Week of 1 June 2009
Update: Saturday, 6 June 2009 10:36 -0500
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?
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.
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.
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
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?
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
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.
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
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
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.
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.
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.
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.
- 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.
- 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.
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