Obama’s SOTU: GM is a Terrible Model for US Manufacturing

Perspective from a long-time UAW member, and member of Obama’s 98% (snort):

More at The Real News

Obama’s talking points on manufacturing really shouldn’t be given a free pass.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

59 comments

  1. Psychoanalystus

    I realize this is off subject, but is there any chance we’ll get some reporting on the fat cats playing in the snow at Davos?

  2. Atilla1

    my take:

    Obama is very much about doing piece meal change, maintaining status quo and pretend the whole move fix something, then print money.

    On automoble: the industry will face huge challange, moving from gasoline base to hybrid/electric and beyond. The type of engine and chasis material will be sufficiently different that the worker dislocation is real. factory, supply chain, infrastructure are all new investment.

    They make no effort thinking and creating viable strategy. They just hope the car execs will be clever enough to face the challange. But they won’t.

    1. ex-PFC Chuck

      To use the framing of the late USAF Col. John Boyd, Obama is the classic example of someone who wants to be somebody, not someone who does something. Here’s a pertinent passage from Robert Coram’s biography of Boyd, who was arguably the greatest strategic thinker and reformer in US history. The author is describing how Boyd, late in his active duty career, would try to recruit promising young, officers to his rabble-rousing cause before the system ground down their integrity:

      “… one day you will come to a fork in the road…. And you’re going to have to make a decision about which direction you want to go…. If you go that way you can be somebody. You will have to make compromises and you will have to turn your back on your friends. But you will be a member of the club and you will get promoted and you will get good assignments…. Or you go that [the other] way and you can do something – something for your country and for your Air Force and for yourself. If you decide you want to do something, you may not get promoted and you may not get the good assignments and you certainly will not be a favorite of your superiors. But you won’t have to compromise yourself. You will be true to your friends and to yourself. And your work might make a difference…. To be somebody or to do something. In life there is often a roll call. That’s when you will have to make a decision. To be or to do? Which way will you go?” p 285-286 (italics in the original)

      1. gnv377

        Whatever Boyd achieved was through a lifelong guerilla fight within the Dod beaurocracy supported by his acolytes. No sign of guerilla fight within the system today, bloggers are very much outsiders.

        1. Procopius

          We can’t really tell. Boyd was pretty much unknown outside the small circle of people in the Pentagon who are involved in program evaluation. We can hope and pray that there are people who want to do rather than be, still inside the system. For a more recent examination of how bad the situation is, see “The Pentagon Labyrinth” from http://www.cdi.org/pdfs/TPL_FullText_2.9.11.pdf. It’s a collection of 10 essays on what needs to be done. The prognosis is bleak.

    2. Lyle

      Its not clear that the transition from oil to electricity will happen before 2025 at the earliest. The efficiency standards have allowed ideas that the engineers have had for a while to get past the accountants that run the auto companies. For one example electric power steering, so you don’t have to run a hydraulic pump all the time. Some cars now come with engines that stop at idle. The auto makers will make 2025 with gasoline/diesel engines (diesel alone gets 20% better mileage than gasoline because the top combustion temp is higher).

      1. F. Beard

        (diesel alone gets 20% better mileage than gasoline because the top combustion temp is higher). Lyle

        Dang! You reminded me of my rotary diesel engine design that I am too lazy to patent.

      2. citizendave

        We could do it this year with off-the-shelf stuff, particularly with the Prius engine and drivetrain. My dream mobile is a two-seater flatbed truck with Prius tech, a roll cage, and plastic body panels. The batteries are arrayed in the flat bed, with about 25 square feet of photovoltaics on top of the bed. The passenger side is a module that is easily added or removed, giving us an extended bed length for long posts. Flex fuel. Curb weight is less than a ton. Marketing: Urban Light Truck. Give me that and I will stimulate the economy with my precious dollars.

        1. Atilla1

          The idea of urban/suburban pick up truck probably won’t exist anymore. Since an electric car can have as many motors as it has wheels, unlike gasoline engine, why always carry around flat back, powered by too big of an engine just to buy a carton of milk? Complete waste of energy.

          It will probably more like mini trailer truck, with stylish/2 seater sedan, plus detachable flatbed trailer. So if one doens’t need the flatbet, it’s detached, and the entire car is a light sub compact battery car. A sporty, high torque 2 seaters.

