Timothy Kline: Thoughts and Reflections

Reality Check on Obama's Plan

Today, news outlets, television news stations, and radio networks got as excited as school children hearing about a class party. The subject was Obama’s plan for “cleaner, more efficient cars.”

On the surface, it sounds like a fantastic plan, and one that is long overdue for a nation that has become lackadaisical about how it has become the world’s largest consumer of petroleum, and obsessed with bigger, more gas-guzzling vehicles than ever before.

The earnings just in the past few years by oil companies have broken all records for corporate earnings, while Americans pay more at the pump to fuel their need for speed and show and power.

And perhaps that is why this announcement has been picked up and broadcast across the nation with such fervor. But the world has a saying that the devil is in the details, and while the majority are excited at this latest pronouncement from our new president, it would be an exercise in wisdom to more closely examine what we are being told and what we aren’t being told, rather than simply jumping on to the hype train.

In the details of the report by the Associated Press came these announcements:

• Consumers would have to spend an additional $1300 per new vehicle by 2016.
• Consumers would see a savings of $2800 through the improved gas mileage of the vehicle.
• Vehicle carbon dioxide emissions would be reduced by about a third.
• Vehicles would average about 35.5 miles per gallon.
• The proposal would save 1.8 billion barrels of oil “over the lifetime of the vehicles sold in the next five years” and be akin to removing 177 million cars from the roads over the next 6 1/2 years. In that period, Obama claims, the savings in oil burned to fuel American cars, trucks and buses would amount to last year’s combined U.S. imports from Saudi Arabia, Venezuela, Libya and Nigeria.

So, let’s examine these items and see what we come up with.

Consumers would have to spend an additional $1300 per new vehicle by 2016

According to the Associated Press, “Consumers were already going to pay an extra $700 for mileage standards that had been approved previously, according to administration officials. The Obama plan adds another $600 to the price of a vehicle, bringing the total cost to $1,300 by 2016.” This increase comes at a time when the jobless rate is alarmingly high. Families are losing their homes, as well. The corporate bailouts that have been enacted in recent months have placed every single person’s financial standing in a dangerously precarious position, and nobody really yet knows how it’s going to be funded.

Bottom line, if Americans cannot afford to stay in their homes, then how in the world are they going to be able to afford to buy a new car just to experience a $2800 savings over the lifetime of the vehicle? It is unrealistic, to say the least. And irresponsible.

Consumers would see a savings of $2800 through the improved gas mileage of the vehicle

Evidently, this savings would be seen over the lifetime of the vehicle, which means that if the car lasts, let’s say ten years, the consumer will see a savings of $280 every year. That amounts to a whopping $23 a month that is saved. It just sounds so much better when you throw out a big number like “$2800″ I guess.

What else is not being given due consideration is the volatility of the gas market. Gas prices continue to stay higher than they have ever been, and for a longer period of time. Just about anything can suddenly drive the price of gasoline up still higher. What guarantee are we being given that that $23 we’ll be saving each month won’t actually be gobbled back into the oil companies’ bank accounts through increased fuel costs?

None.

Vehicle carbon dioxide emissions would be reduced by about a third

Using a term like “about a third” does absolutely nothing to convey the reality of our pathetic emissions standards and contribution to the destruction of our own atmosphere. It’s a vaguery that sounds great, but bears little relevance.

According to the U.S. Department of Energy, “Carbon emissions in North America reached 1,760 million metric tons in 1998, a 38 percent increase since 1970. They are expected to grow another 31 percent, to 2,314 million metric tons, by the year 2020.”

Simply put, if vehicle carbon dioxide emissions do manage to be reduced by a third, then we’re going to remain at 1998 levels—dumping 1,760 million metric tons of carbon dioxide emissions into our air. No increase, but certainly no decrease either. In other words, the “status quo” that Obama says will no longer be acceptable—really is acceptable.

Vehicles would average about 35.5 miles per gallon

The idea here is to have passenger cars achieve 39mpg and light trucks achieve 30mpg by 2016. However, everyone knows that passenger car purchases are losing ground to the bigger, roomier, more buff SUV and minivan market, not to mention the heavy trucks. What good will manufacturing a car that can get up to 39mpg (on the highway, I presume) if the consumer passes it by to climb into that sporty-looking SUV? Absolutely no good at all.

Back in the mid to late 70’s and on into the early 80’s, there was an abundance of gas-miser vehicles such as Chevettes and Escorts. But America, in its buying into the whole idea that bigger is better, and the more powerful the vehicle, the better, have since abandoned the notion of vehicles that save on fuel like Chevettes and Escorts did. Let’s face it: the SUV market has become a burgeoning moneymaker for automakers because it’s in demand. Automakers have for years been able to point to car models that have increased in fuel economy, without mentioning that they aren’t selling off the lots like the big trucks, minivans, and SUVs. Can you imagine a family accustomed to all of the roominess afforded them by their SUV or minivan to then be willing to forfeit that and squeeze back into a smaller car in order to gain a few extra miles to the gallon? Highly unlikely.

