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Week of 1 June 2009

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Monday, 1 June 2009
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10:25 - It's official. GM is bankrupt. So let me be the first to ask the question that no one seems to be asking. Exactly what was accomplished by the billions of taxpayer dollars spent on the bailouts of Chrysler and GM? How would things have been any different if last autumn these two companies had simply been allowed to go into bankruptcy without being given any taxpayer dollars? How is Chapter 11 reorganization ultimately going to be any different from Chapter 7 liquidation?

The most likely answer is that there won't be any difference, because the probable eventual fate for both of these companies is liquidation, or something very like it. According to the articles I'm reading, the break-even point for the "new" GM is cars selling at a 10 million annual rate, and that assumes that GM holds its pre-bankruptcy market share. How likely are total annual car sales to equal or exceed 10 million, at least over the next two or three years? And, even if total car sales are sustainable at 10 million annually, how likely is GM to hold its pre-bankruptcy market share?

I'm betting that in retrospect it will be obvious that this whole GM mess was a case of too little, too late. GM is cutting with a scalpel when they should be cutting with a meat-ax. It's like a surgeon who needs to amputate a leg starting by cutting off toes one at a time. What's the point, for example, to keeping GMC? They should have focused on Chevy trucks and cut GMC loose. Same thing with plants. They should have closed a lot more plants, including as many as possible in union states, in preparation for voiding union contracts and having the UAW decertified. GM should be focusing on relocating production to right-to-work states in the Southland. And their dealership cuts are simply ridiculous. They should have started by cutting 75% of their dealers immediately and then started looking for additional cuts. GM has to face the fact that, if it survives at all, it's going to survive as a minor player.

10:58 - This is interesting. Despite the fact that I'm an extremely heavy user of Netflix--my usage is the maximum that is theoretically possible, short of returning discs the same day I get them--and that they accordingly can be expected to throttle me and to give others first preference on popular discs, today they're shipping me disc 1 of series 4 of Weeds, which isn't officially released until tomorrow. I suspect in this case my fast turnaround is a good thing as far as Netflix is concerned. They know I'll get the disc tomorrow and return it the following day. For popular, newly-released discs, they have to balance turnaround time against the number of copies they need to buy. Ordinarily, they like people who get a disc and keep it a long time, but for popular new discs shipping the disc to such people means they'd have to buy more copies than they probably want to in order to keep wait times reasonable for the other people who want the disc.


Tuesday, 2 June 2009
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11:00 - In reading most of the articles about GM, I find myself wondering whether the people who wrote them are stupid, ignorant, or have been pressured or deluded by the government to paint a rosy picture of the future of GM. I saw half a dozen articles yesterday, all of which were attempting to reassure people that it was okay to buy a GM vehicle. Sure it's okay, if you're an idiot.

Why would anyone with any sense at all buy a vehicle from a bankrupt company that had a reputation for poor quality even before the economic crash? There are plenty of car companies out there that haven't taken government money, aren't teetering on the edge of bankruptcy, and have much better reputations for quality than GM (or, come to that, Chrysler). What conceivable upside is there to buying a car of questionable quality from a bankrupt company? Why do these writers not point that out?

GM and Chrysler are government-funded ratholes. The only question is how long the government will continue to subsidize them before it lets them collapse. My guess is that the government will continue pouring money down those ratholes at least until the 2010 mid-term elections, and probably through the 2012 presidential election, to ensure the UAW vote.

The government claims it won't. It claims that the recent cash infusion to GM is the last government money that will be given to GM. I don't believe it. Just look at Amtrak. The government bailed it out in the early 70's, claiming that it would become self-sustaining within a few years. Here we are, nearly 40 years later, and the government is still pouring money down that rathole. The only thing that'll prevent them from doing the same with GM and Chrysler is the much larger scale and the fact that it will soon become abundantly evident even to people with room-temperature IQs that it isn't going to work. The question is, how much more money is the government going to waste before it admits that?


Wednesday, 3 June 2009
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08:41 - We watched the first disc of Weeds series 4 yesterday. It was okay, but not nearly as good as earlier series. I'll give it a B. It was still well above average, but it seems to have lost something in the new season.

Barbara commented on an article in the paper this morning. In 1994, a local woman was beaten nearly to death by her husband, who subsequently in a letter from prison threatened to kill her and her children when he was released from prison. He's now out of prison, and she's rightly worried that he'll make good on that threat. As I told Barbara, she should apply for a restraining order.

Barbara scoffed, of course, because restraining orders are notoriously ineffective at protecting people from those who threaten them. But that's not really what they're for. Issuing this woman a restraining order is, in effect, giving her a state-sanctioned license to kill the SOB if he turns up anywhere near her. The government can't protect her. She'll have to protect herself. The only practical way for a woman to do that is to shoot her would-be attacker before he gets her. Having done that, she'll be arrested for homicide. But the restraining order gives her a literal get-out-of-jail-free card. No prosecutor is likely to pursue the matter. If he does, no jury is likely to convict her.

