The Passion of Tom Friedman
The New York Times’s Tom Friedman is getting a lot of mileage out of yesterday’s column on Detroit’s desire for a bailout. Here, on CNBC this morning, he gets into a fine rant on the subject (from 3:30 to the end) but it’s worth watching the earlier tirade on Bush’s foreign policy just to see Friedman in his new operatic mode. Friedman’s usual cuddly, quizzical tone has changed and Vanity Fair suggests the thought leader is cranky over losses closer to home.
As many peope know, Friedman is married to a mall developer’s daughter. General Growth Properties, the family business, has imploded as the company faces problems rolling over $1 billion in debt. If it can’t refinance, GGP might get pushed into bankruptcy.
Of course, none of this changes the fact that Friedman is right about the Michigan Congressional delegation and the way it has blocked government from creating an economic landscape that would have helped the auto makers thrive. “[I]nstead of focusing on making money by innovating around fuel efficiency, productivity and design, G.M. threw way too much energy into lobbying and maneuvering to protect its gas guzzlers,” Friedman wrote in his column.
He also brought in the big guns in the form of Paul Ingrassia, The Wall Street Journal’s one-time Detroit bureau chief and still an expert on the industry. In Ingrassia’s own op-ed on Monday, he wrote these words that Friedman seconded:
In return for any direct government aid, the board and the management should go. Shareholders should lose their paltry remaining equity. And a government-appointed receiver — someone hard-nosed and nonpolitical — should have broad power to revamp GM with a viable business plan and return it to a private operation as soon as possible. That will mean tearing up existing contracts with unions, dealers and suppliers, closing some operations and selling others, and downsizing the company. After all that, the company can float new shares, with taxpayers getting some of the benefits. The same basic rules should apply to Ford and Chrysler.
The letters in response to that Op-Ed are in today’s Journal and worth reading. Nonetheless, the tide seems to be running against bailing out Detroit. The management of the automakers may not be any better than the managers of the banks. But they have been a lot worse for a lot longer.
November 13th, 2008 at 1:17 pm
All the companies that are broke need to go BK. The media that no one will buy a car from a bankrupt auto maker is BS.
November 13th, 2008 at 1:18 pm
I think they drew the line in the sand. I would buy heavy here if you have been waiting.
November 13th, 2008 at 1:29 pm
Okay I leveraged up anyway. What the hell. If we go down in flames I wouldn’t have a job anyway.
November 13th, 2008 at 2:02 pm
Way to go Tom!
Look we are going to get tax increases that seems clear it is high time we we raise it via fuel taxes!
Everyone knows you get more of what you subsidize and less of what you tax.
We need to tax Income less and start taxing fuel more!
We need higher take home income this country and we must stop giving money who those who hate us.
Revenue neutral would be nice but who cares any more lets just get it done!
Lower the income tax and raise the fuel tax!
mileage standards would take care of themselves
November 13th, 2008 at 2:18 pm
As fuel tax would be as regressive or more so than a national sales tax, there would need to be rebates to lower income brackets who would be the last to move into fuel efficient vehicles as those cars become available in the used car market.
November 13th, 2008 at 2:35 pm
I don’t care how you do it the dems have control I am sure they will be “fair” to the little guy just get it done.
Give everyone under 40K a hybrid! (kidding) I don’t care how just get it done.
America needs more take home pay less, fuel consumption. Stop sending money to people who hate us!
November 13th, 2008 at 2:42 pm
@oldman
Not disagreeing, in fact I completely agree, just qualifying.
Imagine if an indexed fuel tax had been instituted back when Carter first proposed his energy policy.
November 13th, 2008 at 3:08 pm
That was eazy!
Now all we need is Congress and the White House
unfortunately they are probably bought and paid for by….
time will tell
November 13th, 2008 at 4:39 pm
I haven’t watched the video, but I did see Freidman on MSNBC last night. He was calling for the ouster of top management, but I don’t think he even mentioned the UAW.
IMO, even a semi-competent management team could bring GM back to profitability if the UAW would make significant concessions. (Not that they’ll have to, since they’ve got Obama wrapped around their collective finger).
November 13th, 2008 at 4:48 pm
If GM stock is still in the toilet on January 16th, 2009, I really think that at that point it will pay to take a position in the stock (on the long side).
It’s just unthinkable to be that Obama will refuse to bail them out.
November 14th, 2008 at 12:20 am
LOL GGP owns my local mall (Christiana Mall in DE), and they’re still going gangbusters, though the fact that it’s tax-free shopping in a 3-state nexus probably helps a bit, especially with cheaper gas..
November 14th, 2008 at 1:09 am
Beautiful art, but it looks like you’re outsourcing content. That’s cool. You’re becoming a portal. But I want all Barry, all the time.
November 14th, 2008 at 10:18 am
I’m not sure that I agree with your last comment. The managers of the banks have clearly been just as irresponsible and reckless as that of the auto manufacturers, and let’s not forget that they were instrumental in causing this financial debacle. These guys suspended all judgement in their orgy of greed, and I’d comfortably argue that their villainy far exceeds the short-sighted incompetence of the guys running the big three. Having said all that, the ‘bailout ‘ will first and foremost end up benefitting the very institutions and individuals which were instrumental in causing the collapse; this is an inevitable consequence of placing guys like Paulson in charge.