Bailout Watch: Heading for a Populist Backlash? 36 comments
an article to
-
Font Size:
-
Print
- TweetThis
Now that the crisis is spreading to the real economy, you can feel the anger and resentment starting to build. Robert Reich thinks we may be "courting a populist backlash":
Are We Courting a Populist Backlash?, by Robert Reich: The government is doing a lousy job helping distressed homeowners. And according to ... the Comptroller of the Currency, the little that's been done has had surprisingly little effect. Nearly 36 percent of homeowners holding mortgages whose terms were adjusted to give them more leeway defaulted on payments within three months, and almost 53 percent were behind on payments by six months.
What's going on? It's hard to know for sure, because the homeowners who have qualified for help so far were supposed to have been fairly good credit risks.... My guess is the worsening economy is making it harder for just about all homeowners to pay their mortgages, and those who were teetering on the edge months ago ... are now way under water. Two of the biggest culprits: Layoffs and fewer working hours. ...
It wouldn't surprise me if many of these Americans were starting to look at the size of the bailouts of Wall Street and the bailout of the Big Three -- at the executives, well-paid professional employees, upscale creditors and shareholders, and even well-paid blue-collar workers, who are the major beneficiaries of this federal largesse -- and conclude that a fundamental principle of fairness is being violated.
These Americans aren't revolutionaries. To the contrary, they're deeply conservative. They've worked hard, but their hard work hasn't paid off. Some have tried to save, only to see their savings disappear. They're worried about the future and about their kids' futures. They never expected anything like this.
This is the angry soil in which populist backlashes can take root.
We may be able to do a better job of sorting out which homeowners to help now that we have some experience with the program, so the 53% number may be improved upon going forward. But if the goal is to prevent a certain number of foreclosures, and if the number cannot be improved, we could also help twice as many people. That might help with the backlash problem.
On the populist backlash, maybe that was part of the reason for this?:
Deal to Rescue American Automakers Is Moving Ahead, by David M. Herszenhorn, NY Times: The White House and Democratic Congressional leaders said Monday that they were close to agreeing on the terms of a $15 billion government rescue of the American automobile industry that would be directed by one or more appointees of President Bush and would impose expansive federal oversight of the auto companies.
The House speaker, Nancy Pelosi, said she hoped that Mr. Bush’s appointee — or car czar, as the position has come to be known — would not need to be replaced by President-elect Barack Obama, raising the prospect that the outgoing and incoming administrations would cooperate in selecting someone.
The president’s designee would disburse the short-term emergency loans to General Motors (GM) and Chrysler, which are at risk of financial collapse, and would directly supervise the reorganization plans that the auto manufacturers have agreed to carry out in exchange for government aid. The government also could receive warrants that would give it equity stakes in the companies.
The Ford Motor Company (F) announced Monday evening that it would not seek short-term federal aid, denying that it faced the same “near-term liquidity issue” as G.M. and Chrysler. ...[O]fficials expressed optimism that they would reach a deal and that Congress would vote on the package this week.
The progress in the Washington talks helped lift the stock markets...
By Jan. 1, according to the draft bill, the car czar would be required to develop benchmarks for assessing the automakers’ progress in carrying out the restructuring plans. The car czar would also have the power to convene meetings of an array of interested parties in the auto companies, including unions, creditors, suppliers, auto dealers and shareholders. ...
The White House had earlier proposed that the auto czar reside within the Commerce Department with the title of “financial viability adviser.” The Democrats’ draft would seem to allow the administration to do just that, and would not require Senate confirmation for the post. The Democrats’ draft legislation includes an array of stringent taxpayer protections. ...
Will Americans be more likely to buy cars from GM and Chrysler if they are part owners in the companies? Market share will be critical as car sales decline in coming months - output will have to fall - so will foreign carmakers move to protect themselves with offsetting subsidies, etc. of their own? I'm not comfortable with this for a variety of reasons, but losing that many jobs right now is not an attractive option, so there doesn't seem to be much of a choice.
