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Go Home Why I Support Occupy Wall Street

POLITICS OCTOBER 17, 2011

Why I Support Occupy Wall Street

BY PAUL BERMAN

This article is a contribution to ‘Liberalism and Occupy Wall Street,’ A TNR Symposium.

Oh, the editors of The New Republic should calm down. Occupy Wall Street is pure Americana. It is the Human Be-In of San Francisco in 1967. It is the Central Park Be-In. It is a hippie extravaganza. It is the transcendentalist scene at Concord, Massachusetts, in the 1840s, or the Chardon Street Convention of 1840, in Boston. Emerson described Chardon Street, and no one will fail to recognize the atmosphere:

The singularity and latitude of the summons drew together, from all parts of New England and also from the Middle States, men of every shade of opinion from the straitest orthodoxy to the wildest heresy, and many persons whose church was a church of one member only. A great variety of dialect and of costume was noticed; a great deal of confusion, eccentricity, and freak appeared, as well as of zeal and enthusiasm. If the assembly was disorderly, it was picturesque. Madmen, madwomen, men with beards, Dunkers, Muggletonians, Come-outers, Groaners, Agrarians, Seventh-day-Baptists, Quakers, Abolitionists, Calvinists, Unitarians and Philosophers, all came successively to the top, and seized their moment, if not their hour, wherein to chide, or pray, or preach, or protest.

Has Slavoj Zizek given a speech at Occupy Wall Street? So have many others. The Chardon Street Muggletonians were a seventeenth-century dissenting sect who had lived on to 1840, and they had their oddities. But the Chardon Street abolitionists—hey, those people were right.

And something is right at Occupy Wall Street. It is a carnival which is also more than a carnival. The demonstrators are chiding, and some of them are praying (religious Jews were observing Sukkot when I happened to pass by), and some are preaching, and everyone is protesting. Some of the participants are more modest and circumspect than may be supposed. I asked an Occupy Wall Street medic about the anarcho-syndicalist iconography of the medics’ Red-and-Black Cross station, and her answers were wonderfully lucid. I am sorry that I failed to take down her name, but I am glad to report what she said. She told me that, in her group of medics, the participants knew very well that red and black were the colors of the anarcho-syndicalists from the Spanish Civil War. And the colors seemed to her appropriate. The simple color red, she explained, might be problematic. The Occupy Wall Street medics are not the Red Cross, after all. Also, the color red might suggest communism, and the medics were not communists.

The anarchism of the Spanish Civil War appealed to her though. It was because the demonstrations themselves are organized anarchistically, without much structure and without hierarchy. My medic-informant nonetheless expressed satisfaction that Spain’s anarcho-syndicalism of the past is a movement whose day came and went long ago. A gesture to the anarchists of yore did not signify anarcho-syndicalist fantasies in the present. She understood the playfulness at Occupy Wall Street, and this seemed to me splendid in every respect.

Yes, yes, at Occupy Wall Street the madmen, the madwomen, the Groaners and the neo-Muggletonians will eventually have their day, and the movement will be ruined. Already the Maoists of the Revolutionary Communist Party are at work, together with Ron-Paul-ists, according to another of my informants. Visiting the demonstration on Thursday I noticed that the Workers World Party (which secretly controlled some of the big anti-Iraq War demonstrations, in the name of advancing the cause of North Korea) was already in evidence. The costumed neo-hippies and neo-anarchists will prove to be no match to the fanatics of Leninist discipline. Sooner or later the screw-ball groupuscules will wreck the whole thing. “Creative destruction” is originally Bakunin’s phrase, but the destructiveness of the Revolutionary Communist Party will not be creative. So the movement will stumble and fall, and a lot of young people will feel a little embittered and distraught.

But not every movement or street manifestation has to be what the wooden-head Leninists call a “pre-party formation.” The Tea Party is a pre-party formation. Occupy Wall Street is not, even if some people imagine otherwise. Occupy Wall Street is a festival. It is declaiming truth, and this is good. Wall Street has led the country and the world over a cliff. Somebody needs to say so. The damnable conga-drummers in the downtown streets have appointed themselves to say so. The drumming is not too articulate, but the job of festivals is not to be articulate. (It is the job of magazines to be articulate.)

Anyway, the demonstrations, in their anarchist spirit, leave room for other people, more sensible or more sophisticated or, at least, more elderly, to put the protests in a properly institutional form. Last week I marched with the trade unions in support of Occupy Wall Street. The unions may not always be right, but they were not in fantasy’s grip. They were expressing the grievances of people with ordinary jobs, which is, in fact, the right thing to do. My particular delegation was the Jewish Labor Committee. The New Republic editorial worries about a danger to liberalism. The Jewish Labor Committee poses not the slightest danger to liberalism. On the contrary!

So there is much that is good in Occupy Wall Street. Not every merry and angry rebellion is a fearful event. And when the festival has reached its end, and the time has come to shrug and turn away, perhaps because the Muggletonians or the Maoists have conspired to seize power in the demonstration’s general assembly, or because men with beards are delivering Castro-like orations, or some other such headache is taking place—well, no one with a sense of the past will be surprised.

That day will come. But not yet! Meanwhile there are realities to proclaim and feelings to vent. Occupy Wall Street and its sleeping-bag neo-hippies and its costumed street thespians and the touchingly hand-written placards and generally the display of eccentricity and impudence have focused America’s attention for a fleeting moment on economic wrongs and inequalities. How wonderful!

Paul Berman is a contributing editor for The New Republic.

SHARE YOUR THOUGHTS

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98 comments

This is the saddest report on OWS I have read thus far: "So there is much that is good in Occupy Wall Street. Not every merry and angry rebellion is a fearful event. And when the festival has reached its end, and the time has come to shrug and turn away, perhaps because the Muggletonians or the Maoists have conspired to seize power in the demonstration’s general assembly, or because men with beards are delivering Castro-like orations, or some other such head-ache is taking place—well, no one with a sense of the past will be surprised." It's a big party till the Maoists take over. Long live Bakhtinian Carnival, a merry but brief period of time. Problem is that we will still have the economic and political problems and a lot less hope.

- arnon

October 17, 2011 at 12:13am

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So, what do you propose as an alternative, arnon?

- AaronW

October 17, 2011 at 12:33am

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In the main, people aren't participating to "express themselves" in what is solely an abstract form. I think they are aggrieved and they hope that doing something public goads politicians to change directions in response to the warning flare. It probably won't work so simply, but if Occupy Wall Street organized phone sit-ins where they could get many people to call in sequence to gripe really angrily to their Congressmen, if these were mainly Republicans, and if they added some ground action from places like university towns, then you could scare the Republican Party into doing stuff.

- chaitless

October 17, 2011 at 12:45am

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I think they should move the protest/fair/show to D.C. That's where the action is. OWS won't get very far trying to embarrass Wall Street financiers. Those guys don't give a shit what the public thinks of them. If they did, they wouldn't be in the business in the first place. Politicians on the other hand...

- AaronW

October 17, 2011 at 1:04am

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Lovely piece; Arnon still disgruntled! Arnon, what is your suggestion? People should just sit at home and fester? Quietly submit? Let the FOXnikim and the Limbaughs and the Bachmanns grab ALL the publicity? I don't get it. I don't see why people should just sit quietly in the corner.

- Sophia

October 17, 2011 at 3:16am

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AaronW, on the other hand, has an IDEA. The politicians, ultimately, do bear responsibility because it's too late to change what has already happened on the financial front; meanwhile, Nero is fiddling. And no I don't mean Obama; I mean the Republicans (and a couple of Dems who should go soak their heads). And, I like this piece by Fallows, who notes that the WaPo is sounding like the Onion, with the False Equivalence: http://www.theatlantic.com/politics/archive/2011/10/false-equivalence-reaches-onionesque-heights-but-in-a-real-paper/246754/

- Sophia

October 17, 2011 at 3:20am

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Sophia “Arnon, what is your suggestion? People should just sit at home and fester?” Home fester? Is that what you do “at home?” I said on many occasions what the demonstrators should do. If you like Aaron, don’t read or choose not to remember what I say, then there is no sense in my repeating it here.

- arnon

October 17, 2011 at 8:16am

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It's a poor workman who blames his tools, arnon. If your words have failed to convey your vision, blame your writing, not your readers.

- AaronW

October 17, 2011 at 8:25am

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Bullshit, Aaron. Truth is that you Sophia and a few others don't won't t hear any criticism of your beloved OWS demonstrators. That's your problem.