          If one needs flatbed to haul heavy load, the flatbed itself has its own engine and battery. The front passenger only act as driver.

          1. citizendave

            I like it. I would be willing to swap passenger modules, attach trailer, etc. We would want the lightest curb weight possible for running errands around town. I’m not sure about your trailer, however. I think we wouldn’t want a lot of hardware (dedicated trailer motor) sitting idle. On the other hand, it’s more weight to haul around on typical short errands, so maybe it would be worthwhile to have a motor sitting idle in the garage for the majority of the time. And I’d like the vehicle to be capable of highway speeds. Somebody brought an ethanol distiller machine to market a few years ago, shaped like a gas pump. They said you could brew ethanol with yard waste and table scraps (could be true). Could we put a small alcohol-burning combustion engine on the rig to run the motors in case of mid-trip battery depletion?

            I’m certain there is a market for a vehicle like this. At least there are two of us, eh?

        2. Lambert Strether Post author

          My dream mobile is a street-legal trike with a small motor for hills where I sit upright. It should cost $999.

          My use case is going to the mall. Via public transportation, it takes at least six hours if I stop at two stores. With the trike, it would take two, tops.

          1. Nathanael

            Sorry there’s no such trike; however, electric-assist bikes, including cargo bikes, exist in your price range.

    3. James

      Revolutionary technologies (and no, batteries powering lumbering 5000 lb hybrid hulks are NOT a revolutionary technology) in the auto industry will require immense amounts of R&D investment, most of which won’t be federally subsidized, and will result in more costly and less profitable vehicles for which there will be little initial demand, in spite of the fact that the green technology breakthroughs will be necessarily be modest and gradual all along the way. Will American CEOs in today’s economic environment have any incentive whatsoever to make such investments, other than for the obvious marketing value of claiming “look how green we are now?” No they won’t. The auto industry is hardly out of the woods yet, and is at it’s core doomed in the long run anyway, at least in its current incarnation. The incentives for all oil-based industries will, and in fact already have, switched from let’s find something better to let’s extend and pretend this mo-fo for as long as it lasts and take all the profits we can while there’s still some out there to be had. Don’t expect that to change anytime soon. The Repubes won’t change it and will tell you so. The Dems try to be coy about it, but they’re riding the same tired nag of a horse til the bitter end as well.

      1. Jimbo316

        Yes, you have it exactly. The fossil fuel future is no future and so aggressively moving to a more renewable energy path is obviously the way to go combined with rigorous energy efficiency and conservation. This country only thinks about supply and never about demand management where we could make huge savings.

      2. Nathanael

        Given the trends in economic inequality, Tesla Motors is the future of cars.

        Their electric cars will slowly get cheaper. And anyone who can’t afford a Tesla — *won’t be able to afford a car*.

        Demand for public transportation is already skyrocketing.

    4. Lafayette

      OMNIPOTENCE

      Obama is very much about doing piece meal change, maintaining status quo and pretend the whole move fix something, then print money.

      This is an observation that can be made of any PotUS.

      Regardless of either Obama’s motivations or his methods, GM is back as the world’s largest car maker. Do you think anyone still working at GM gives a fly’s fart of how we may construe that outcome as otherwise than beneficial?

      I’ll say it again – they who think that the PotUS as executive is omnipotent are hallucinating*. In fact, we designed our tripartite governance, a long time ago, with just that objective in mind – – to avoid a concentration of overbearing power in just one branch.

      As problems arise, they get fixed (more or less). Long-term trends are certainly more than just one four-year term. So, presidents should be judged (as regards performance) after their entire tenure in office. During their tenure, piecemeal judgments are just snapshots.

      History is holistic because it is interpreted over a long period of time.

      FOOTNOTE
      * Except for Dubya, who started an illegal war all by himself on the wholesale idiocy that WMDs were somehow hidden in the Iraqi desert.

  3. GrandmaBooBoo

    He’s made some good points, and it’s something that most of us 30+ workers came to realize about 1 yr after working at GM. GM’s management is and has always been…modeled completely after the federal government. It doesn’t take long for a lot of us to realize that we could (Mitt Romney favorite saying) FIRE about 20% of UAW workers, FIRE about 75% of management…and increase productivity by about 200% in a years time.

