GOP's Bailout "Action Alert" that Killed the Bill: Countdown Obtains the Memo

by Teh Nutroots |  As Keith Olbermann's blog notes, the memo---which I've quoted below-- explains the "strategy," such as it was, behind the decision to kill the bailout bill.  When even Dick Cheney is (allegedly) telling you your strategy is going to make you look like a Dick you probably ought to to take a step back and reflect whether you've chosen the best time to wave the ideological banner.

Certainly, the memo shows just how much Republicans don't give a rat's arse about blue collar types who negotiate for a somewhat less hand-to-mouth existence----as opposed, say, to executives who skim millions in bonuses and so forth right off the top. Buck Naked Politics' Deb Cupples explained a few days ago just how distorted have been the representations of the huge amount of money being taken home by UAW workers. She writes:

To its credit, the New York Times ran a piece yesterday, admitting that the $70+ per hour figure is wrong:

"Seventy-three dollars an hour.  

"That figure — repeated on television and in newspapers as the average pay of a Big Three autoworker — has become a big symbol in the fight over what should happen to Detroit. To critics, it is a neat encapsulation of everything that’s wrong with bloated car companies and their entitled workers.

"To the Big Three’s defenders, meanwhile, the number has become proof positive that autoworkers are being unfairly blamed for Detroit’s decline. 'We’ve heard this garbage about 73 bucks an hour,' Senator Bob Casey, a Pennsylvania Democrat, said last week. “It’s a total lie. I think some people have perpetrated that deliberately, in a calculated way, to mislead the American people about what we’re doing here.”

"So what is the reality behind the number? Detroit’s defenders are right that the number is basically wrong. Big Three workers aren’t making anything close to $73 an hour (which would translate to about $150,000 a year)." (New York Times)

Deb already pointed out that the average line worker makes only about $28 an hour (or $56,000 per year).   I don't think many people would try to argue that $56,000 is too much for a family with a couple of kids, a mortgage, and the usual needs of a typical American family. Bill Kav noted:

Several Senators have used a figure of $73 per hour to describe UAW labor rates. The actual UAW rates vary, from $14 per hour for new workers at the Big Three to $33 per hour for skilled trades workers.  The Republican $73 per hour figure includes not only adding in benefits, but also adding a hefty additional total of ALL current retirees benefits from contracts of years gone by, divided by the number of current workers (a much smaller workforce).  Somehow, this figure made it seem as if current workers were rolling in clover at a huge hourly salary— which none of them are actually drawing. 

In stark contrast:

[E]xecutives have been redistributing shareholder wealth to themselves -- while the company headed toward a cliff -- and the executive-friendly board allowed them to do it.

For example, General Motors CEO Rick Wagoner's 2007 pay ($14 million) breaks down to $7,000 per hour (based on a 2000-hour year).  Yes, you read that correctly -- and that was a year that GM had $38 billion in losses.

If the average autoworker makes $28 per hour, then Mr. Wagoner's hourly pay could have instead paid 250 average GM workers -- people directly involved in making products that make money for GM shareholders.

Ford CEO Alan Mulally's 2007 pay was $21 million, which amounts to $10,500 per hour.  A year earlier, Ford had record losses of $12 billion.  Mr. Mulally's hourly pay could have instead paid 375 average Ford workers. 

It doesn't stop with CEOs.  Four of Ford's vice presidents were paid $39 million in 2007, an average of $9.75 million each or $4,875 per hour.  The total hourly pay of all four execs combined could have instead paid 696 average autoworkers.

I don't have access to compensation data for the dozens -- or hundreds --  of other execs at GM and Ford... (BN-Pol)

But wait!  There's more:

In 2007, GM's CEO Rick Wagoner got a 41% raise (to about $14 million) -- during a year that GM had record losses of about $38 billion. While Mr. Wagoner (and possibly hundreds of other execs and managers) were rewarded with pay raises, the executives laid off a couple thousand workers.

In 2006, Ford had record losses of more than $12 billion.  Yet, the company gave its then-new CEO Alan Mulally $28 million for his first four months on the job. Mr. Mulally's total 2007 compensation was about $21 million.  Four of Ford's executive vice presidents that year collectively took home about $39 million.

In short, just five Ford execs pocketed $60 million after a year of record losses (I don't know how much the hundreds of lower execs and managers pocketed).  (BN-Pol).

And she concludes:

When you multiply such expenses by dozens (perhaps hundreds) of execs and managers -- when you add up the expenses year in and year out -- we're talking about serious money that could, instead, be used to save or create non-managerial jobs, which are essential to producing real wealth for automakers.