- arnon

October 17, 2011 at 8:37am

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Great piece. Thank you especially Mr. Berman for sidestepping the worn out media memes of who is participating in these protests. The range is much broader than reported so far and your efforts are much appreciated.

- WandreyCer

October 17, 2011 at 8:38am

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"Human grandeur," said Pangloss, "is very dangerous..." "Excellently observed," answered Candide; "but let us cultivate our garden."

- skahn

October 17, 2011 at 8:53am

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"The protesters should oppose the destruction of New Deal policies." Okay. I could live with that plank in the platform. But is the fact that the protesters who are actually in the streets carrying placards don't articulate the problem in precisely the same way as you or share your historical perspective a reason to write them off? You'll probably come back with, "I didn't write them off. Where did I say that I'd written them off? You persist in attributing opinions to me that I don't hold." To which I would reply that you should go back and read your own posts over the past several days. At every opportunity you've been first in with the no-they-can't pessimism. To you the protesters are either ineffectual hippie "camping enthusiasts" or crypto-Stalinists. And of the ones who are camped out semi-permanently in Zuccotti park, many are likely to be part of one sort of fringe element or another. This is only to be expected. People with jobs and families can't squat for days on end, and most people without jobs can't do it either--they have to put in an appearance at the unemployment office and they still have to look after their loved-ones. But none of it means that such more mainstream folks don't support the protests. Just look at all the union groups that have been marching in solidarity with them. As chaitless wrote in the companion thread to this one, unless OWS gets out of the park and starts drumming up meetings in people's living rooms, it won't amount to much. Chaitless is no doubt correct. But your reflexive grumpiness and excessive skepticism is premature. Will Occupy Wall Street achieve anything like the political potency of the Tea Party? Who knows? I'd go as far as to say the odds are against it. But the odds are definitely not zero, as by contrast the odds of OWS turning into a significant and dangerous anti-democratic movement almost certainly are. I can't see any reason at this early stage other than an unhealthy aversion to risk for a person who believes as I do (and as you too believe, I suspect) not to do everything he can to see that the movement does not fizzle out or veer off the rails and instead builds steadily into a potent force capable of stalling the Democratic Party's steady rightward drift and making some headway against the policies and practices that have shackled our government to moneyed interests and have enabled the rich and powerful to subvert the people's ability to advance the people's own best interests through representative democracy.

- AaronW

October 17, 2011 at 8:55am

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Does anyone besides me ever stop and think, "How amazing it is that the universe exists, that our earth exists, that we are alive and aware that we are alive (even if only briefly), and aware of being alive?" We don't know where the universe came from. We don't know how life arose. There is no evidence for the existence of the being we call "God." But here we are. I have a garden (as Voltaire suggested) and I have chickens, and they provide us with very healthful eggs, and in a little while I will go tend to them. Occupy Wall Street is fine and good, but people at my gym suggested the local protestors/occupiers (Seattle), head out to Wenatchee in Eastern Washington and pick apples, which are about to rot on the trees.

- skahn

October 17, 2011 at 8:59am

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"Occupy Wall Street is fine and good, but people at my gym suggested the local protestors/occupiers (Seattle), head out to Wenatchee in Eastern Washington and pick apples, which are about to rot on the trees." Was anybody going to pay them?

- AaronW

October 17, 2011 at 9:01am

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"Protesters Debate What Demands, if Any, to Make" http://www.nytimes.com/2011/10/17/nyregion/occupy-wall-street-trying-to-settle-on-demands.html?pagewanted=print Well, at least they are talking about it.

- arnon

October 17, 2011 at 9:13am

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AaronW, your comment is a pertinent one. There is considerable conflict about the amount of money being offered by growers to pickers, not to mention issues about legal vs. illegal workers, etc. I suggested to the gym that we could travel to Wenatchee, get our exercise by picking apples (strenuous work and vigorous exercise), and donate the apples and pay to charity and to the hungry.

- skahn

October 17, 2011 at 10:12am

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The only solution to the OWS for arnon is if the unemployed workers unite behind his/her preferred "organized" labor union. Preferably a union that doesn't abide by some quasi-horizontal organization but is a top-down structure where a union boss tells the unemployed how they can effectively protest. Otherwise, the OWS is nothing more than crypto-anarchist-neo-hippie-fascist-commie-drum-circle-trustifarian ne'er do wells that have no business protesting unless they have the Arnon seal of approval.

- singlspeed

October 17, 2011 at 11:52am

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Aaron's idea is a good one but here is why OWS chose Wall Street and is not called ODC is because they understand the golden rule. 'He who has the gold, makes the rules' The power cord connection between NYC and DC is well known as well as NYC being the news media capital of the US. Where else to best get the message out? DC tends to be hermetically sealed off from the outside at times. I think what will happen next is that OWS and the other Occupy city organizations will pick a day to occupy the Mall and then camp on the Public Lawn. Right now OWS and Occupy "______" (insert city) is gaining momentum. I think it will start to coalesce and then it can occupy DC. That's when things will really get interesting.

- singlspeed

October 17, 2011 at 12:02pm

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singlespeed - they should concurrently occupy Wall Street and K Street. I read somewhere that there were 3,000 lobbyists on Capitol Hill on any given day, whose sole job is to focus on dismantling Dodd-Frank.

- WandreyCer

October 17, 2011 at 12:33pm

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Unions do NOT represent everyday working people any longer. Instead, they mostly represent the parasitic class: pampered, overpaid, under-worked, government employees with above-market salaries and bloated, obscenely expensive, benefits, including fat pensions in their early to mid 50's while the rest of us are still trying to be productive. The few private sector workers represented by unions are like the UAW and other business-killing unions that could not exist in a free country without massive government favoritism. Voluntary unions are OK; forced unionism is evil, pure and simple.

- dalefogden

October 17, 2011 at 12:37pm

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singlspeed is again fantasizing that he knows what I think. Typical of people with single-brain-cells

- arnon

October 17, 2011 at 1:37pm

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dalefogden so government employees are parasites and UAW belong to a union that is also parasitical. I would like to know who is not a parasite in your opinion surely not farmers who get a lot of help from the government. So, aside from yourself who is not a parasite?

- arnon

October 17, 2011 at 1:39pm

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arnon...I don't fantasize what you think. You said it. Or am I confusing your precondition of Union involvement before you will consider their protesting as legitimate? Right here: http://www.tnr.com/article/politics/96111/occupy-wall-street-grassroots-political-action arnon: "If and when the OWS joins forces with the labor movement then they will deserve respect. Right now they are just an inchoate bunch of students who have fallen in love with their media image." and here: http://www.tnr.com/article/politics/magazine/96062/occupy-wall-street-zizek-lewis?page=1 arnon: "There has been speculation that Union organizations will join the demonstrations. I hope they do and teach the demonstrators about practical politics. If this happens I will take them more seriously."

- singlspeed

October 17, 2011 at 1:51pm

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"...including fat pensions in their early to mid 50's." Dalefogden must be referring to police & fire-fighters, with this phrase. They are the only public-sector workers I know of who enjoy such retirement schemes. (Admittedly, there is the phenomenon of "pension spiking", which allows some highly paid public employees to receive some pretty outrageous benefits, but they are a very small proportion of public sector retirees. Pension reform for these folks is clearly indicated. But for the typical government worker, including teachers, etc., retirement benefits are not nearly as lucrative as Dalefogden characterizes them.) Funny thing is, Republican politicians in such places as Wisconsin & Ohio have attempted to drive a wedge between such "first responders" & the rest of the public sector unionized workers by declaring their undying support for the differentially skewed retiement benefits such public employees receive, while seeking to weaken pension benefits (e.g., shift from "defined benefit" to "defined contribution" programs) for other public sector workers. And where is the "massive government favoritism" that supports the existence of such private sector unions as the UAW? I think the only place exists is in dalefogden's head.

- Haole45

October 17, 2011 at 1:53pm

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arnon...I don't fantasize what you think. You said it. Or am I confusing your precondition of Union involvement before you will consider their protesting as legitimate? Right here: http://www.tnr.com/article/politics/96111/occupy-wall-street-grassroots-political-action arnon: "If and when the OWS joins forces with the labor movement then they will deserve respect. Right now they are just an inchoate bunch of students who have fallen in love with their media image." and here: you say something similar.... http://www.tnr.com/article/politics/magazine/96062/occupy-wall-street-zizek-lewis?page=1 arnon: "There has been speculation that Union organizations will join the demonstrations. I hope they do and teach the demonstrators about practical politics. If this happens I will take them more seriously."