    I love the high speed rail ideas, unfortunately NO politician is going to promote it, NOT because of the auto industry, but rather because of Big Oil interests. The implimentation of high speed rail (and coming into the 21st Century as a world leader instead of follower) would create hundreds of thousands of new jobs at all levels of skill sets. The benefits to our environment would no doubt be incalculable.

    In essence, this man is correct, as a nation, we need to NOT be attempting to immulate GM….as GM has always immulated the Federal Government…and we’ve all seen how well THAT plan has worked out.

    1. sleeper

      And note how the Republican party line is to oppose high speed rail ?

      They all parrot the same talking points –
      Too costly (compared to what?)
      Too many cost over runs (seen any interstate projects come in on budget ? Think Big Dig)
      Wild accusations that rail lines will bring outsiders and transients.

      Granny your are right on the Republicans have sold this plank in their platform –

      It make makes no difference that rail transportation has worked and does work in other countries ( England, France, Germany, Japan)

      1. Carla

        We are AMERICANS! We do not ever, EVER learn anything from other countries. Look at our healthcare outcomes; we pay double per capita what other countries do for demonstrably worse results. And we’re happy to do so, because we’re the BEST.

      2. Al

        Borrow the money to buy a High Speed Train Set from China.
        Borrow the money to install the Chinese Steel railtracks and train the coolies to take the place of domestic Steel Workers- modelled after CALTRANS “Oakland Bay Bridge” Contract
        Borrow the money to Save the Airlines no longer carrying 2,500,000 passengers a year between LAX, FAT and FSFO.
        Borrow the money to Save Boeing and Airbus the orders for new planes are cancelled.
        Borrow the money to Buy new better cheaper planes from China
        Give US a break Fools

    2. Jim

      You want HSR? Fine, just assure me that no regressive taxes will ever be raised/created to finance it.

      If the 115 mile HSR route from Fresno to Bakersfield (65M per mile, or 7.5B total) can’t generate enough profit to pay down its debt/operating costs, EXPLICITLY promise the taxpayer that you won’t increase ANY regressive tax to cover the shortfall – that you’re ready to mothball the 7.5B project instead of throwing good money after bad.

      The truth is that many people realize that HSR makes no economic sense. But many pols see it as a boondoggle to reward their friends in the private and public sector at the expense of the working and middle-class taxpayer.

      The GOP had the bridge to nowhere.

      The Dems have the HSR to nowhere, at a significantly higher cost to taxpayers.

      1. citizendave

        At about 3:40 Frank Hammer talks about climate change, pointing out that the President seemed to be conceding to the climate change deniers in Congress by not taking a stronger position to move toward a clean energy economy.

        A society that understands climate science would want to shift the economy away from burning oil and coal. That would include shifting away from air travel and personal gasoline-burning vehicles, toward rail.

        A society that takes climate science seriously would stop regarding the bottom line as the only important criterion, and would include ethics and morality and all other externalities into the economic equation.

        Taking the long view, we will eventually build out a high speed rail infrastructure. The longer we wait, the more expensive it will be, and the more dislocation there will be.

        Some people believe we should fund an infrastructure bank with debt-free Treasury fiat money. Money created by spending into the economy would solve several problems. It should silence those who say we should continue to rely on burning gas and oil because we can’t afford to address the problems we face. And it would create many jobs, many of which would be permanent.

        It’s a mistake to view the Fresno-Bakersfield link out of context and call it unprofitable. It is part of a whole system that will take years to build. Are highways profitable? Transportation tax money should be shifted away from highways toward mass transit.

        1. Jim

          How often does VP Gore use rails instead of aircraft? How often does he use teleconferencing equipment to deliver speeches instead of chartering a Gulfstream to go halfway around the world? Does VP Gore live in more Sq ft today than he did one decade ago?

          If he really believes that carbon emissions are so pernicious, why have his emissions continued to increase. Does Al Gore take climate science seriously?

          And what about Richard Branson. For someone so “concerned” about the environment, why has he bankrolled ventures to send “tourists” to subspace?

          1. different clue

            It is something of a tragedy that people in visible leadership positions on the “solve global warming” front do not see the need to “walk the walk” in plain public view. The global either is or isn’t warming regardless of how big Gore’s carbon footprint is . . . but if he lived a visibly low-carbon-inputs lifestyle, doubters would see that he at least takes the problem seriously to bear witness to solutions in his own life. Unfair, I know.