One question to ask is how we ended up putting ourselves into a position where we could not allow firms to fail. There are lots of reasons, but if we had better social insurance, good enough so that the health and welfare of workers and their families was not threatened by the failure of the automakers, it would be a lot easier to avoid a bailout.
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largestSee all
increase in followers
in the last 7 days
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most active
Instabloggers.-
1
David Fry
-
2
TraderMark
-
3
Don Dion
-
4
Cliff Wachtel
-
5
Mike Havrilla
Top Instabloggers » -
1
-
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
CUT WAGES... PEOPLE ARE MAKING TO MUCH MONEY.
NO HEALTH CARE BENEFITS, UN LESS YOU BUY YOUR OWN.
NO PENSIONS, NO SOCIAL SECURITY BENEFITS, ONLY 401KS....(401KS YOUR MONEY BACK TO WALL STREET).NO WORK RULES..WHAT YOUR BOSS SAYS GOES.
WALL MART WAGES ONLY ALLOWED!
And most of us don't have it a fourth as good as these union workers who want to think we're all so stupid that we'll call reduced pay and benefits for people who aren't even there yet (new hires) some kind of concession.
There is a whole country full of people who work just as hard as they do that resent the entitlement mentality they are witnessing. Those of you who think you're speaking for the "working person" by defending those who have literally had the stupidity to drive their employers to the edge of failure, are not speaking for us. These autoworkers that seem to think they should command the same level of pay and benefits as many doctors and engineers offend most of us far more than the people you are defending.
This economy has been losing industrial jobs for decades now. It started where I'm from around 1980. What about all the people across this country who have had the experience of driving by a union picket line knowing that in their community there must be thousands of people a week driving by that would feel lucky to have those (strikers) jobs even at half the money they were already making and even without the benefits they already had?
You're defending the wrong people. By the way, I'm not a republican. I'm not some white-collar worker that gets to work in an office all day, either. What I am is a $9 an hour worker in an area where $9 an hour is pretty good money for what I do. I would be as ridiculous as the union autoworkers if I expected a lot more than I'm getting. The local economy wouldn't support it.
I'm a restaurant worker. Go ahead, knock it all you want. It gets 120 degrees most of the summer in a restaurant kitchen and I never take breaks. That's my choice, and the reason I've gotten many raises which I've never asked for. It's as hard as any job I've ever had and there aren't a lot of jobs in this area. I am 52 yrs old. I have worked hard all my life and not always doing what I do now. Whatever I ever manage to have I'll have to get ON MY OWN. And I'll probably still be working because I'll HAVE to be when I'm 70.
But you go right ahead and defend people making $50 an hour or more in wages and benefits. I'll tell you what. I'll have the money for a new car in a few more years. And I WILL NOT put ONE PENNY in the pocket of a $100,000 a year forklift driver.
This is the umpteenth time you have made the same post with the same sad story. Have a little pride! Stop being a chump! Your silly nonsense is playing right into the hands of the extremist-capitalist neo-CON anti-union anti-anybody-whos-not-... elite scumbags. Turn off faux news and free your mind from the owning class propaganda!
Work your fingers to the bone whadda ya get? Bony fingers!
Nothing to be proud of, not at all. Get a good union job and lift yourself out of poverty so you won't have to die in front of that grill!
You like to cook, apply to Harry Lundberg School. After the SIU union pays you to learn how cook, work and live on a ship you'll then be able to get your seaman's documents. You'll have a good union job where you make a good wage and good overtime, work four months on and and four months off, have paid vacation when your not on the ship! Retirement, medical, education all paid for.
Hey, you won't have to wait "a few more years" to become a good consumer again!
On Dec 09 06:45 PM consumeronstrike wrote:
> Most of us in this country need no calculations to know what we cost
> our employers. Our pay per hour is it. Period,
> And most of us don't have it a fourth as good as these union workers
> who want to think we're all so stupid that we'll call reduced pay
> and benefits for people who aren't even there yet (new hires) some
> kind of concession.
> There is a whole country full of people who work just as hard as
> they do that resent the entitlement mentality they are witnessing.