- singlspeed

October 17, 2011 at 1:53pm

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wandrey.... A simultaneous occupation of NYC and DC would be really effective. Wondering how critical mass can be achieved. Maybe the OWS camp on the steps of Congress and 'K' street. Of course, as Aaron pointed out about not being able to shame bankers, I don't think it's possible to shame the lobbyists either. Still worth a try.

- singlspeed

October 17, 2011 at 1:56pm

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I like Jill's comment: ...Great piece. Thank you especially Mr. Berman for sidestepping the worn out media memes of who is participating in these protests. The range is much broader than reported so far and your efforts are much appreciated.... but I think her further suggestion and that singlespeed endorses ...they should concurrently occupy Wall Street and K Street..is opposite to the point of Berman's sophisticated and judicious piece. The protests are worthwhile, worthy, have a clear point. rather splendid in their human variety and quintessentially American but going nowhere. Organized, reasonable political action harnessing the OWS energy that's the key. To the extent OWS and its brother and sister Os are meant to be anarchic in principle--we have them in Canada, in my city Toronto--they are a welcome but temporary phenomenon. The contrast between OWS and the Tea Party with reference to "'pre-party formation,'" as pointed out by Berman, could not be more instructive or illuminating.

- basman

October 17, 2011 at 2:28pm

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p.s skan Your whimsy and diffidence have gotten as old as they are ludicrous.

- basman

October 17, 2011 at 2:30pm

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Singlecell, I said union involvement, I never said: "The only solution to the OWS for arnon is if the unemployed workers unite behind his/her preferred "organized" labor union. Preferably a union that doesn't abide by some quasi-horizontal organization but is a top-down structure where a union boss tells the unemployed how they can effectively protest." You are demagoguing the issue.

- arnon

October 17, 2011 at 2:47pm

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I agree with you Itzak - but I will say the sheer cussedness of this thing has its own power. The occupying, protesting messy humanity of it has been its own stubborn reason for success. We'll see if that unwieldy force can mature, as it certainly will need to.

- WandreyCer

October 17, 2011 at 3:01pm

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arnon... how can i be "demagoguing" the issue by referring to your statements about only endorsing the OWS once they receive legitimate teaching of practical politics from labor unions?

- singlspeed

October 17, 2011 at 3:18pm

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Stop lying singlecell, I never talked about top down leadership in unions. Here are your words: "The only solution to the OWS for arnon is if the unemployed workers unite behind his/her preferred "organized" labor union. Preferably a union that doesn't abide by some quasi-horizontal organization but is a top-down structure where a union boss tells the unemployed how they can effectively protest." Aside from Unions joining and organizing the demonstrators I said nothing you said I said. Yes, you are a demagogue, singlebrain cell.

- arnon

October 17, 2011 at 3:40pm

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Haole45 writes: "And where is the "massive government favoritism" that supports the existence of such private sector unions as the UAW?" The government owns a huge chunk of GM--as high as 61%. GM just paid UAW workers around $6K as a signing bonus for the latest contract. That came out of the shareholders slice of the pie, which is another way of saying the taxpayer. Have you ever heard of a company about to go out of business turn around and pay their employees a signing bonus in spite of still losing money hand over fist? And let's not forget that half the stimulus went to state and local municipalities. And since they are all struggling with their unions and pension costs, you could say half the stimulus went to prop up the system that helped us get here in the first place. Make no mistake: The stimulus was a HUGE boost to the unions. Massive and unprecedented. Hopefully you can understand voter frustration at doing the same thing again, especially when the place where the money is going is a black hole (pensions) that nobody disputes will eventually default.

- seattleeng

October 17, 2011 at 3:47pm

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How can I be lying? Every other post regarding the OWS you keep going on about how the only way the OWS becomes legitimate in your eyes is if they join with Unions and learn the art of practical politics. What part of that is a lie? Or is just that you don't like the idea of non-hierarchal protests? You keep insisting that's the only way for you to start taking them seriously. Then you go of the deep end and start comparing the OWS to far-left, anarchist protestors in Europe (on other threads). I understand the need to include unions in the OWS but it should not be a prerequisite nor a precondition for the issues the OWS protests to be legitimate. Here...I'll provide a picture for you to understand how unions tend to be organized. Top-down. It's not horizontal. Their structure of operation is similar to a corporation. So when you say Unions join and organize the OWS, it's not a lie to deduce that you want a hierarchal structure to the protesters. http://opeiu8.org/AboutOPEIULocal8/UnionOrganizationChart/tabid/241/Default.aspx Now go have that cup of tea.

- singlspeed

October 17, 2011 at 3:57pm

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singlspeed "How can I be lying? Every other post regarding the OWS you keep going on about how the only way the OWS becomes legitimate in your eyes is if they join with Unions and learn the art of practical politics." You are laying again, and you know it. I only referred to unions a few times what's wrong with that. You also seem to have a right wing idea of unions. In any case don't address me anymore I don't talk to liars.

- arnon

October 17, 2011 at 4:11pm

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K street lobbyists might be tough to embarrass, but the pols and staffers with whom they interact are less so.

- AaronW

October 17, 2011 at 4:21pm

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seattleeng, You're reading outdated articles. As of November of 2010 the U.S. government owned less than 27% of GM and planned to sell all of its shares by the end of 2011. It has probably sold all but a small percentage of them by now. Your 61% government-ownership figure is from 2009. My source is an April, 2011 article in the Wall Street Journal. I assume you trust that source. See below. http://online.wsj.com/article/SB10001424052748703916004576271382418887092.html

- magboy47.

October 17, 2011 at 4:41pm

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Wrong Magboy. As of October 3, 2011 taxpayers hold 27% of GM according to the article below. That is a huge chunk no matter how you slice it. I never said it was 61% today, I said it had gone as high as 61% in the past. The sale you think happened never did because the GM share price fell so hard the gov didn't want to sell and take the losses. www.foxbusiness.com/industries/2011/10/03/treasury-will-be-patient-with-gm-stake-official/ This is a $15B taxpayer gift to GM. A more accurate assessment is this a $15B taxpayer gift to the unions.

- seattleeng

October 17, 2011 at 4:57pm

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seattleeng, "The government owns a huge chunk of GM--as high as 61%. " I don't see the word "past" in there.

- magboy47.

October 17, 2011 at 5:06pm

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arnon, there is nothing wrong with referring to unions. the issue is that you've kept insisting that the only way for OWS to be legitimate to you is IF OWS embraces unions and is taught practical politics. If you can't or choose not to explain why you think union-style political organization is a source of legitimacy for you to even harbor the thought of maybe "embracing" the OWS protestors that is fine. But don't go on repeated about how you don't imply it with your earlier posts. As for calling me a liar, go on and say that if it makes you feel better.

- singlspeed

October 17, 2011 at 5:14pm

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seattleeng, I grew up in the birthplace of GM, Flint, Michigan. I was there for the 50th Anniversary Jubilee in the Fifties, when GM and Flint were booming. I didn't like the idea that some some of my buddies could work 20 years for GM and then draw a good pension and health-care benefits for themselves and their families for life. It's unfair. But GM made that deal with the UAW in boom times (of course, that deal was downsized, starting in the Seventies). If you want to blame somebody for today's UAW-pension "black hole," blame a corporation, GM. Don't blame the government. The government saved the American auto industry from collapsing totally. If that had happened, hundreds of thousands of people in the Midwest whose jobs are tied into the auto industry would not be on welfare--they'd be in soup lines and living in tent cities. Most folks out here in Seattle, where I now live, have no idea about how important the auto industry is to the Midwest (think Boeing in Seattle). I'm sure the government owns a very small percentage of GM now. Blame corporate America, not the government, for corporate inefficiency in the past. People on the Left often blame both the government and business for our economic problems. People on the Right usually blame only the government. The Left is a bit more objective. I said a "bit" more.

- magboy47.

October 17, 2011 at 5:36pm

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singlspeed, you are full of shit. I said unions was one of a number of organizations, though an important one, that should engage and lead the demonstrations. Democrats, especially elected Democrats should also stand with them. We are still a nation of millions of workers and many of them still need to be unionized in order to fight the legislative battles ahead. Anyway I am tired to talking to an anarchist runt like you who probably never worked a day in his life. Don't come back with some bull shit story about how you used to be longshoreman or truck driver. You sound more like some disaffected right winger who decided to become an anarchist.