          2. Nathanael

            Branson, like a number of the more “out there” rich environmentalists, wants to have a second planet in case this one gets irrevocably ruined, and is therefore trying to colonize Mars. (Yes, I think it’s crazy, but if you want to know the logic of the green-economy space-program types, there it is.)

        2. mac

          Many folks who want light rail and 40 mile electric cars would have been very happy with a horse and buggy and a mule to tend the farm.
          My parents were married in 1913 and went to their marriage in a horse and buggy. I guess they were “greeN” and should have kept the Horse and buggy!

    3. James

      One small caveat; the “Federal Government” has actually been a wholly owned subsidiary of 1% private sector interests for at least thirty years now, after it became an officially recognized strategy of the Neo-Conservative Reich (Grover Norquist, Karl Rove, and the rest of the College Republican brain trust) with the rise of Reagan’s Mourning in America. Yeah, I’ll admit the Dems have long since officially sold-out to the same mantra, but it’s still important to recognize that the government we have is the worst government – i.e., most profitable for guerrilla private sector interests – that fascist interests could provide. So abandoning anything to the “efficiencies of market based solutions” is most certainly not going to provide any better results. In fact, it’s exactly the response intended from the start.

  4. c1ue

    Sad really.

    This UAW ex-leader thinks that making high speed rail is going to somehow change transportation in the United States, when the only instances of a successful high speed rail business is a handful of routes between large, wealthy cities.

    I also like how alternative energy is supposed to be another path when the travails of the Volt are so public. Equally the massive subsidies feeding into solar, ethanol, and so forth get a pass because of ‘climate change’.

    The real travesty is that auto workers in Germany can apparently produce twice as much product and get paid twice as much. This is what the UAW should be focusing on.

    If all the ‘leadership’ of the UAW can do is bemoan losing a corporate battle, clearly the fault lies in more places than just the government intervention.

    1. run75441

      Yea, I read that article also. First much of German Labor benefits are mandated by law. Second the councils are made up of Gov, Union, and the companies. Third, I am not sure where the numeric cited is coming from in the article or what it is.

      “North American light vehicle production will increase 600,000 units, from 12.9 million this year (2011)to 13.5 million next year,” http://wardsauto.com/ar/2011_year_NorthAmerica_111024

    2. Jim

      The Volt – a transfer of wealth from the working poor (who are being asked to pay higher regressive gas taxes in many states – a tax which the Volt buyer doesn’t pay) to the affluent (via the federal + state tax credits which amount to 10K in many cases).

      Why the UAW would support it is beyond me, unless it doesn’t care about the working-class.

      1. James

        And an even more wasteful transfer of energy consumption as well from the obvious and in your face burning of hydrocarbons to the less obvious and in your face of electricity generated by coal, nuclear, natural gas, and/or hydro electric, most of which is lost in the act of transmission from generator to consumer. Not to mention, most of the manufacturing and mining techniques used to construct said vehicles are all still conventional as well. Electric is little more than a marketing shell game used to extend and pretend. Buy a hybrid because you love the impressive torque provided by an electric motor, but NOT because you imagine it somehow to be “green.” Green is a bicycle or, dare I say it, your own two feet, or simply, stay put and enjoy the day right where you’re at.

        1. Jimbo316

          Exactly, the energy trail of the volt leads back to coal-generated electricity and more climate change (via huge co2 emissions). Energy conservation and efficiency are the biggest short and long term routes. The petroleum-based economy is a quick dead end, both economically and in terms climate change impacts. The deniers will say it ain’t so; they are just screwing with the public.

          1. Nathanael

            Conservation and efficiency suffer from Jevons paradox; if you make more fuel-efficient gasoline-based cars, you end up with MORE demand for gasoline.

            It’s important to switch out the fuel source. If we suddenly have a boom in demand for electricity (for electric cars), we *can* supply this with solar panels. If we have a boom in demand for bicycles, or walking, or electric trains, that’s probably OK too! But we don’t want to create a demand for fossil fuels.

            Jevon’s Paradox is why, even though energy-efficient homes are *good*, it is *more* important to switch those homes *off* of natural gas and fuel oil heating onto a source which can be renewable. If making the homes more efficient makes it easier to get them off of fossil fuels, great; if it doesn’t, it’s not clear whether you should bother to make them more efficient!

        2. Nathanael

          Your numbers are wrong.