> Those of you who think you're speaking for the "working person"
> by defending those who have literally had the stupidity to drive
> their employers to the edge of failure, are not speaking for us.
> These autoworkers that seem to think they should command the same
> level of pay and benefits as many doctors and engineers offend most
> of us far more than the people you are defending.
> This economy has been losing industrial jobs for decades now. It
> started where I'm from around 1980. What about all the people across
> this country who have had the experience of driving by a union picket
> line knowing that in their community there must be thousands of people
> a week driving by that would feel lucky to have those (strikers)
> jobs even at half the money they were already making and even without
> the benefits they already had?
> You're defending the wrong people. By the way, I'm not a republican.
> I'm not some white-collar worker that gets to work in an office all
> day, either. What I am is a $9 an hour worker in an area where $9
> an hour is pretty good money for what I do. I would be as ridiculous
> as the union autoworkers if I expected a lot more than I'm getting.
> The local economy wouldn't support it.
> I'm a restaurant worker. Go ahead, knock it all you want. It gets
> 120 degrees most of the summer in a restaurant kitchen and I never
> take breaks. That's my choice, and the reason I've gotten many
> raises which I've never asked for. It's as hard as any job I've
> ever had and there aren't a lot of jobs in this area. I am 52 yrs
> old. I have worked hard all my life and not always doing what I
> do now. Whatever I ever manage to have I'll have to get ON MY OWN.
> And I'll probably still be working because I'll HAVE to be when I'm
> 70.
> But you go right ahead and defend people making $50 an hour or more
> in wages and benefits. I'll tell you what. I'll have the money
> for a new car in a few more years. And I WILL NOT put ONE PENNY
> in the pocket of a $100,000 a year forklift driver.
What part of " I'm 52 yrs old" did you not hear? And as far as going to sea I spent 12 yrs active duty U.S. Navy, thank you. I was a career man till a bad fall wrecked my back. I in fact could EASILY get 80-100 % disability if I tried. I'd rather work.
On other posts you claim to have some education. Ever take an economics class? You seem to think a WORLD full of people making the kind of wages and benefits the union autoworkers enjoy ( they damn well ought to enjoy them) would be sustainable economically. If you do indeed think that, I see no point in responding to you beyond this one time. I will not attempt to reason with irrational people. I'm sure many union people who read these posts like you very much.
Also, I think you sound like Lenin reincarnated.
" Let the ruling classes trmble...."
Now that was a rosy path he led them down, wasn't it?
I'm an auto worker...i also worked in a restaurant making a 1/4 of what my union job pays..let me tell you when i hired at GM there were two line of people.. one going in and the other coming out...If you or any one else never worked on the assembly line... you have no idea what it is like sure there are some easy jobs but most will break your back(climbing in and out of those cars) mess up your knees, wrist, shoulders...working in a restaurant is your choice. and as you say you've got many raises...then... you've been there a few years...IF YOU'RE SATISFIED WORKING IN A RESTAURANT FINE...DON'T BAD MOUTH THOSE WHO CHOSE TO MAKE MORE MONEY THEN YOU.
I know, thanks. I simply cant figure out why he's complaining with Reagan's Johnson so far down his throat!
WE NEED BUYING POWER NOT BORROWING POWER.
Indeed. That's why I had to get out of there. Everybody fighting about everything all the time. I refer to it as the Pepsi-Coke metric. A friend may more accurately describe it as "all booga booga all the time. Either way, exhausting! Thanks again.
Cost of goods sold as a percent of revenue:
2005: 88%
2006: 79%
2007: 93%
Stockholder's Equity: Not any more
Research & Development: Not a significant enough amount to be reflected on any of the last 3 years' income statements. Wonder why?
Working capital:
Huh?
Total current assets minus total current liablities. WORKING CAPITAL!
Huh?
Never mind.
On Dec 09 03:28 PM bosun.j wrote:
> It's a crying shame that Americans don't have the same courage that
> Thai people have. Were that the case the situation we're now in wouldn't
> have ended up plunging the planet into cultural and financial collapse.