In fact, they should rename "restraining order" to "murder permit" and make sure the subject of those orders is aware that his intended victim now has a murder permit and can shoot him if he gets near her. Come to think of it, it might not be a bad idea to issue a shotgun and a few rounds of buckshot with the murder permit.


Thursday, 4 June 2009
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10:20 - With Obama telling the world that the US is a friend to Islam, the mullahs must be laughing up their sleeves. And now that Obama has nationalized GM, Venezuelan communist dictator Hugo Chavez says Obama is to the left of him and Castro. Eight years of the Bush administration made American voters desperate for change. Unfortunately, they lost sight of the fact that change isn't necessarily for the better. So now we have Obama wrecking the country, aided and abetted by Pelosi, Reid, and the rest of the Democrat leadership. It's Bush's fault, of course, that Obama even had the opportunity.

But now we all get to watch over the next few years as Obama does his level best to destroy capitalism, and with it our economy. Not to mention crippling our military and making deals with our enemies, people who would like nothing better than to destroy us and our way of life. McCain certainly wasn't a good alternative, but he was worlds better than Obama. As this debacle unfolds, the only bright spot is that a lot of people who voted for Obama and the Democrats are likely to realize their mistake. We can hope that'll happen before the 2010 mid-term elections, and certainly before the 2012 presidential election. Perhaps we still have time to change course before Obama drives us over the edge. But we don't have much time, and the outcome is by no means certain.


Friday, 5 June 2009
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08:42 - We're becoming a bit waterlogged around here. In May, we had something over 10 inches (25 cm) of rain. Already this month we've had more than 6 inches (15 cm), with 4 inches of that overnight. It's still raining and looks to continue doing so for at least the next several hours. Call it another 10 cm. The Kerr Scott Reservoir, which was built to supply Winston-Salem with water, has dumped something like 20 feet (6 m) of water in the last few days, which is probably a couple of years' worth of water for Winston-Salem.

The only remaining evidence of the years-long drought in North Carolina is that the water table is still below normal, although that situation is improving rapidly. Not that Winston-Salem itself was ever threatened by the drought. Other North Carolina cities, including our sister-city Greensboro, were in dire straits at the peak of the drought, but Winston-Salem has the Kerr Scott Reservoir, for which some forward-thinking people many years ago chose to grossly overbuild capacity. Kerr Scott feeds the Yadkin River, from which Winston-Salem draws its water supply. A few years ago, during the worst of the drought, the flow of the Yadkin River was at its lowest since records began being kept in the middle of the 19th century. Even then, the Yadkin River was supplying more than five times as much water as Winston-Salem needs for normal consumption.

Things got so bad during the extended drought that Greensboro, about 30 miles to our east, came close to running out of drinking water, literally. The Winston-Salem and Greensboro governments built a pipeline running from Winston-Salem to Greensboro to supply emergency water. It's not large enough to supply the full needs of Greensboro, but it is large enough to supply sufficient water to Greensboro for residential use the next time their own reservoirs run dry.

What's interesting is that the Winston-Salem government didn't hold up Greensboro for ransom when they were desperate. Greensboro would have paid just about any price for water, but Winston-Salem charged Greensboro only something like $20,000 per month, a small fraction of the rate Winston-Salem residents pay for water. But fair is fair, and neighbors are neighbors. I'm sure if the situation had been reversed, Greensboro would have done the same.


Saturday, 6 June 2009
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08:55 - Happy Birthday to me. Today I turn 56, although I prefer to think of it as 0x38. Of course, sometimes I feel more like 070.

10:36 - Uh-oh. Barbara said I could have anything I wanted for my birthday. I told her I wanted us to have a Firefly Marathon, watching all 14 episodes today. (Barbara didn't mind watching Firefly once, but she refuses to watch it again.) She agreed to do it, which immediately made me suspicious. Then she pointed out that on her birthday, she wanted us to watch all 41,243 episodes of Brideshead Revisited. Well, perhaps it only seemed to me that there were that many. IMDB claims there are only 11 episodes. We watched it over the course of two or three days, but it seemed like years. I remember celebrating when we finished watching the final episode, and swearing never again.

I despised that series. In fact, I despised it so much that I refuse to watch the 2008 remake, which stars Emma Thompson. Ordinarily, I'd watch Emma Thompson read the phone book, but I have to draw the line somewhere. So, no Firefly Marathon for me.


Sunday, 7 June 2009
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Copyright 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009 by Robert Bruce Thompson. All Rights Reserved.