NOW WHAT SHOULD WE EXPECT?

NOW WHAT SHOULD WE EXPECT?
With the election of Senator Barack Obama to be our country’s 44th President, a lot of the DC establishment is now trying to figure out what’s next? Most of these folks have nothing better to do than to offer their advice on how good/bad things are in the country. They are typically former journalists, academics, or campaign staffers. They have never created a job, made a payroll, or done much more than pushing some paper around. With the end of the campaign, in order to stay on tv or to be quoted in stories in the Washington Post, they offer their suggestions as to who should make up the new White House staff or cabinet, or what industry the taxpayers should bail out next.
President-elect Obama’s first personnel announcement was that Representative Rahm Emanuel would be his chief of staff. This announcement was met with some questions from Republicans and leading conservatives. Both Minority leader John Boehner and conservative advocate Sean Hannity thought it was a bad signal to send if the Obama administration was serious about all the bi-partisan claims that they announced during the campaign. I think the pick of Emanuel is a great choice. Representative Emanuel spent a lot of time in the White House during the Clinton Administration. He understands the workings of the White House and understands the workings of the federal government. He also has extensive relationships and experience on Capital Hill. This knowledge should help the administration push its agenda and potentially get things done. While Emanuel is a democratic partisan, who did the Republicans think the Obama administration would pick? A Republican? Representative Emanuel was a supporter of welfare reform and free trade during his time in the Clinton Administration. Aren’t these priorities of the Republicans? He has shown an ability to get things done in Washington and isn’t afraid to go against some of the Democrats largest contributors.
As the Obama administration starts to announce their choices for certain staff positions within its administration, I think it would be wise of the Republicans in Congress and conservative pundits to study the policy positions they have but not to denounce the pick without any examination.
One big issue that is currently being debated here in Washington is the potential “bail out” of the Detroit Three. The former Big Three auto companies claim that they need federal support in order to stay out of bankruptcy. Already the Congress has approved $25 billion to help them convert to more fuel efficient cars. They are also asking for as much as $50 billion more to allow them to stay in business. The biggest problem facing the automakers is the incredibly high legacy costs associated with each car produced. Some estimates value these costs at as much as $1,500 per vehicle. These costs include health care and pension liabilities for the workforce. Many retired auto workers do not have to pay a co-pay on their prescriptions or doctor visits. Everyone else pays a small co-pay for these services. Would it be too much for the UAW to agree to have its members pay a small co-pay to reduce some of the health care costs of the Detroit Three?
The big issue surrounding the debate in Washington is if the taxpayers provide the funds to keep them out of bankruptcy, what changes in the business model will they implement so that they don’t run into these problems in a year or two? Most of the conditions being discussed on Capital Hill have to do with executive compensation and bonuses. Nothing about restructuring their contracts with the UAW, nothing about issued such as the job banks that allow workers to not work, but still take home their salaries. Without a complete restructuring of their business models, the Detroit Three are not likely to be successful. Foreign automakers are building cars throughout the US, particularly in the south. Whether it’s Toyota, Honda, or BMW, foreign automakers are building cars more suited to today’s economy. They have less overhead costs to pass onto the buyer of their products.
Folks in Detroit are worried about their futures, and they should be worried. For too long, Detroit’s automakers did not believe that foreign competition was actual competition. Once Toyota and Honda became legitimate alternatives, the Detroit Three decided on the strategy of blaming the American public for not buying their products, then making bigger cars that do not get very good gas mileage, and now begging Congress to bail them out. Not once have they looked at their business models and decided to take the hit now to eliminate some of the problems facing it.
Do we really want Congress to be making decisions as to the business models of the automakers? They have a hard enough time trying to pass a budget, how are they going to make the needed, hard decisions to try and make the auto companies more competitive? The Detroit Three need to look at themselves and decide what they should do to make themselves competitive. They are the only ones that can do this. They should know the business and their customer needs better than anyone else. They have to adjust their products to fulfill the needs of the American public. The taxpayers should not be responsible for the failure of the auto companies to make the tough but needed decisions.