I find it interesting -- in a most distasteful way -- that some of our nation's media seem to be blaming the auto industry's problems on non-managerial workers instead of on the folks who make company decisions and seemed to have found legal ways to loot said companies. (BN-Pol)

So take all that as background when you read this memo so thoughtfully provided at Olbermann's website:

Today at noon, Senators Ensign, Shelby, Coburn and DeMint will hold a press conference in the Senate Radio/TV Gallery.  They would appreciate our support through messaging and attending the press conference, if possible.  The message they want us to deliver is:

This is the democrats first opportunity to payoff organized labor after the election.  This is a precursor to card check and other items.  Republicans should stand firm and take their first shot against organized labor, instead of taking their first blow from it.  (Countdown)

I like the way this is framed, don't you?  It's all about one-upping the Dems and putting the ol' Size 15 Guccis down on the collective necks of the working class joes and janes who have managed to gain enough clout to make enough to provide for their families (provided the families don't want all that damn much).

Bill Kav's post here explains why the Republicans are so anxious to be seen doing this.  "It’s worth remembering that none of the current talk about cutting wages for workers was brought up during the bank bailout debate.  The real issue  for rescue critics seems to be whether an industry’s workers are unionized or not," he notes.

John Cole has a graph and what we'd call a crucial question.

Assume that the graph here is accurate, and the majority of the difference between what foreign auto companies pay for labor is the costs of retiree benefits....who does everyone think is going to pay for these retiree’s health care if the auto companies go under or the unions throw them under the bus and give up on their benefits? And you can’t just say the pensioners, because as far as they are concerned, they already DID pay for their future health care costs when they took lower wages for thirty years in exchange for benefits.

It's all about the politics, and the posturing, and the wish to relegate their hand-outs to large corporations, and never, never EVER about doing what's good for the people or the economy generally, such as SAVING JOBS.

This rush to judgment is the same thing that happened with the TARP.  Members did not have an opportunity to read or digest the legislation and therefore could not understand the consequences of it.  We should not rush to pass this because Detroit says the sky is falling...(Countdown).

Except of course that the sky IS falling.  Paul Krugman, writing generally about the economy and not specifically about the bailout, said on Dec. 11:

Another day, another terrifying economic report, this time on unemployment claims.

So are we now losing jobs at the rate of 600,000 a month? 700,000? If fiscal expansion takes, say, 8 months to kick in (and that’s optimistic), where will that leave us?

Morons.   I mean, when Dick Cheney tells you it's about to be "Herbert Hoover time," you probably really ought to listen.    

They DID get TARP wrong and there STILL aren't any meaningful controls in place to keep that money from being frittered merrily away, which is what is happening.  Meanwhile all they've learned is to rush to judgment again, in the wrong direction. 

Yesterday, Hale Bonddad Stewart wrote:

This is without a doubt one of the most insane gambits possible...And yet, at a time when the US economy cannot withstand another shock the Republicans have decided that is exactly what they want to do. Instead of helping Detroit out the Republicans have decided to screw the country in the name of ideology....

As I mentioned above the situation is pretty simple: the US economy cannot take the shock of a GM and/or Chrysler bankruptcy. It's just not in the cards. And yet, that's exactly what these idiots are proposing because in their esteemed judgment that's what is best for these companies and the country. Remind me again why people think Republicans are good with economics?

But you don't have to believe that the auto-industry bailout will actually work to see what's going on here.  John Cole says:

You do have to be crazy....pretend that somehow any principles are at stake other than union busting, which, I guess, is a principle in and of itself....Mitch McConnell and the Republicans (a more complete list here) who all voted against this bill but for the financial bailout will all earn 160k and the best benefits package in the country, but are going to let an entire industry die because some autoworkers make more money than Bob Corker thinks they should. You might call that class warfare. I don’t like the idea of bailouts any more than anyone else, but now is not a time for misguided “principles.”...

I don’t want to hear it about the $15 billion dollars and your principles. I just don’t. Especially when the chain reaction to suppliers and dealerships and what not could have a devastating impact on an already battered and beaten economy. A couple weeks ago someone in the comments asked- If you were told terrorists were going to attack our economy and we could lose 2 million jobs, but you could possibly stop it by spending 15 billion dollars on a new system of defense, do you think the government would?

I think I know the answer to that. But I am not a crazy Republican Senator from the new confederacy.

Memeorandum has a blogger round-up.

RELATED BUCK NAKED POLITICS POSTINGS

Senate Republicans Kill Detroit Rescue [12-12-08]

Senate Republicans Object to Auto Industry Loans, Seek to Beat Down Unions [Updated]  [12-12-08]

UAW to Make Concessions: What About Obscenely Paid Executives?   [12-04-08]

Beggars Can be Choosers:  Auto-Industry Execs Use Private Planes [11-20-08]

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