- arnon

October 17, 2011 at 6:23pm

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magboy writes: "I don't see the word "past" in there." If you must be so pedantic, then I'll re-word it for you: The government owns a huge chunk of GM--as high as 61% at times.

- seattleeng

October 17, 2011 at 6:40pm

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Magboy writes: "If you want to blame somebody for today's UAW-pension "black hole," blame a corporation, GM. " I'd blame GM and the union. And as a good capitalist, I'd say let them fail for their past sins. Failure is what happens to those that don't plan well for the future. "The government saved the American auto industry from collapsing totally. If that had happened, hundreds of thousands of people in the Midwest whose jobs are tied into the auto industry would not be on welfare--they'd be in soup lines and living in tent cities." No it woud not have happened. The US buys a certain number of cars per year. If GM went away, we'd still buy the same number of cars. And thus we'd buy the same number of batteries. And windshield wipers. And transmissions. And these are all made in the US already for companies like Honda and Toyota and BWM. Those companies would have picked up the slack and done it with American workers. Yes, in a different part of the country. But Detroit does not own the birthright on auto making. "I'm sure the government owns a very small percentage of GM now." I'm sure you are wrong. I sent you a link to an article from the beginning of this month that said the gov owned 27%. Read it.

- seattleeng

October 17, 2011 at 6:49pm

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arnon, would you please cool it? You're ruining all these threads with your ad hominem aggression. Your twin habits of responding to any pushback from other posters by denying that you've ever said anything like what they are responding to and tarring posters as Nazis and communists are equally tiresome. singlespeed is neither an anarchist, nor a disaffected right-winger, nor a proletarian poseur. He's a liberal Democratic architect with an interest in environmentalism.

- AaronW

October 17, 2011 at 7:01pm

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"The government owns a huge chunk of GM--as high as 61%." "I never said it was 61% today, I said it had gone as high as 61% in the past." "As of October 3, 2011 taxpayers hold 27% of GM according to the article below." seattle, if we agree that the people of the United States owned a big chunk of GM in the recent past, at highest point 61%, and that that chunk is getting smaller fast as time goes by and is now less than half that, what exactly is your point? That the correct policy would have been to let GM collapse and part of the central economy of the region along with it?

- ironyroad

October 17, 2011 at 7:26pm

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singlespeed - it is beneath your dignity and intelligence to respond to such idiocy, trust me. Totally ignore, don't even read it.

- WandreyCer

October 17, 2011 at 7:41pm

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...That the correct policy would have been to let GM collapse and part of the central economy of the region along with it... Clearly the correct policy.

- basman

October 17, 2011 at 8:06pm

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seattleeng, I trust your link to foxbusiness.com like you trusted my link to 60 Minutes. As I said in another thread on this site, over the past couple of years I saw 2 different guys say on Fox News that there was no terrorist attack on America while G.W. Bush was president. One was Rudy Giuliani. Nobody on Fox News corrected the second guy, who was on a panel of five commentators. I stopped trusting and watching Fox News after that.

- magboy47.

October 17, 2011 at 8:33pm

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"singlespeed is neither an anarchist, nor a disaffected right-winger, nor a proletarian poseur. He's a liberal Democratic architect with an interest in environmentalism." Who cares what he says he is. I respond to what he writes and his attacks on unions are the same as the attack by right wingers.

- arnon

October 17, 2011 at 8:57pm

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"singlespeed - it is beneath your dignity and intelligence to respond to such idiocy, trust me. Totally ignore, don't even read it." Yea, take your comrade in revolutionary causes advice "don't even read it."

- arnon

October 17, 2011 at 9:00pm

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What attacks on unions, arnon? You're paranoid.

- AaronW

October 17, 2011 at 9:20pm

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Aaron this the umpteenth time you have shown me that you can't read. If you don't know what singlebraincell said about unions, butt out.

- arnon

October 17, 2011 at 9:39pm

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arnon, before I wrote that last post, I went back and read every one of singlespeed's posts in this thread. On no occasion did he write anything that "attacked" unions. The closest he came was suggesting that union organization was hierarchical, a contention which he presented as factual, not normative, and for which he sought to provide evidence.

- AaronW

October 17, 2011 at 10:20pm

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Magboy writes: "I trust your link to foxbusiness.com like you trusted my link to 60 Minutes." Please. It was a fox website. It was written by Dow Jones newswire. Learn how to separate your ideology from the truth. And I didn't distrust the 60 minutes. I noted it was ironic that 60 minutes--responsible for the the most visible example EVER of mainstream media fabricating information--being critical of someone else for fabricating information. That was the reason for my callout.

- seattleeng

October 17, 2011 at 10:26pm

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irony writes: "That the correct policy would have been to let GM collapse and part of the central economy of the region along with it?" No, the correct policy would have been for the government to serve a role in making sure that GM's business can be streamlined and structured in a way that they can make money on each car. The idiocy of what was done is the same idiocy that is being done with pensions today: Ignore the problem and hope it goes away. It will not. GM is not more cost competitive today than they were 5 years ago. Their designs are no better or worse than 5 years ago. Ergo, they will fail. Propping them up is the wrong thing to do. Solyndra was not cost competitive at small scale or large scale. Ergo, it would and did fail. Propping them up was the wrong thing to do. You can't pick winners based on your heart. You will always lose. You must pick winners based on numbers. Money. Product appeal. Product margin. Product quality. How many people will plunk down money for the product. How well does the product work. There are those in this world that get this. And those that don't. Those that don't believe there are a million evil forces at work thwarting what they want to work. There are not. It's as simple as how many people want to but this at that price. No more, no less. Drop the price, the appeal goes up. Raise the price, the appeal goes down.

- seattleeng

October 17, 2011 at 10:33pm

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According to wikipedia: Earlier this year, General Motors reported its first full-year profit since 2004. It can carry forward previous losses to reduce tax liability on future earnings. It earned $4.7 billion in 2010. The Wall Street Journal estimated the tax break, including credits for costs related to pensions and other expenses can be worth as much as $45 billion over the next 20 years. The rise in U.S. sales was 6.3% -- the first upward move in ten years. GM is still listed as second in the top three global auto manufacturers. So, why shouldn't the American taxpayer have a slice of this good stuff? VW, GM's main competitor along with Toyota in terms of global sales, is the leading car maker and the German state of Lower Saxony has a 21% equity holding in the company. Nobody seems to find that either illegitimate or have evidence that it's commercially unviable.

- ironyroad

October 17, 2011 at 10:50pm

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basman: p.s skan Your whimsy and diffidence have gotten as old as they are ludicrous. If you are going to attack me, please spell my name correctly. I am mildly dyslexic and make quite a few typing errors in my comments. Perhaps you suffer from a similar handicap, but I prefer to think that reading my comments fills you with such fury that as soon as you see one of my comments you type clumsily with incoherent and sputtering rage, leaving spittle on your computer screen. I hope you realize that comments chastising trolls for being trolls makes them redouble their trolling efforts. Seriously, and I invite you to respond coolly, logically, calmly, and coherently, the problem of this form of communication is that it is difficult to "attack" another participant for being flawed and deficient iin intelligence, wit, logic, manners, etc. without yourself being as bad or worse that the person you attack. Also, when attacking another participant (in this case, me), at the very least it seems appropriate to make a request/demand of how you think the person should change. After a fair amount of polite badgering by TNR I renewed my subscription. I have yet to see the slightest description of "rules" for participating, though I presume that there are behaviors and words which would get someone kicked off this forum. (I can imagine some, but I will leave the details to your imagination, which like your taste and decorum, is undoubtedly superior to mine.) Anyway, I request a serious answer.

- skahn

October 17, 2011 at 11:19pm

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Arnon:Bullshit, Aaron. Truth is that you Sophia and a few others don't won't t hear any criticism of your beloved OWS demonstrators. That's your problem. Arnon: singlspeed is again fantasizing that he knows what I think. Typical of people with single-brain-cells Arnon: Stop lying singlecell, I never talked about top down leadership in unions... Arnon: singlspeed, you are full of shit. Well, it's sort of like watching NASCAR races, but so far there don't seem to be any fatalities.