          Conventional gasoline engines are RIDICULOUSLY inefficient, with the best ones using 33% of the energy for motion, and 67% for heat. The BEST ones. This doesn’t account for the costs of gasoline refining (which loses a minimum of 20% of the energy in the crude oil) or transportation of gasoline.

          Electric engines are about 92% efficient, batteries about 80% efficient (charging and discharging and sitting), transmission lines about 90% efficient, and any fairly recent coal plant is about 50% efficient.

          Do the math. Even if you power electric plug-in cars with COAL you produce less carbon emissions per mile than gasoline cars. Of course, you can power them with solar panels on your house if you prefer.

          This is mostly because gasoline engines for cars are really spectacularly inefficient. Diesel engines are somewhat better, but not a lot.

          Using a diesel or gasoline generator to make electricity to power an electric engine (like the Chevy Volt does) is substantially more efficient, because the generator can run at its optimum, most efficient speed. Every “diesel” railroad engine does this as well: they’re all diesel generators running electric motors.

          But you still have refining losses and fuel transportation costs. The losses in electricity transportation over the wire are really quite small compared to the fuel burned moving oil in tankers to gas stations.

          And furthermore, small generators (like the one in the Volt) are inherently less efficient than huge generators, like the ones in a big power plant. (Note: this is only true for thermal-to-electric engines, not for photovoltaics or hydro, which are just fine in relatively small sizes, and not for heating applications.)

          This finishes the lecture. People need to know the real facts. Gas engines are so horrendously inefficient that it’s astounding anyone is still using them.

      2. different clue

        Since the Volt is what is called a “hybrid” car, meaning that it is gas AND electrically driven; the Volt buyer would indeed pay the same higher gas taxes as any other gas-burning car owner would pay . . . just not as much because the Volt owner would be buying not-as-much gas. The engine charges the batterypack when needed, and the batterypack drives the electric motor. Hybrid.

        1. different clue

          The purpose of hybrid technology is to extract and use or store-for-use the energy from the gas engine which is otherwise wasted in speedup from a standing start, idling, braking, etc.

          Properly designed, a hybrid car can get more motive energy strictly from gasoline than a non-hybrid car could get from the same gasoline.

          Anything “could” be on the other end of the socket. Coal, wind, solar, hydro, tidal, OTEC, etc. That’s a whole separate range of decisions.

    3. jonboinAR

      What “travails of the Volt”? It’s had a single incident where its battery caught fire 2 weeks after harshly destructive testing and after which testing the recommended/required battery discharge procedure was ignored. It’s “travails” consist in:

      1)the media playing into the hands of the right-wing determination that GM fail in order to exemplify that any government investing in the economy is doomed naturally;

      2)GM, not realizing what they have, the most, by far, innovative car since the days of Henry Ford, and failing to promote THAT successfully.

    4. Lambert Strether Post author

      Last I checked, LA and SF were large, wealthy cities. That’s not the ultimate route?

      FWIW, I see the construction start as driven by political considerations — modulo graft, CA’s incredibly powerful and pernicious car culture. Happy to defer to somebody with detailed knowledge on the ground.

    5. Nathanael

      You’re just wrong. High speed rail has been successful everywhere it has been tried, but particularly on dozens and dozens of very long routes in China, and on routes between big cities and frankly tiny cities in Spain. Try Wikipedia if you want an education.

  5. lidia

    STOP with the High-Speed Rail.

    I have lived in Italy, and what HSR means is that the rich gain speedy and cheap access from major city to major city, while the poor can no longer have access to shorter, slower tracts.

    PLEASE SEE Ivan Illich’s “Energy and Equity”.

    1. citizendave

      Last year my wife and I took the Eurostar from Rome to Florence and back, at a cost of 44 Euros per person each way. It was a pure pleasure. We could have taken the regional train, but it would have taken three hours, instead of just over one hour on the Eurostar — and the cost would have been much lower. We chose the fast train because our time was limited. But at least in that area, the slower regional train was an options.

    2. Nathanael

      That is illogical — ESPECIALLY for the US.

      We don’t even HAVE the slower trains you have in Italy. There is nothing to lose. What’s going to go away, Greyhound buses?

      Or is your view that we shouldn’t build nice things, because at first, only the rich will get them? That would have prevented building ANYTHING. EVER.

  6. citizendave

    Some conservatives actually like and support public transportation, especially rail.

