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“Let Detroit Go Bankrupt”: Mitt Romney In His Own Words

If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will  stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.

I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president  suddenly died. The company itself was  on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad  work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have  several prescriptions for Detroit’s automakers.

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements  to align pay and benefits to match those of workers at competitors like BMWHonda,  Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers  is not higher than that of foreign producers.

That extra burden is  estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has  done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.

Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.

The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”

You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate  the destructive labor relations  of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.

The need for  collaboration  will mean accepting sanity in salaries  and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.

Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years. Starving research and development is like eating the seed corn.

Just as important to the future of American carmakers is the sales force. When sales are down, you don’t want to lose the only people who can get them to grow. So don’t fire the best dealers, and don’t crush them with new financial or performance demands they can’t meet.

It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research — on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending  to $20 billion a year, from the $4 billion that is spent today.  The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the imbedded tax penalties that favor foreign carmakers.

But don’t ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost.

The American auto industry is vital to our national interest  as an employer and as a  hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.

In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.

By: This article originally appeared in The New York Times on November 18, 2008, written by none other than Op-Ed Contributor, Willard Mitt Romney, a current candidate for the GOP Republican Presidential Nomination

February 3, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

Mitt Romney, “A Well-Oiled Weathervane”: Character And Core Values May Be His Downfall

More than most elections, the contest for President this fall is likely to be decided less on “wedge issues” — or even candidate positions that are symbolic of who is on whose side — and more on the character and core values of the candidates — and for that matter on the question of the core values of the society we hope to leave to our children.

Last Friday, speaking to the Democratic Caucus Policy Conference, Vice-President Joe Biden told a story that speaks volumes about the character of Barack Obama.

According to Biden, the day before he ordered the raid that finally stopped Osama Bin Laden, President Obama met with his top national security advisers in the Situation Room.  At the close of the meeting, he went around the room asking each person for his or her recommendation on whether to launch the risky nighttime mission.

As it went around the table, Leon Panetta recommended that the President proceed.  Most of the others expressed reservations and handicapped the odds of success as only fair.  Finally, the President got to Biden who said he recommended not proceeding until two additional steps were taken to enhance the odds.

Then the President stood and told his advisers he would let them know of his decision in the morning.

The next day, as Obama stepped onto his helicopter to leave on a day trip, he turned to his National Security Adviser, Tom Donilan, and issued a simple order: “let’s go.”

Much more was at stake in the Bin Laden mission than success or failure killing or capturing the most wanted fugitive of modern times.  In some respects Obama’s Presidency itself was at stake.

To quote Biden, “The President has a backbone like a ramrod.”

Whether or not you like all of his policies — or all of his decisions — it’s hard to argue that Barack Obama is not a tough, decisive guy — a guy who is guided by solid core principles and has a disciplined, laser-focused will. This is not a President that flip-flops in the political wind or is swayed by the last person who talks to him.  Above all, Barack Obama is centered.  He has a solid core built around strong core values.

America — and the rest of the world — have seen those character traits over and over again during the last four years.

They saw them when he announced his candidacy to become the first African American president of the United States — and then organized the highly disciplined, leave-no-stone-unturned campaign that elected him 2008.

They saw that same inner toughness in his — at the time unpopular — decision that saved the American auto industry.

In early 2009, Obama simply refused to throw in the towel on health care reform, when the election of Senator Scott Brown made it appear impossible to succeed — and he won.

Later that year, Obama’s force of will guaranteed the passage of Wall Street reform and the creation of a Consumer Financial Protection Bureau.  And his willingness to just say no to Republican obstructionism last month by making a recess appointment of Richard Cordray, guaranteed that American financial institutions — for the first time — have a regulator dedicated solely to looking out for the interests of everyday consumers.

Obama has remained determined and unflappable in the face of the toughest economic and political environment in sixty years and has emerged from three years of battle ready to wage a highly organized, focused campaign this fall that will center on most fundamental question facing our society: whether we will have a nation where we look out for each other, and have each other’s back — or a society where we are all in this alone.

Obama intends to make this campaign a battle over core values — a choice between a society where we are all responsible for our future, and for each other — or a society where selfishness is our highest value — where “greed is good.” His campaign will frame the choice before America as whether we have a government dedicated to defending privilege — or one whose mission is giving everyone a fair shot, a fair share, and a guarantee that we all have to play by the same set of rules.  His campaign will be about reigniting the values that underlie the American Dream and the hopes of the middle class and all of those who aspire to it.  It will be about restoring fairness and opportunity and hope.