- skahn

October 17, 2011 at 11:31pm

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"The closest he came was suggesting that union organization was hierarchical, a contention which he presented as factual, not normative, and for which he sought to provide evidence." How do you know he "presented it as factual and not normative?" Anyway, hierarchy is what is wrong with society to him. Anarchic existence is the ideal. This plays into the hands of anti-Union activists who present unions as a form of gangsterism and pass laws to outlaw union organizing. The demonstrators so much haven't shown me that they are serious enough to organize themselves around some principle(s) and come up with a set of demands that could draw workers into their ranks. As Berman rightly says this has been one big festival. This is why it has attracted mostly young people who can afford to spend a few weeks or months having a good time. No wonder they wouldn't let Congressman John Lewis speak. He is the real deal. He is too serious and would show them off for the dilettantes they are. And they are supposed to shake up the establishment. Now, this is funny.

- arnon

October 17, 2011 at 11:41pm

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I went back to read basman's comments to see if I had grounds for attacking him or her. He said: Organized, reasonable political action harnessing the OWS energy that's the key. To the extent OWS and its brother and sister Os are meant to be anarchic in principle--we have them in Canada, in my city Toronto--they are a welcome but temporary phenomenon. The contrast between OWS and the Tea Party with reference to "'pre-party formation,'" as pointed out by Berman, could not be more instructive or illuminating. That's pretty reasonable. The problem – the elephant in the room – is what form of political/economic system is fair, workable, and productive? It's easy and fun to be “against stuff” such as vastly overpaid bosses and corrupt and risky investment banks that lose billions of dollars. For example, I prefer the “cooperative” movement to traditional capitalism. I have belonged to credit unions for over 30 years and I am currently involved with an effort to start a credit union. They are so far superior to banks in most regards there is no reason for most people to do business with banks, but most people stick with banks and whine when they get screwed in a thousand ways. I belong to one of the largest food cooperatives in the United States. It is far superior to Wal-Mart, Kroger, Safeway, Albertson's, etc., both in service, food safety, support for ecology, and so forth, but I have also been involved with food coops that crashed and burned and failed miserably. In most of my jobs, I worked for entrepreneurs and start-up companies. The people I worked for were not in the league of Jobs and Gates, but their personalities, styles, virtues, and faults were similar. Such people contribute a great deal to the functioning of society, but many of them are destructive monsters to be around and they also do a lot of harm. These are difficult issues about how a society should function to be fair, workable, and productive, and as I am old, it's hard for me to regard the OWS protesters as much more than silly children having fun making a scene.

- skahn

October 18, 2011 at 12:07am

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Through circumstances too tedious to explain, but certainly unfair in my favor, while I was in college I spent a summer working on an assembly line for Chevrolet (in the 1960s). The manager of the factory invited me to transfer to the college run by General Motors at that time and told me I would have a great future in GM management. I turned the offer down because the culture and environment of GM horrified me. In the three months I spent in the factory I came to the conclusions: 1) I was very poor at the work (I do not understand automobiles well and tend to fear and hate them). 2) While assembly line work was horrible and deadening, at the same time it paid absurdly well compared to other jobs at that time. Thus when similar blue collar work mostly disappeared in America (outsourcing, Asian companies out-competing US companies, automation, etc.) I was not that surprised and was relieved I did not follow that career. 3) At the time both management and union engaged in vicious, petty fighting (though this was long past the terrible days when American auto makers were first unionized); I had a very bad feeling about the future of American industry.

- skahn

October 18, 2011 at 12:10am

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arnon the great has pounded its keyboard once again to prove through crass postings how serious it is trying to be. "We are still a nation of millions of workers and many of them still need to be unionized in order to fight the legislative battles ahead. Anyway I am tired to talking to an anarchist runt like you who probably never worked a day in his life. Don't come back with some bull shit story about how you used to be longshoreman or truck driver. You sound more like some disaffected right winger who decided to become an anarchist." Who is the "we" you refer to Arnon? Sounds like you have a crypto-communist army waiting in the wings to tell us non-union liberals how to think, what to think, and which way to march otherwise we might be anarchists. You act like proto-fascist hiding behind a keyboard that goose-steps your way through the comment threads accusing people of demagoguery while throwing around ad hominem attacks at people who don't agree with you. You call people little nazis and anarchists with such ease just to deflect any critique of your posts. Because I don't agree with your position I'm an anarchist runt? Because some of us don't think the OWS has to join the Unions first to have a legitimate voice in the political arena in America, we're Marxist stooges? Arnon the only thing you do well is project your own sense of self-worthlessness, paranoia and nonsense upon others on this board. And practically on every thread post you comment on. As to whether or not I'm a longshoreman, right winger, architect, liberal or disaffected youth who has never been a card carrying member of AFSCME makes no difference to you, you'll accuse me of being a liar (again). Because you have proven yourself oblivious to anything and anyone that is counter to your paranoid little world you inhabit.

- singlspeed

October 18, 2011 at 12:16am

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I read with interest the comments by dalefogden and Haole45 about unions and pensions. For example: Unions do NOT represent everyday working people any longer. Instead, they mostly represent the parasitic class: pampered, overpaid, under-worked, government employees with above-market salaries and bloated, obscenely expensive, benefits, including fat pensions in their early to mid 50's while the rest of us are still trying to be productive. There is a point here and its complicated. Firefighters and police do difficult and dangerous work, and in some cases like 911 what they go through is rather like “losing the lottery” instead of “winning the lottery.” So there are arguments for the benefits they get. Although I worked in a variety of jobs, I worked in a variety of education jobs in both public schools, a university, and in a library system (as a teacher rather than librarian). Again without going into details I got some small pension windfalls that are probably not “fair,” though not so much that I am living high off the hog as a member of the “parasitic class.” But I understand the point they are making. At the risk of plunging into the sardonic whimsy that so agitates basman, I will say, life is not fair, and in our (commendable) efforts to make it more fair we often make things worse.

- skahn

October 18, 2011 at 12:23am

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"How do you know he 'presented it as factual and not normative?'" Because I can read. Singlespeed was attacking you, arnon, not unions, for what, rightly or wrongly, he sees as your preference for hierarchical structure in your political organizations. He was not attacking unions for being hierarchical. In fact he said specifically that he had "no problem" with unions being involved with OWS. He was simply arguing that top-down management is not the only way to go. Please understand that I do not necessarily share singlespeed's opinions. As regards you and OWS, I wouldn't say that your problem is with its non-hierarchical organization. I think your attitude towards OWS is a more ill-defined than that. I'm not so sure that from one minute to the next you know why you don't like OWS; you just don't like it, goddammit!

- AaronW

October 18, 2011 at 12:30am

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irony writes: "So, why shouldn't the American taxpayer have a slice of this good stuff? VW, GM's main competitor along with Toyota in terms of global sales, is the leading car maker and the German state of Lower Saxony has a 21% equity holding in the company. Nobody seems to find that either illegitimate or have evidence that it's commercially unviable." For two reasons: Government should not be in the business of picking winners. It is too great of a source of corruption. As we've just seen with Solyndra. We watched as the government broke contracts and screwed the first-in-line investors in GM and put the unions ahead. The second is that allowing the government to participate in profits means they are very eager to spend money that will deliver a short term gain but a long term loss. A great article by Matt Taibbi a while back looked small cities that did deals with Wall Street. It gave them all a great short term pile of cash, and hung a noose aroudn their neck a few years after the Boss Hoggs all left office fat and happy. That is NOT something we want to repeat at the national level, although with things like Bush's drug benefits and Obama's health care, it has a way of sneaking in. What OWS is pissed about, and what the tea party is pissed about it crony capitalism. They are sick of the deal making. The are sick of the tit for tat. They are sick of "you scratch my back and I'll scratch yours" GMs current sales boost is due to them shedding assets and Japan's misfortune. It's a sugar high. However, if in 2 years they are doing well, then I'll eat some humble pie. But I don't think I'll need too.

- seattleeng

October 18, 2011 at 1:22am

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aaron... I appreciate your help in trying to clarify for dear arnon what I was attempting to say. My view of unions has always been mixed having worked with union folks and having worked for a quasi-union as a city employee in Denver. I understand and appreciate what unions have done historically in the U.S. but I also understand that their days (sadly in some respect) are numbered as political powerhouses in American politics. The numbers of union membership drop year by year for a variety of reasons. I just realize that in the current political climate any sort of "unionization" of the OWS will add fuel to any conservative critique that the OWS is nothing more than unions playing up class warfare. I've seen Fox and other pundit-heads play that song already. I think the OWS's success will have to be its ability to be multi-organizational for the time being so that a critical mass of support from a wide range of progressives and liberals can be built up. The form of OWS makes some people nervous. That's fine but it doesn't diminish the issues that OWS brings to light. My beef with arnon (if you call it that) is his or her precondition of establishment involvement for the OWS to have any sort of legitimacy to which I posed the question why and all we get in response are...well you've seen the responses. Anyway. Time for bed. Cheers!

