’re ready to back down. They are ready to get ugly and keep the wheels of Washington seized up in bureaucratic procedure. Elect me because I’ll make sure nothing gets done is not a very intelligent response to someone who claims to want to work with others to solve problems.
But then what can you expect from people who think bullheadedness is a virtue? What can you expect from people who ran the economy into the ground and stood back yelling nifty slogans like drill baby drill and rhetoric like the foundation of the economy is strong despite the fact that it is pretty obvious that the economy is going down in flames like an incompetent President’s rating in an opinion polls. What can you expect from compassionate conservatism?
It’s been a while since I’ve actually sat down and watched a football game in my living room. Like most things I used to do once upon a time I don’t get the same thrill out of watching a televised football game that I used to. Like most things the game of football is filled with some of the most blatant examples of disparity. Young upstarts fresh out of school getting hundred million dollar contracts to play sixteen games out of the year and shoots him self in the foot with an unregistered pistol or runs a dog fighting business out of his basement on his days off. I watch players dance a jig and showboat into the end zone only to lose the game. If homey could only focus on playing the game with some kind of class instead of dancing like a five year old when something goes their way I might be a tad more willing to invest more of my limited time to watching the sport. But ticket prices approaching triple digits and ten year old stadiums, condemned because of the relative obsolesces compared to the new platinum for stadium construction on the other side of the country with entire rows of escalating seats, has sapped away my love of the game.
One thing about football that really drove me crazy is how after four quarters of play from both teams, the whole game will come down to a single act of whether or not a kicker makes a field goal. The kicker misses the three pointer and he lets his teammates down. If only his foot was stronger or his aim was more accurate the team would have won the game. Monday morning quarterbacks will complain bitterly that the unsuccessful kicker needs to go. How the hell did he miss that fifty eight yarder?
But it takes an entire team to win a football game. If the offensive line doesn’t protect the quarterback the quarterback won’t be able to do his job of searching for the best player to get the ball down the field. If the receivers don’t do their best to get down the field the ball is less likely to go down the field. If the defensive line doesn’t hold the opposing team will be able to score more easily. Everybody helps to win and everybody helps to lose. It is that plain and simple. The entire team wins. The entire team loses.
Last week, the United States Senate, driven by a very Republican effort, failed to pass legislation to help the domestic automobile industry because of the UAW’s refusal to go along with a stipulation that the pay of the domestic autoworkers must be in line with the pay of the foreign autoworkers. The deal collapsed like a house of cards on an especially windy day. And now, the Senators that kept the bill from being passed are given credit, or blame depending on perspective, for the eminent failure of the automobile industry.
Now from what I understand, the domestic automobile industry has been losing ground against its competition for more than three decades. Ever since the first oil embargo of the seventies which led to the first major energy crisis this country had to face, our domestic car company has been losing ground to its foreign competition. It was easy to dismiss the competition back in the day when the big three controlled more than seventy percent of automobile sales. It was business as usual with half assed attempts to offer products that could meet foreign carmaker standards of quality and efficiency. And while foreign carmakers pushed a relentless campaign to improve their products from the ground up with constant regularity whether they were selling well or not, domestic manufacturers sat fat on their laurels, happy to push old iron in new, colorful sheet metal.
But the real poison pill of the domestic car companies was its refusal to prepare for a future where energy costs becomes much more expensive and the profitability of selling inefficient automotive products. While the foreign carmakers began to follow the domestics’ example of offering huge, lumbering trucks and sport utility vehicles, the foreign carmakers never stopped developing their products at the other end of the automobile spectrum. Small cars are king right now and the traditional truck is a has been. Even Hyundai, whose initial products were so dismal they conjured images of a slightly more modern Yugo has learned from its mistakes and is now competing head on with the best from Japan and Europe. Everyone seems to have made significant steps towards improving their stakes in the small car market game. It appears that everyone is taking steps to compete with the exception of Ford, Chrysler, and General Motors. And now that the market is flipped, the domestics are poor competitors in need of a near miracle Hail Mary field goal just to stay in the game.
Whatever their reason, enough Republican lawmakers refused to cooperate and give the domestics that miracle. And now, we’re supposed to believe that these lawmakers are the reason that our automobile industry is about to bite the dust. But the lawmakers, like the field goal kicker, should have never been put in the situation of being the only hope for the entire team. Hail Mary’s seldom work in football. It is the last gasp strategy of a desperate team incapable of winning the game with sound fundamentals.
If I worked for just one year with an annual salary that comfortably ran into the eight digits range, I would have no problem working for one year for an official salary of one dollar. You know what? If I had a salary in the seven digits I would be more than happy to work for the rest of my life with an annual salary of a happy meal. If I made what the CEOs of these domestic automakers made last year, you wouldn’t have to worry about paying me jack ever again no matter what kind of tricks and hoops I jump through.
According to an article published by Anne Szustek, the executive compensation research firm Equilar reported that Mr. Alan Mulally, the CEO of Ford Motor Company, pulled down an annual salary well over twenty two million dollars in 2007. Mr. Mulally wants to show his sincerity for the welfare of his failing automobile company by volunteering to get only one dollar of compensation in the future until his company can turn things around and become profitable. But even with an official dollar salary, Mr. Mulally will continue to earn stock options, retirement benefits, and other forms of compensation that more than makeup for a dollar salary. And even if he did get one dollar and none of the other perks, the man made twenty two million dollars in a year where Ford lost billions.