    For example, “Moving Minds: Conservatives and Public Transportation” by Paul Weyrich and William S. Lind, extolls the virtues of public transportation, and addresses the objections usually raised by conservatives. Paul Weyrich was one of the founders of the Heritage Foundation, as well as other conservative think tanks. A document written by the authors, made available at freecongress.org, offers a summary of some of the points made in their book.

    http://www.freecongress.org/wp-content/uploads/2010/07/Conservatives-and-Mass-Transit-Complete.pdf

    The book and related materials are also useful for non-conservatives because the authors answer all the familiar objections to passenger rail.

    1. Nathanael

      Weyrich is dead. I think he was one of the last self-described conservatives who isn’t a rail-hater.

      Hating passenger rail has become another one of their shibboleths, their secret handshakes for admission to the “conservative academy”, along with worshipping Ronald Reagan and the “free market” and low capital gains taxes and opposing abortion (except for THEIR families) and so on.

  7. Kakko

    Wallstreet had a hand in many problems leading to the financial crisis, but Obama’s obliteration of bond covenants in the bankruptcy process hurt GM more than it helped GM.

    High speed rail is a great idea in theory. In Japan I can enjoy fast and cheap rail with trains so timely you can set your watch to.

    In practice, however, Americans cannot do high speed rail. California had Prop 1A in 2008. High speed rail for about $40billion, half of that being debt to be paid back. Now the estimated cost, in just 40 months, has gone to over $100billion. Even worse, high speed rail will add pollution and congestion in major traffic centers where fuel efficiency is lowest for most cars, while decreasing auto use on longer haul drives that are often carpooled. Before high speed rail can work, you need low speed rail to get to the high speed hubs, as we have in Japan. The problem is that what little low speed rail that does exist in California DOES NOT GET USED! Amtrak trains are sometimes on time, sometimes early, and sometimes 3 hours late.

    In short, the planning is inept, budgeting is inept, and implementation is inept. Even worse, they claim to accomodate over 400,000 permanent jobs and expect revenues of $2billion/year. Even if every job pays only $30,000, which in CA is the essentially the poverty level, they will only have $800million to operate machinery, account for depreciation, and pay back the $100 billion loan.
    Even if expenses were zero, they would not make enough money from revenue even to pay for the interest on the loans. Moreover the cost of 2 people riding would be 50% more than the cost of them driving, leaving little incentive to ride, except for businessmen riding on business trips.
    In short, high speed rail is a luxury for union workers and the elites, paid for by the tax payers who can’t afford to ride.

    1. Nathanael

      The current estimated cost of CAHSR is $65 billion in *current year dollars*.

      The $100 billion is a phony made-up number based on projections of future inflation rates — vastly excessive projections of future inflation rates. It’s a scam number designed to scare people, nothing more.

    2. Nathanael

      You’re also wrong about Amtrak California ridership (which is exploding). And you’re right about the problems Amtrak has keeping on time — being late hurts ridership massively, which makes it astounding how high Amtrak ridership is in California.

      Unfortunately the only way to have the trains run on time is to have separate passenger tracks — they’re delayed by the freight railroads which own the tracks. To get separate passenger tracks means building all-new tracks on all-new right-of-way, which means we honestly might as well build high-speed rail.

      As for local connecting services, LA has Metrolink and Metro, San Francisco has BART, Muni, and Caltrain, San Jose has the VTA, Sacramento has Sacramento RTD light rail, San Diego has Coaster (linking to Sprinter) and the San Diego Trolley, and I haven’t even started listing the buses.

      There’s enough connecting service. The HSR route has to get from the Central Valley to LA before any of that can be used, of course.

  8. JTFaraday

    obama obama obama

    I think the Republican’s “controlled bankruptcy” of GM is a GREAT model. It is a great model to impose on the Zombie banks.

    At least if I were Mitt Romney, that’s what I would do. It’s not like I don’t already have more money than God, and taking Obama’s great American hero laurels away from him and marching off into the pages of history would thrill me down to my long johns.

    God knows I have the skillz.