- singlspeed

October 18, 2011 at 1:22am

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skahn writes: "There is a point here and its complicated. Firefighters and police do difficult and dangerous work, and in some cases like 911 what they go through is rather like “losing the lottery” instead of “winning the lottery.” So there are arguments for the benefits they get." That woudl be true IF the jobs that were more dangerous paid much better. They do not. In fact, they pay much worse. A route driver for Hostess or CocaCola has a higher death rate than a police officer. Garbage men have a higher death rate than police. Roofers do too. Mining machinery operators are 4X more likely than cops to die. Remember the shock when the public learned the pilots flying the Continental Connection turboprop that crashed in upstate New York were earning just $36,000? Their job is 8X more dangerous than a policeman. A solider in Iraq is about 130X more likely than a cop is to die on the job. So, no, you can't make a case that the reason cops and fireman have a great pension is the danger. I honestly wish we coudl pay everyone a pension. But the fact is that paying everyone a pension means that everything will cost more. A lot more. If labor is, on average, 20% of everything we consume, a nice pension will easily double the labor portion as it easily doubles the hourly wage. If there are 3 TVs in the store...The first is made in China. Labor is 1% of cost. The cost is $600. The next is made in america by a guy making $25/hour. No pension. The cost is 20%, or $720. The next is made in America by a guy making $25/hour with a pension. The cost is $840. They are all the same. Which do you pick? That's what I thought.

- seattleeng

October 18, 2011 at 1:39am

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A number of things might come into play, including quality of workmanship and reliability as per consumer tests. It might well be the German TV that's $759 but looks really nice, has a good reputation, and is made in the Czech Republic by people who have a solid industrial tradition and also modest wages and pension expectations. But if pensions are such a problem, I guess we could go back to the days when couples had as many children as they could possibly manage so they could be sure of being looked after in their old age when they couldn't work any more, and were destitute. Who knows what the next Republican rescue plan is going to be. Incidentally, there's a new book out about how companies have raided the pension funds of their workers over the last 15 years or so. In that comparison, Social Security comes out looking really well.

- ironyroad

October 18, 2011 at 2:05am

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Seattle says - "If there are 3 TVs in the store...The first is made in China. Labor is 1% of cost. The cost is $600. The next is made in america by a guy making $25/hour. No pension. The cost is 20%, or $720. The next is made in America by a guy making $25/hour with a pension. The cost is $840. They are all the same. Which do you pick? That's what I thought." That is based on the assumption that everyone buys purely on price point and I won't deny that it isn't true. But when people on both sides of the aisle lament the loss of manufacturing of durable goods in the US then go out and buy the cheapest throw-away product then no amount of pension reform or downward pressure on wages will do anything about that. Most manufacturers moved to the Asian market because it was cheap labor and it made the profits higher because of the company's "responsibility to the shareholders" and certainly not for quality control. It has taken Japan, Korea and Taiwan 30 years to get the QC to a point where their products are 1000x superior now than what they started making in the 80s. Taiwan is now the leading manufacturer of high-end carbon bicycles because they've perfected the processes to make them far less than the bespoke makers. Even boutique manufacturers like Colnago or Look (Italian and French companies respectively) now have their $5000K frames made in Taiwan. It wasn't always that way. China's only real advantage at this point is the vast pool of unskilled and underskilled labor that can be paid pennies on the hour and thrown at the job. Why pay a living wage, offer health benefits or retirement pensions when you've got 100,000 starving farmers knocking on the door to replace the burned out, worn down worker at the button factory? But even that is changing as China realizes that the higher quality manufacturing is where the future is heading. I'm wondering how long it will take manufacturers to start chasing the cheap labor to Africa and eventually comes back full circle to the US where we can start making cheap consumable goods for the Chinese! (That's a bit tongue in cheek but not far off if we keep hollowing out the middle class and blue collar manufacturing by chasing double digit profits then As to what TV I would buy, I would choose the TV with the best performance, warranty and preferably made in the USA (but when was a TV last made in the US?). In fact, I go out of my way to find particular products I need, want or will use that are made in the US. It takes a little searching and researching but if I'm going to spend my hard earned money I want to support the efforts of those companies and individuals that choose to manufacture here in the U.S. Doesn't mean I'm always successful but I do make the effort. I'd rather save up money and buy the $150 Lie-Nielsen block plane than the $20 Chinese made Stanley any day. Because I know the former is made to last a lifetime and it helps LN keep making their stuff in the US.

- singlspeed

October 18, 2011 at 10:51am

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Singlespeed writes: "That is based on the assumption that everyone buys purely on price point and I won't deny that it isn't true" OK, so you agree that if you were a CEO you'd make the same decision to move at least a good part of your manufacturing to China so that you could be cost competitive (although, as I noted previously, the primary reason for building in Asia is not cost...it's that everything is already there and that cost is just another benefit). Singlespeed writes: "Why pay a living wage, offer health benefits or retirement pensions when you've got 100,000 starving farmers knocking on the door to replace the burned out, worn down worker at the button factory?" But understand the wage the Chinese are getting is a HUGE improvement over what they were getting: Nothing. The workers overwhelmingly are very poor farm kids. They move to the city and live in a cramped dormitory doing these awful jobs because it is a better life than what they had.

- seattleeng

October 18, 2011 at 11:56am

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Irony writes: "But if pensions are such a problem, I guess we could go back to the days when couples had as many children as they could possibly manage so they could be sure of being looked after in their old age when they couldn't work any more, and were destitute. Who knows what the next Republican rescue plan is going to be." Pensions are only a problem when they assume an unrealistic rate of return AND somehow get the government to backstop any gap. But understand too that pensions are a very simple deferred compensation mechanism. It is forced savings today for a payout later. There is nothing magic about it. When a teacher or fireman retires, there is roughly a $1.5M fund that is their pension in place in a bank some place. It will be used to pay out the 30 years of health care and monthly pension monies. A teacher, for example, could have a starting salary today of roughly $80,000 if they opted to forgo their pension, and a salary their last year of retirement of roughly $120,000. But because they have a pension, those figures are both reduced by the annual contribution amounts to the pension. What is disingenuous here is those with pensions pointing out their low salary as a reason for needing a raise. Their low salary is BECAUSE they have a pension. They could easily forgo the pension and get a high salary, like everyone else.

- seattleeng

October 18, 2011 at 12:07pm

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"But understand the wage the Chinese are getting is a HUGE improvement over what they were getting: Nothing. The workers overwhelmingly are very poor farm kids. They move to the city and live in a cramped dormitory doing these awful jobs because it is a better life than what they had." I suppose one could say it's better but that presumes that living in industrial contaminated dorms is better than being subsistence farmers. Part of that urban migration isn't always by choice but because those farming families are pushed off their land to make way for progress. I've heard reports that there is also a reverse migration (albeit not at a rate to counter the inflow) from urban areas back into rural areas because the younger generation is realize that urban work environment is not inherently better when they can return and build localized businesses and local markets that don't degrade the quality of life. Work to live, not live to work.

- singlspeed

October 18, 2011 at 1:05pm

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I should add to my comment is that drives much of what we call progress is the Western presumption that industrial living is the preferred way of life for everyone on the planet. If you're not working for a corporation making things or pushing paper and instead you farm your own food or don't have TVs and the NFL for distractions that somehow your life is less fulfilling.

- singlspeed

October 18, 2011 at 1:09pm

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"Occupy Wall Street Is Chaotic, Romantic, and anti-Semitic? Is that a Good Thing? "One Percent" "Anti-Semites are a tiny fringe at the Occupy Wall Street protests. But an inability to quiet them shows the limitations of a leaderless movement." By Michelle Goldberg http://www.tabletmag.com/news-and-politics/80922/one-percent/?utm_source=Tablet+Magazine+List&utm_campaign=21b9c3ab99-10_18_2011&utm_medium=email

- arnon

October 18, 2011 at 2:21pm

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AaronW "How do you know he 'presented it as factual and not normative?'" "Because I can read." That's questionable.