Contrast that kind of President — and that kind of campaign — with Obama’s likely opponent, Mitt Romney.

Right after the 2004 election I was riding in a New Jersey taxicab. The driver was a typical male New Jersey cabbie.  “So what do you think of Corzine?” I asked.” “Oh, Corzine, tough guy.  Like him,” he replied about the then-Senator.

“What do you think of Bush?”  I said.  “Like him too.  Tough guy.  Stands up for what he believes,” came the answer.

“How about Hillary Clinton?”  I asked.  “Tough gal.  Like her,” he said.

“What about Kerry?”  I asked.  “Kerry?  Can’t stand him.  Flip-flopper–a phony.”

Ideology, policy positions — none of that mattered to this cabdriver who liked Corzine, Clinton and Bush.  He wanted a tough, committed leader.  But the Republicans had convinced him of its central message — “John Kerry is a flip-flopper–a phony.”

Bush strategist Karl Rove had sold that version of Kerry — a Senator who in fact has strong core values — largely because of his tendency to “Senate-speak.” He also realized that Kerry’s vote for the Iraq War, and then against continued funding in 2004, could be portrayed as the symbolically powerful flip-flop.  The icing on the cake was Kerry’s explanation of the 2004 vote: “I voted for it before I voted against it.”  Rove illustrated his flip-flop message with an iconic commercial that featured pictures of Kerry windsurfing and tacking one way and then another.

Kerry’s perceived lack of core values was the factor that, more than any other, led to George Bush’s second term as president.

Voters want leaders who believe in something other than their own election.  Quite correctly they want leaders with a strong moral center. They want leaders who make and keep commitments to their principles and to other people. And they want to know that the candidates they support are the leaders they will get after the election — not, as John Huntsman said of Romney, “a well-oiled weathervane”.

Romney has never seen a position he couldn’t change if he determined it would be to his advantage to do so.   He thinks of politics as a business marketing project, where you say what you think you need to in order to maximize sales. Romney doesn’t think of voters as citizens to be engaged — he thinks of them as customers to be manipulated.

As Massachusetts Governor, Romney was pro-choice — now he is anti-choice.

Romney was the author of the Massachusetts health care plan that in many respects served as the model for Obama’s own health care plan.  Now he wants to repeal “Obamacare.”

Romney once refused to sign the “no new tax pledge.”  Now he has signed the “no new tax pledge.”

Romney favored extension of the assault weapons ban.  Now he opposes extension of the assault weapon ban.

Once he said the TARP “was the right thing to do.”  Now he says he opposed it.

Right after the economy collapsed he said he favored an economic stimulus program; now he says he opposed the stimulus bill.

Once Romney said he believed that human activity contributed to global warming; now he says he doesn’t think we know what causes global warming.

One day he was emphatically neutral on Ohio Governor Kasich’s union-busting legislation — that was ultimately “vetoed” by the Ohio voters.  The next day he one hundred percent supported that legislation.

Romney is a guy who, when called on his flip-flops and inconsistencies, said: “I’m running for office, for Pete’s sake.”

The reason Romney is having such a difficult time making the sale in the Republican primary contest is that many Republicans don’t think he has strong core beliefs, don’t trust him and think he’s a phony.

Wait until he has to convince swing voters that he’s anything more than a “vulture capitalist” who will say anything and do anything to make the biggest deal of his life — the “acquisition” of the government of the United States of America.

But, you say, maybe he will flip-flop back into a more “moderate” Mitt Romney if he becomes President.  Don’t bet on it.  People who have no core values will sell their services to the highest bidder.  Romney’s Presidency has already been sold lock, stock and barrel to the big Wall Street banks, the CEO class, the multi-millionaires who are behind his super PAC and the Republican Establishment that have financed his campaign.

In fact, throughout his career, Mitt Romney has demonstrated that his only “core value” is his own financial and political success. In Romney’s view, both in politics and in business, every other belief or commitment can be thrown overboard if it weighs him down in his quest for success.  And that goes for the people and communities that were impacted by the “creative destruction” of his corporate takeovers and leveraged buyouts at Bain Capital.  To him, they were apparently nothing more than “collateral damage.”

In the end, it is likely that the ultimate irony of the Romney campaign will be that his own willingness to toss aside positions and values that might at one time or another have appeared inconvenient, will ultimately weigh him down more than anything else.

