Kill GM to save US industrial infrastructure

By Michael Fraase

Wednesday, 03 June 2009 07:07PM CDT

Section: Sustainability

Stacked trolleys“Who among us wants US$50 billion of our tax dollars thrown down the rat hole of still trying to save GM?” That’s the question asked by Michael Moore, writing for the Daily Beast, in a remarkably cogent article outlining what to do with General Motors.

In short, Moore recommends killing GM with utmost swiftness while making it a top priority to save the US industrial infrastructure. “And when we realize that the best way to transport ourselves is on light rail and bullet trains and cleaner buses, how will we do this if we’ve allowed our industrial capacity and its skilled workforce to disappear,” Moore writes. The solution isn’t a smaller GM; it’s a totally different GM.

Moore’s solution is to rapidly retool the former automaker and its remaining factories into modern manufacturing facilities used to build mass-transit vehicles and alternative-energy infrastructure. It’s already been done once and can certainly be done again: In 1942, after the attack on Pearl Harbor, Roosevelt ordered GM to stop car production and start making planes, tanks, and other implements of war. GM completely retooled its factories in a matter of months.

Instead of pouring money into GM to build cars, instead use the money to keep the skilled workers primed and ready, “so that they can build the new modes of 21st-century transportation,” Moore writes. Let them start by retooling the existing GM factories.

There’s not only deep justice, but something deeply right about retrofitting GM to manufacture some of the modes of transport it worked so hard to obviate.

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The university tuition dilemma

By Michael Fraase

Thursday, 04 December 2008 08:00PM CDT

Section: Sustainability

TuitionThe most recent biennial report, “Measuring Up 2008,” from the National Center for Public Policy and Higher Education finds that total college costs (tuition, fees, room and board, minus financial aid) increased a whopping 439% from 1982-2007. Meanwhile, median family income rose only 147%. College students have been forced to borrow twice as much over the last ten years and poor students get smaller grants than students who are more well off.

According to Patrick Callan, president of the center, the American middle class has been financing their kids’ education through debt. “The scenario has been that families that have a history of sending kids to college will do whatever it takes,” Callan tells the New York Times. “Even if that means a huge amount of debt.”

Last year, net college costs at a public university accounted for 28% of the median family income. Net costs at a private university were predictably higher: 76% of the median family income. Meanwhile most universities are talking about even more tuition increases. Clearly, this is unsustainable.

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Capitalism doesn’t scale

By Michael Fraase

Sunday, 21 September 2008 09:17PM CDT

Section: Sustainability

CapitalismThe largest wealth redistribution plan in US history—a plan to transfer massive amounts of wealth from the middle class to the super-rich and massive amounts of power to the executive branch—is apparently garnering bipartisan support in the US Congress. The Bush administration has proposed raising the national debt ceiling to US11.3 trillion and letting the Treasury Department purchase up to US$700 billion in “toxic” mortgage-related assets without oversight or regulation.

The only restriction placed on Treasury Secretary Henry Paulson would be semiannual reports to Congress. Any reforms, according to Paulson, should come after the financial system is stabilized. Here’s the key bit:

“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”

Should Paulson spend the entire US$700 billion, it amounts to more than US$2,000 for every American citizen, more than the Pentagon’s annual budget, and about the equivalent as the direct costs of the Iraq occupation. And it appears to be a revolving credit line.

Representative Barney Frank (D-Massachusetts) told the New York Times of interest in limiting the compensation of executives of firms seeking aid under the plan: “There are going to be federal tax dollars buying up some of the bad paper. They should accept some compensation guidelines, particularly to get rid of the perverse incentives where it’s ‘heads I win, tails I break even.’” The Bush administration has been adamant that any compensation restrictions are off the table.

As for not regulating executive compensation, consider the following:

 

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