- arnon

October 18, 2011 at 2:24pm

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seattleeng: "The government owns a huge chunk of GM--as high as 61%. GM just paid UAW workers around $6K as a signing bonus for the latest contract. That came out of the shareholders slice of the pie, which is another way of saying the taxpayer. Have you ever heard of a company about to go out of business turn around and pay their employees a signing bonus in spite of still losing money hand over fist? " This is factually wrong in many ways. As others have pointed out, the government no longer owns anywhere close to 61% of GM. But more importantly, the signing bonuses were not unique to GM: they were also used for the new contracts with Chrysler and Ford, of which the government owns zero (Chrysler got a loan, Ford took no government help at all). So to attribute the GM signing bonuses to government involvement is just fallacious. Instead, it's the way the unions chose to to deal with management in this industry this time around. The companies are not "still losing money hand over fist." The Big Three all reported a profitable 2010. http://www.csmonitor.com/Business/2011/0104/Detroit-s-Big-3-all-turn-profits-in-2010-pulling-out-of-long-skid And it's not as if the signing bonuses were on top of the usual wage increases; instead, there will be no wage increases. The deal increases GM's labor costs by about 1% a year, which sounds hardly unreasonable for a company that's back to making money.

- dsimon

October 18, 2011 at 4:25pm

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seattle: "They could easily forgo the pension and get a high salary, like everyone else." ?????????

- ironyroad

October 18, 2011 at 5:13pm

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dsimon writes: "The companies are not "still losing money hand over fist" In 2Q of this calendar year GM posted a big profit because they sold a lot of assets. In this current quarter, GM's sales, in part, were attributed to Japan's tsunami killing supply. Like I said, in 2 years if GM is back on their feet and back at fighting weight then the gov will have done good. If not, then it was just good money thrown after bad, and a tit-for-tat payback to the unions. Question: How much GM stock have you bought? Those that have to make these bets for a living have avoided GM, which is why the stock is so down (and note it FELL after this quarters announcement). This means that people with money to invest overwhelmingly do NOT believe GM will be doing well in 6 months to 2 years. If you haven't bought any GM stock, then it's a safe bet you don't find it that compelling of an investment either.

- seattleeng

October 18, 2011 at 9:34pm

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Seattle writes: : "They could easily forgo the pension and get a high salary, like everyone else." And then Irony writes: "????????" Seattle sez: Not sure what that means. Pensions and salary are fungible/interchangeable. A pension that pay you $50,000 per year when you are 60 years old has an readily calculated value when you are 25. It is not magic. You can "buy" a pension if you want. It's called an annuity, aka life insurance (not the term stuff, the other stuff).

- seattleeng

October 18, 2011 at 9:38pm

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seattleeng: First, you do not refute the claim that GM (and the others) made money in 2010. Nor do you provide any evidence that GM is losing money "hand over fist." Nor do you address the argument that the GM signing bonuses were not soaking the taxpayer as a government-induced union payoff since they were also used at the other two companies where the government has no ownership interest. "Like I said, in 2 years if GM is back on their feet and back at fighting weight then the gov will have done good. If not, then it was just good money thrown after bad, and a tit-for-tat payback to the unions." That's not true. You assume that the purpose of government intervention was to make money, but that's not the case. It was in large part if not in most part to avert at least still more massive job losses in an economy that was already suffering enormous job losses. Adding potentially hundreds of thousands of more lost jobs on top of what was already going on risked a full-blown depression, rather than what was clearly going to be a deep recession. Just delaying those job losses would make the economic hole we'd have to climb out of a little less deep, even if GM eventually failed anyway. So the government has already "done good" regardless of what happens from here on out, and regardless of whether I'm interested in buying GM stock--and again, has little to do with unions. "If you haven't bought any GM stock, then it's a safe bet you don't find it that compelling of an investment either." So every stock I don't own I must not consider a compelling investment? There's lots and lots of those, and yet some people own them, no? Considering that most well-diversified portfolios don't consist of more than 30 or 40 stocks, that would leave a lot of bad investments on the NYSE. Perhaps the argument needs to be refined a bit.

- dsimon

October 19, 2011 at 9:23am

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I was -- and still am -- baffled as to who the "everyone" is who apparently gets a high salary in the United States.

- ironyroad

October 19, 2011 at 10:25am

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Irony, a teacher without a pension could have a starting salary out of school north of $65 or $70K. That is a reasonable salary, and yes, a high salary. By "everyone" I mean those with similar professional training.

- seattleeng

October 19, 2011 at 10:33am

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dsimon writes: "First, you do not refute the claim that GM (and the others) made money in 2010. " As I said, they did it primarily by selling assets that weren't cars. That is a problem because you can't sell buildings every year. DSimon writes: "That's not true. You assume that the purpose of government intervention was to make money, but that's not the case. " No. Government intervention is valid IF it's not just a giveaway for the taxpayers AND the company has a viable business but needed an extraordinary loan to make it through a tough time. HOwever, 95% of the time, wall street will should be able to provide this capital. that's what they do. Whether or not something was just a giveway cannot really be known until a few years down the line. Like I said, if GM is healthy and profitable in 2 years, then the gov did the right thing, even if some money was lost. But you must also admit that if in 2 years GM sales are back in the crapper and the product quality is suffering then this would have been a bad move for the government. DSimon writes: "So every stock I don't own I must not consider a compelling investment?" No it's your money. If you want to use your stocks as a way to support a cause you like, then be my guest. But the government should not be in that business.

- seattleeng

October 19, 2011 at 10:45am

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seattleeng: "As I said, they did it primarily by selling assets that weren't cars." Yes, but as you said it was "[i]n 2Q of this calendar year." That doesn't apply to 2010. "Whether or not something was just a giveway cannot really be known until a few years down the line. Like I said, if GM is healthy and profitable in 2 years, then the gov did the right thing, even if some money was lost." I don't see why that's the case at all. Decisions are right or wrong based on the information one has at the time. If there was reasonable evidence that Saddam had WMDs and posed a danger, but after invasion it turns out that he didn't have them, that doesn't mean that the decision to invade was wrong. If I'm at a high camp on a Himalayan peak, and there's a storm going on, and the probability of reaching the summit and surviving is small, and I decide to go for it and I make it, that doesn't mean my decision was a good one. There were plenty of non-union reasons to help keep the auto industry from going under. The issue of whether it was a union giveaway is not dependent on what happened later. "But you must also admit that if in 2 years GM sales are back in the crapper and the product quality is suffering then this would have been a bad move for the government." No, not at all. As I wrote above, and will restate again since it apparently failed to make an impression the first time, it was a good move if it helped prevent a deep recession from becoming a full-blown depression. If that's the case, it doesn't matter anymore if GM is around in 2 years (though it would be better if GM is successful). It's like arguing that TARP was a failure if we don't get our money back. But if it prevented the global financial system from complete collapse, then it was a good (if distasteful) move regardless of whether we get paid back because we all would have been far worse off without it. The relevant question isn't whether the business survives; it's whether we're better off for having intervened than if we hadn't. "If you want to use your stocks as a way to support a cause you like, then be my guest. But the government should not be in that business." seattleeng, you're not addressing the argument. You implied that if I don't own GM then I must not think it's a good investment. But I don't own almost all stocks, as is the case with most people. Does it then follow that they're all bad investments? And you still don't address the argument that the signing bonuses were not mere union giveaways since they were utilized at companies where the government has zero financial interest.

- dsimon

October 19, 2011 at 11:10am

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Oh ok, "professional training" makes it a little clearer. But what I don't understand is why there should be a problem with (a) a formalized pension scheme into which both employer and employee contribute in whatever proportion or with (b) a government old-age insurance scheme on the model of Social Security, or at least with some regulation of private schemes. All modern economies have them, and there is a basic rational justification for having people put money into the pot for later on. The experience of pension structures in the modern economy seems tied in fairly closely with pre-industrial notions of having lots of kids so that one is protected and supported in old age. The downside of that was the Malthusian trap where economic growth can never catch up with population expansion because people have more children because they don't expect economic growth . . . The problem -- and there is a good discussion of this elsewhere in TNR -- is that if we fall back, as conservatives seem to want, into an entirely privatized old-age support system we are risking a return of Malthusian stasis: the frustration of exactly that part of the citizenry who would be normally freed up for productive activity precisely because they don't have to worry about supporting their parents in old age.

- ironyroad

October 19, 2011 at 2:46pm

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DSimon, as I said, in 2 years if GM is rocking I'll eat crow. Irony, you can either force people into saving or not. Personally, I prefer to have the option to save AND to actively invest the money myself. Through even the most dismal economy, I can deliver a much better return than the government is giving me. But make no mistake: A pension is a very expensive forced retirement plan. Those with a great pension have a low salary. The reason unions LOVE pensions is because these long term forced savings plans are opportune ways to skim money. There are some shady 401K plans out there too. Same thing. If enough employees wanted a pension, employers would offer them again. But most employers have settled for a much higher base salary, NO pension, and do the 401K themselves. Perhaps these are all the same folks that opted to buy flat screen TVs with second mortgages.