 

By: Robert Creamer, The Huffington Post, January 29, 2012

February 1, 2012 Posted by | Election 2012, GOP Presidential Candidates | , , , , , , , | Leave a comment

Michele Bachmann’s Views, Not Her Headaches, Make Her Unfit

There is no doubt that Michele Bachmann gives many of us a headache. But to attack her, as Tim  Pawlenty has done in such a sexist way, as unfit to be president because of  migraines is absurd.

Many of our presidents have had health problems much more  serious than headaches—Roosevelt,  Kennedy, Taft, to name a few.

The problem with Michele Bachmann is not her migraines, it’s  what is in her head. It’s her ideas that  matter.

Just as Republicans who pay attention to politics were  terrified of a possible Sarah Palin nomination, they are equally petrified that  Bachmann might catch on in Iowa, South Carolina, and among the Tea Party  wing. Could she, in fact, squeak by and  actually win the nomination? Most think  not, but they are nevertheless nervous when they watch her poll numbers rise,  her bank account fatten, and the attention she is getting from the “lame stream  media” increase.

There is no question about her misstatements and problems with facts (John Wayne’s birthplace, associating Jimmy Carter with swine flu,  Founding Fathers working “tirelessly” to end slavery, maintaining that Obama  issued “one oil drilling permit” when he issued 200, etc., etc.). Check out the Pulitzer Prize winning website Politifact for a disturbing list.

The real problems we should be focusing on are her  outlandish and dangerous views on the issues.

Some are becoming very well known. Her views on gay and lesbian rights, for  example. She believes gays and lesbians are “part of Satan.” She and her husband have mounted campaigns  against gays and lesbians, beginning in Minnesota and now on the campaign  trail.

She was against TARP and proudly proclaimed her opposition  in the New Hampshire debate. Most  economists believe that this saved the American economy from complete meltdown  and a severe depression. Plus, most of  the money is being paid back, and we have a strong American auto industry  because of the actions of President Bush and President Obama.

She believes we should not only abolish the entire tax code,  but we should abolish the Environmental Protection Agency, the Department of Education,  the Department of Energy and the Department of Commerce. (Politico 4/18/2011, among numerous other  sites) This is irresponsible,  shortsighted, and destructive to the United States.

I find it extraordinary that Michele Bachmann should be  even considered for the office of the presidency. Her views, her lack of competence and  experience, and her minimal leadership skills all are much more worrisome than her  headaches. Actually, just watching her out there makes my head spin.

By: Peter Fenn, U. S. News and World Report, July 25, 2011

July 27, 2011 Posted by | Conservatives, Debt Ceiling, Democracy, Economic Recovery, Economy, Education, Elections, Equal Rights, GOP, Ideologues, Ideology, Iowa Caucuses, Politics, Republicans, Right Wing, Teaparty, Voters | , , , , , , , , , , , , , , , | Leave a comment

Big Government Bailout Worked

Don’t expect to see a lot of newspapers and Web sites with this headline: “Big Government Bailout Worked.” But it would be entirely accurate.

The actual headlines make the point. “Demand for fuel-efficient cars helps GM to $3.2 billion profit,”declared The Post. “GM Reports Earnings Tripled in First Quarter, as Revenue Jumped 15%,” reported the New York Times.

Far too little attention has been paid to the success of the government’s rescue of the Detroit-based auto companies, and almost no attention has been paid to how completely and utterly wrong bailout opponents were when they insisted it was doomed to failure.

“Having the federal government involved in every aspect of the private sector is very dangerous,” Rep. Dan Burton (R-Ind.) told Fox News in December 2008. “In the long term it could cause us to become a quasi-socialist country.” I don’t see any evidence that we have become a “quasi-socialist country,” just big profits.

Rep. Lamar Smith (R-Tex.) called the bailout “the leading edge of the Obama administration’s war on capitalism,” while other members of Congress derided the president’s auto industry task force. “Of course we know that nobody on the task force has any experience in the auto business, and we heard at the hearing many of them don’t even own cars,” declared Rep. Louie Gohmert (R-Tex.) after a hearing on the bailout in May 2009. “And they’re dictating the auto industry for our future? What’s wrong with this picture?”

What’s wrong, sorry to say, is that you won’t see a news conference where the bailout’s foes candidly acknowledge how mistaken they were.