The CEOs of General Motors and Chrysler are no different. According to Equilar, Rick Wagner’s of GM’s total 2007 compensation package ran just short of sixteen million dollars. Chrysler is privately held company and is not publicly traded so its numbers are not open to public scrutiny. But it’s a fair bet that Mr. Nardelli, who like the rest of his automobile manufacturing CEO buddies who fly around in private jets to ask our politicians for billions in bailout funds, is not hurting financially.
Now somebody with just the slightest cursory glance of what’s happening suggested that the automobile workers get a dollar wage like their CEO bosses. And while such a stupid idea might sound totally rosy to most of the dimwitted, it really is unfair to expect someone who barely made enough to cover the living expenses of his or her family last year to compete with someone who earned tens of millions of dollars last year in compensation and probably has more than enough in savings and investments to tie him or her over for a few years or the rest of their lives even.
However, late last week, the bailout package that the Congress was putting together to keep Chrysler and General Motors afloat crashed and burned like a fully fueled Hummer H2 hitting a Ford Excursion head on. The sticking point that refused to be compromised away was a refusal from the United Auto Workers that they would earn a wage on par with the nonunion shops run by the foreign automobile makers. Although there is plenty evidence to show that the compensation between a union worker and a nonunion worker is small, the UAW does not want their compensation tied to the nonunion shops. The UAW sees a future where the domestics will return to profitability and want a piece of that future pie. The UAW feels that its members have given up enough and is drawing a line in the sand that they will not cross. In other words, they are going to call someone’s bluff.
All the more reason the public treasury should stay out of this deal with devils. On the one hand you have executives working for a dollar and yet still able to earn multimillion dollar salaries and on the other hand you have workers who feel like they have sacrificed enough and don’t want to sacrifice any more. The idea of being paid the same salary as people in nonunion shops would actually defeat the purpose of being in a union. The unions must protect its turf at all cost. Not even the cost of driving the employers of all their members into bankruptcy is too high a price for the union to pay. And all the factory employees want is to work at the expense of the other car factories. Don’t shut us down, shut them down!
There is no unity here. Like vultures you have separate groups with separate goals trying to come to an agreement on how to divide a dead carcass. Although these car companies may have some kind of vision of future automotive products, their plan to put those products into place does not include cooperation between each other. Why should the public trust the car company to work with our public funds when the car company doesn’t even work well with itself? Until there is more cooperation, until there is more of a sense for sacrifice, the public should stay out.
The other day I was sitting at my desk overhearing a conversation between a couple of coworkers. One person was making a comment about being thankful that he didn’t own any General Motors stock. The other coworker started getting philosophical. He said that over the past few weeks, months even, trillions and trillions of dollars have evaporated from the economy. Where did all that money go? It wasn’t destroyed. Nobody took it out into the backyard and set fire to it. Where did all that money evaporate to and what do we have to do to condense it back?
I thought about what the guy was saying and my immediate thought that I kept to myself was, what makes you think that the trillions of dollars were there in the first place? The evolution of currency has gotten to a point that we actually value something that doesn’t even exist.
The natural way of exchanging value is the barter system. I trade something of value to you and you trade something of equal value to me. If I raised chickens I might trade a few to the guy that grows wheat or the woman that makes clothing depending on what my needs were. Not quite a convenient way of exchange. How many people would be willing to walk around with a few chickens in their pocket? But I could exchange my chickens for gold coins or silver or something else of value and use that valuable metal to buy whatever I wanted whenever I wanted.
But while coins may be better than carrying chickens it isn’t really all that convenient because it weighs a ton. So instead of carrying around metal to exchange for goods I could carry around a piece of paper that said I had access to X amount of whatever precious metal. Paper money is even more convenient. But paper money tied to only so much gold and silver is rather limited. In order to create more wealth, one would have to drive up the price of precious metal or find some more. Not all that convenient.
Take that paper money off of the gold standard and tying it to something of intangible value, like the gross domestic product of an entire country’s worth, and the sky can literally become the limit. Now, the government can print money and create value where none existed before. A house that used to sell for twenty thousand dollars a few decades ago is now worth a million dollars because there’s so much printed money floating around that really has no value other than what somebody somewhere says it does.
If I drew a doodle on a napkin and tried to sell it on ebay as a Brother Peacemaker original I would be surprised if I got fifty cents for it. But the other day I heard that a doodle from the President-elect sold for six figures. Why? Obviously somebody felt that it had that much value that they were willing to pay six figures for it. But what is that doodled napkin really worth? Somebody might say that the soon to be President created wealth with his impromptu artwork. But a few minutes of chicken scratch, it wasn’t all that great at all, does not make for collectible art status unless a buyer and a seller agrees that it does.
By printing money and giving everybody so much of it to spend, our government has given people the impression that our purchasing power is constantly growing and getting stronger when nothing could be further from the truth. The average annual income back in the day was a few thousand dollars. Now, the average annual income is a factor of twenty over that. Not a problem! Just inflate the cost of everything. Need a raise? Not a problem! Here’s a two percent raise while the cost of living goes up forty percent!
And the economy is bringing this fact into tangible terms right before our very eyes. House prices, like so many goods recently, have been reevaluated and put in their proper perspective. Some people have been slapped awake by the sudden realization of their true worth in the marketplace. The value that they thought they had in their home, in their job, in their savings, in their investments, etcetera, turned out to be little more than a sophisticated scam of bait and switch.
Trillions of dollars haven’t evaporated. They were never there in the first place. The only thing we have to say how much we are worth sits on a giant database on a giant computer somewhere. It is nothing but a series of numbers represented by bits and bytes on a magnetic disk platter. There is nothing tangible about it. And when the computer says the house you bought yesterday for X amount of dollars is only worth half of X you have no choice but to sit back and obey when someone tells you that your worth has evaporated. But in all honesty you were never worth all that in the first place.