    1. John

      Worked the Rouge Plant Monday and Friday program back in the 70’s while going to Wayne State. Dearborn Assembly was real learning experience. I sure didn’t see solidarity. Had one honest UAW neighbor tell me that he wouldn’t support union wages for lots of lower paid services he depended on because that would lower his standard of living. Knew an old sit-down striker from the 30’s, Frank Carlson, long gone now, who went to union meetings back in the day and counseled members to buy GM stock with every penny they had left over each week and eventually have massive representation on the board of directors. That practice made him individually wealthy but nobody else could see the logic. The old confrontation model won out and we can see how effective that was. Somebody might try explaining to the UAW guy in the video that he’s simply at the bust-out stage of an industrial ponzi – get over it and move on. So who actually owns the means of production at this point anyway. Hard to keep up with that shell game.

      1. Nathanael

        Frank Carlson was a smart cookie. Cooperatives are in some ways the most robust economic structure.

  9. different clue

    So the legacy UAW member thinks that GM is a “terrible model” for American industry. That is beside the point of whether GM and Chrysler should have been forcibly cramdown bankruptcy restructured to save certain viable pieces as potentially viable concerns or not.

    I am just a layman but it looks to me like the choice we faced was to let GM and Chrysler go all the way into liquidation and most likely be sold for cannibalizable value
    from each and all of the facilities . . . or save some of those facilities as working factories. Which would have been the legacy UAW-member interviewee’s choice? Or would he lather us all with some ideologically-based “coulda woulda shoulda” blather designed to obscure the lack of any other third choice in existence at that particular time?

    This way, if GM and Chrysler-Fiat can entrench their survival so as to outlive the NEXT financial crisis; the UAW will still live to fight another day and maybe claw back some of their losses.

    If the UAW workers who still have their jobs can strangle back their standard of living enough to prepay the principal on their mortgages with fanatical intensity so as to OWN their houses ( if they can find out how to force the system to admit to the fact of who actually owns what aspects of the chopped-and-shredded “ownership” of those houses to begin with), and if they turn their houses and yards into fortresses of personal survival (roofwater harvesting systems, waterless humanure-harvesting compost-toilets, turning the yards into smart-gardens instead of stupid-lawns, etc.); then they will be ready to survive the next income-threatening financial crisis. If they refuse to take their one-last-chance to do that, they will have no sympathy from people who WOULD turn their houses into little fortresses of peasant subsistence if they could even have houses at all. And UAW members should think about just how many such people there are.

    About rail . . . I too would rather have a deep-penetration broad-coverage fairly speedy rail network with no high-speed rail anywhere than to have a few hi-speed trophy-prestige rail lines between a few big rich cities . . . and no rail for anyone else at all.

    1. Nathanael

      “About rail . . . I too would rather have a deep-penetration broad-coverage fairly speedy rail network with no high-speed rail anywhere than to have a few hi-speed trophy-prestige rail lines between a few big rich cities . . . and no rail for anyone else at all.”

      I wish that were our choice. In actual fact, our choices are:
      (1) A single high-speed rail line from San Francisco to Los Angeles, connecting to the severely depressed communities of the Central Valley; plus a fairly speedy rail network with broad coverage of the state of Illinois and parts of its neighbors, and parts of the Northeast and Mid-Atlantic, and one line in the Pacific Northwest;
      (2) nothing.

      #1 is the current High-Speed Rail program. The California line is the only “trophy” line, and it’s the only way to connect the Central Valley with LA. All the other lines (St. Louis-Chicago, Richmond-Raleigh, etc.) are simply “fairly speedy” rail, and they aren’t even broad coverage, more like minimal coverage.

      #2 is the current alternative being proposed by opponents of the high-speed rail program in Congress and the state legislatures.

      1. different clue

        Well, if those are the only two choices, then I would support the hi speed line for SF to LA IFF! my support guarantees my getting the minimal-for-now and build-out-in-due-time fairly speedy linkup of the midwestern cities. (With the east coastal cities joining in if they support the concept).

        By the way, we now have a plan to make the rail line between Detroit and Chicago fairly speedy over the next 3 years. Last summer when I took it we spent parts of it going at 15 miles per hour for a fistfull of various reasons.

  10. Eric377

    Hammer is in serious denial. Many senior debts were subordinated to the junior interests of the UAW in the bankruptcy. “Wall Street” would have been absolutely delighted had GM and Chrysler simply paid their creditors. The compensation practices of the Big 3 were significant headwinds to solvency. They were not the only ones, for sure. But to complain that the post-bankruptcy GM now model compensation on car manufacturers that did not go insolvent is simply pining for the glory days.

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