The lack of accountability is stunning but not surprising. It reflects a deep bias in the way our political debate is carried out. The unexamined assumption of so much political reporting is that attacks on government’s capacity to do anything right make intuitive sense because “everybody knows” that government is basically inefficient and incompetent, especially when compared with the private sector.

Government failure gets a lot of coverage. That’s useful because government should be held accountable for its mistakes. What’s not okay is that we hear very little when government acts competently and even creatively. For if mistakes teach lessons, successes teach lessons, too.

In the case of the car industry, allowing the market to operate without any intervention by government would have wiped out a large part of the business that is based in Midwestern states. This irreversible decision would have damaged the economy, many communities and tens of thousands of families.

And contrary to critics’ predictions, government officials were quite capable of working with the market to restructure the industry. Government didn’t overturn capitalism. It tempered the market at a moment when its “natural” forces were pushing toward catastrophe. Government had the resources to buy the industry time.

What’s heartening is that average voters understand that broad assaults on government provide better guidance for the production of sound bites than for the creation of sensible public policy. That’s why House Republicans are backpedaling like crazy on their plans to privatize Medicare — even as they pretend not to.

Conservatives really believed that voters mistrusted government so much that they’d welcome a chance to scrap Big Government Medicare and have the opportunity to purchase policies in the wondrous health insurance marketplace. Don’t people assume that anything is better than government?

But there were deep potholes on the road to a market utopia. Put aside that the Republican budget wouldn’t provide enough money in the long term for the elderly to afford decent private coverage. The truth is that most consumers don’t have great confidence in the private insurance companies, with which they have rather a lot of experience.

When it comes to guaranteeing their access to health care in old age, most citizens trust government more than they trust the marketplace. This doesn’t mean they think Medicare is without flaws. What they do know is that Medicare does not cut people off in mid-illness and that its coverage is affordable because government subsidizes it.

It’s axiomatic that government isn’t perfect and that we’re better off having a large private sector. It ought to be axiomatic that the private market isn’t perfect, either, and that we need government to step in when the market fails. The success of the auto bailout and the failure of the Republicans’ anti-Medicare campaign both teach the same lesson: The era of anti-government extremism is ending.

By: E. J. Dionne, Opinion Writer, The Washington Post, May 8, 2011

May 9, 2011 Posted by | Big Government, Budget, Congress, Conservatives, Economic Recovery, Economy, GOP, Health Care, Jobs, Journalists, Labor, Media, Medicare, Politics, President Obama, Press, Pundits, Republicans | , , , , , , , , , , , | Leave a comment

The Most Under-Covered Success Story Of The Obama Era

About two years ago, NBC News establisheda tough benchmark: “As the GM bailout goes, so goes the Obama presidency.”

With that in mind, Jonathan Cohn offers us a helpful update on where things stand.

On Thursday General Motors announced that, for the fifth consecutive quarter, it had made a profit. And not just a measly one, either. The $3.2 billion was higher than experts had predicted and more than three times the profit of the same quarter in 2010, when the company was still struggling to emerge from its bankruptcy.

GM sales in North America were up 25 percent over that period. That reflects the recovery, obviously, but the increase in GM sales was still larger than the industry average. Even if GM can’t keep up that pace, it’s a sign of increasing health.

Still, the most interesting part of the news is not the profit itself. It’s how GM made it.

Right. After the federal intervention to rescue the automotive industry, GM shifted its focus, reducing excess capacity and developing a better lineup of fuel-efficient cars and crossover vehicles. It’s proven to be quite successful.

Cohn noted that GM recovery has not been flawless, and the transition has been painful for many. He concluded, however, “[I]f not for the Obama Administration’s intervention, the entire American auto industry might very well have collapsed and taken the Midwest with it. Instead, the industry is on the rebound, at least for now. That’s not bad for government work. Not bad at all.”

I’d just add, from a purely political perspective, that Republicans still consider this a failure. As far as the right is concerned, the Obama administration’s rescue of the American automotive industry wasn’t just wrong, it was one of the president’s most dreadful mistakes. Confront conservatives with reports like the latest from GM, and the response tends to be that the success of the policy doesn’t change anything.

The thesis about the right valuing ideology over practical results needs no better example.

By: Steve Beden, Political Animal, The Washington Monthly, May 5, 2011

May 6, 2011 Posted by | Bankruptcy, Democrats, Economic Recovery, GOP, Government, Ideology, Journalists, Media, Politics, Press, Republicans, Right Wing | , , , , , | Leave a comment