- seattleeng

October 20, 2011 at 1:18am

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seattleeng: "DSimon, as I said, in 2 years if GM is rocking I'll eat crow." I don't see how that is responsive to any of my points or questions. So I'll stop wasting my time trying to get any such responses.

- dsimon

October 20, 2011 at 10:08am

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You have one sentence in your post that ended in a question mark and had an obvious answer. The other 20 sentences are statements that I don't take much issue with. Do you want me to type "agree" after each sentence? Or perhaps "My god this sentence was prescient. Kudos for typing it" My point about you owning GM was merely this: If you think it's an awesome investment that would outpace the market, you'd be a fool NOT to own it. You obviously do not believe that. You words say one thing, your actions another. You've really said everything right there. The rest of the words you type are just window dressing. If you have a direct question, ask it and I'll answer it.

- seattleeng

October 20, 2011 at 1:22pm

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seattleeng: "The other 20 sentences are statements that I don't take much issue with." Oh, come on. Do you really need a direct question to respond to an argument? In any case, I wrote extensively about how the wisdom of the auto bailout did not depend on what happens two years from now but could be completely justified by the dire situation at the time. You just repeated that we'll see in two years if the bailout was wise. That didn't address my argument, nor does it indicate that you "don't take much issue with" it, since you seemed to say that we still have to wait and see. Nor did you address my argument that the signing bonuses were not government payback to unions since they were used at companies where government had zero ownership. If you agree, you didn't say so; a reader doesn't assume that silence constitutes assent. Nor did you address my point that there are lots of stocks I don't own. If fact, I don't own most stocks. Neither do you, I assume. Again, I ask: does it follow that they're all bad investments? Maybe it's a good investment, but there are others that I think are better investments, or maybe the risk doesn't fit my portfolio, or a host of other reasons why I don't own it. (When they were making Hummers, I put it on my "do not buy" list for ethical reasons. Does that mean I thought it was a bad investment?) I could say that your refusal to answer these questions, instead of just repeating your prior assertions, says it all--but I won't say that.

- dsimon

October 20, 2011 at 11:56pm

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And again, seattleeng, given my argument that the auto bailout was successful if it prevented an even deeper recession by averting job layoffs in the midst of the fiscal collapse, then it doesn't matter whether I think GM is a good investment now or not. So the question of whether I own GM stock is simply irrelevant to the point I was making, in addition to the other flaws I've pointed out.

- dsimon

October 21, 2011 at 12:14am

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Your premise "IF it prevented a deeper recession" can be the justification for any stupid financial move. If a recovery requires you to hit a certain "rock bottom" before the recovery can begin, then this action could be argued to have simply delayed the recovered. Your assertion is as silly as "jobs saved or created." It cannot be known by anyone at this point, and thus putting it in the "win" column (or "loss" column) is incorrect at this point. The government is quick to decide what bonuses executives may receive when their company is taken over. Those bonuses generally DO NOT match what their peers received in other companies that are not under government control. In this case, it would have been appropriate for the government to say ALL BONUSES are being muted since the taxpayer is the one footing these bonuses. GM workers, if you are pissed Ford workers got a better signing bonuses, then in the future do your damnedest to not go into receivership. If I squarely believe in something, as you appear to believe in GM, then I do own the stock. And I recently lots more than my shirt on the nuclear ETFs when the typhoon hits. But it is what it is. The markets right now DO NOT believe GM is looking sweet for the coming years.

- seattleeng

October 21, 2011 at 1:05pm

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PS. DSimon, I just ran across a story today in which Austin Goolsbee now believes Cash for Clunkers was a mistake. This parallels what I am talking about here. At the time, nobody could argue effectively for or against cash for clunkers, because its success depended on things that could not be known when it was done. And now that we know, key folks in the administration say it was a waste of taxpayer money that had zero impact on the recovery. Same thing here with GM. If GM is a viable brand and product in 2 years, then absolutely this was the right thing to do. But my hunch is that they will NOT be a viable brand and product in two years. Thus, this is prolonging the inevitable and wasting taxpayer money.

- seattleeng

October 21, 2011 at 1:31pm

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I am waiting for the US Jews at the occupy Wall Street to do their particular shenanigan attacking Israel with a chorus of universal support by the know nothing about Israel but who have the false certainty that Israel is a Apartheid state while in reality has one fifth of it's citizens that are Arabs. Meantime in the PA area a death sentence hangs over the head of anyone selling land to a Jew. Anyone ready to take a bet that this will happen within the Occupy Wall Street. After all "Jews control everything including the US Government." Right?

- Poupic

October 21, 2011 at 5:56pm

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"Your assertion is as silly as 'jobs saved or created.' It cannot be known by anyone at this point, and thus putting it in the 'win' column (or "loss" column) is incorrect at this point." That's not how decisions are made, or should be evaluated. You can't wait four years down the line and retroactively decide what to do. Decisions are made on the best available information at the time. Yes, one can't go back and run the counterfactual. But say there was solid evidence that another country had WMDs and the willingness to use them. And I mean really solid evidence (unlike what actually happened with Iraq). And we invade, and it turns out there aren't WMDs. Does that mean the decision to invade was wrong? If I bet my house on an investment that has a one-in-a-billion chance of working out, and I get lucky and make money, does that mean I made a prudent bet? Yes, I can't know if allowing those auto jobs would have made things so much worse. But given the information at the time, there were plenty of people who thought it would. Heck, we can't "know" if allowing all the banks to fail would have really resulted in economic calamity. But I think TARP or something like it had to be done, and so do a lot of other people. I think that made it the right decision (at least over doing nothing), even though we can't know for sure what would have happened without TARP. "The government is quick to decide what bonuses executives may receive when their company is taken over. Those bonuses generally DO NOT match what their peers received in other companies that are not under government control." Aside from the absurdity of comparing CEO bonuses that go into the millions of dollars with the couple of thousand being received by workers who are getting no other pay increase for several years, what does this have to do with the claim that the worker "bonuses" are just a sop to the unions? "GM workers, if you are pissed Ford workers got a better signing bonuses, then in the future do your damnedest to not go into receivership." Yes, Ford workers, where the government has zero ownership, got a larger signing bonus than those at GM. So that would seem to work against the claim that the GM bonuses were a government-led payback to unions. "At the time, nobody could argue effectively for or against cash for clunkers, because its success depended on things that could not be known when it was done." Yes, there are things that can't be known when a decision is made. But a decision still has to be made. Uncertainty and risk tolerance are two factors that have to be considered. There are almost always uncertainties. If there weren't, the market would always be setting the right price, there would be no risk, and no one would make any money. "If I squarely believe in something, as you appear to believe in GM, then I do own the stock." But that wasn't my question. (Nor did I write anything that says I "believe" in GM.) You wrote that if you think a stock is a good investment, then you own it. That's logically equivalent to the statement if you don't own it, then you think it's not a good investment. The question was whether you think that every stock you don't own is not a good investment--especially since you and I don't own most stocks. I have to say it gets a little frustrating when the actual question posed goes unanswered.

- dsimon

October 22, 2011 at 12:46am

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Plus, seattleeng, I gave several reasons why one might not own a stock even though it might be a good investment. Perhaps it's good for the long-term, but I don't want to tie up my money for that long. Or maybe it has tremendous upside potential, but the downside risk would be too damaging for those with limited resources if it goes sour. So the claim that "if you thought it was a good investment, then you would own it" is far too facile--not that I think any of this is relevant to the decision to intervene with GM at the time the decision was made.

- dsimon

October 22, 2011 at 12:52am

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http://www.nytimes.com/2011/10/23/opinion/sunday/bruni-occupy-wall-street-and-hollywood.html?_r=1&ref=opinion&pagewanted=print From Hollywood on Wall Street

- arnon

October 22, 2011 at 10:17pm

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Iranian students in support of OWS: http://mickhartley.typepad.com/blog/2011/10/solidarity-with-ows.html "The demonstrators chanted slogans in support of the protesters and denounced the crackdown on the protests. The students also set the flags of the United States and the Zionist regime on fire and chanted “Down with the United States,” “Death to Israel,” “Down with Capitalism,” and other slogans. A number of students also delivered speeches at the event, in which they said that true democracy could only be established under the banner of religion."

- noga1

October 23, 2011 at 4:40pm

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