And none of this takes into account the fact that foreign automakers such as Toyota and Honda already produce vehicles that meet the 2016 standards—and in some cases, exceed them! If American automakers reeling from a downturn in the market are going to remain competitive, they’re going to have to do a whole lot better, and a whole lot sooner.

The proposal would save 1.8 billion barrels of oil “over the lifetime of the vehicles sold in the next five years”

This was perhaps the most ironic statement that came out of the Associated Press’ report from Obama’s announcement today. That’s because Americans consume, on an average, 20.6 million barrels of oil every single day! Under Obama’s current proposal, we will be saving about 90 days’ worth of oil consumption—but that 90 days’ worth of savings will be stretched out “over the lifetime of the vehicles sold in the next five years.” That’s approximately a savings in oil equal to 18 days each year for 5 years. It’s a mere pittance, readers, and if you aren’t howling with wry laughter as that point hits home, then you don’t get the sheer senselessness.

Okay, Critic, do you have a BETTER idea, then?

It’s easy enough to find the faults in today’s media’s festive atmosphere. It’s easy to stand back and take a more critical look at what we were told, and what it all really means.

But it’s a whole other deal to come up with a workable alternative, and I know this.

For me, I would prefer to see the failing GM and Chrysler somehow get retooled and start producing some sort of electric vehicles. If that can’t be done, then hand off the project to the up-and-coming companies that are producing them now in this country, and help them to expand. Workers that are going to lose their jobs as Chrysler and GM undergo bankruptcy and reorganization could be hired in by these new automakers and put back to work producing vehicles that really will reduce our dependence on oil. Electric-powered vehicles are not the ultimate solution to the problem, but they will certainly buy us more time until we develop a better technology—and preserve our environment in the process.

Curiously enough, there was NO mention whatsoever in today’s announcement about alternatively-powered transportation—which leads me to believe that when Obama says that everyone will profit from today’s announced change, he’s referring to the big corporations and oil magnates who stand to make billions more than they have up until now, while maintaining the status quo.

Check your reality at the door, folks.

Obama institutes double-standards as part of his recovery plan

In what is clearly becoming more of the same old song and dance from Washington D.C., early morning television shows across the nation excitedly announced that the White House had forced GM CEO, Rick Wagoner, to resign from his position at the head of one of the financially troubled Big Three U.S. automakers. What would it mean? And what about Chrysler and Ford automakers? The news wires were abuzz with rumors and anticipation and, as has been the case for quite some time now, Wall Street, too, let their anxiety become known as the stock market reeled from the possibilities.

Even more interesting, amidst all of the hullaboo surrounding the Obama administration’s intention to set matters straight in the auto industry, is the absence of outcry over the patently obvious. Somewhere in the whispers going around the workplaces, coffeeshops, and offices, everyone admitted that Rick Wagoner drew the short straw, and was immediately served up as the sacrificial lamb in an attempt to make it look as though embattled President Obama was actively trying to fix things.

Still, there doesn’t seem to any end in sight to the outrageous policy of double-standards at work here, even in the new administration. Why was Wagoner removed from his position as CEO and yet CEOs and other culprits in the financial sector continue in their positions, unscathed—at least those who haven’t been handpicked to have roles in the new administration? Where is the demand for a plan from the Wall Street moguls in the same vein as that demanded from the Big Three automakers?

The answer, of course, has already been given to us: we are to look to the financial sector as our way out of this financial debacle—even though they are the very ones who brought it upon the American people—and the rest of the world, by extension! As for the “worker bees” of this country, they are expendable. Should the Federal Government force GM into bankruptcy (which now seems more likely than ever), union contracts are null and void—essentially, breaking the unions’ backs and any bargaining power that they have had up until now (their own greed notwithstanding). With the unions gone and the oligarchy retaining their comfortable seat at the table of the ruling class in Washington, we stand to see a change in so-called “democracy” that most will have never seen coming. After all, we Americans are now on the hook for trillions of dollars that we don’t have—and never will. You can be certain, however, that the government and its financial constituents will get what’s owed to them, by whatever means are necessary.

It’s truly disappointing to realize that Obama’s talked a good game up to this point, but his actions are getting to the point now where they speak louder than his words: One set of rules for the Wall Street moguls and another set of rules for working-class-based corporations. And why not? After all, some of the elected officials biggest contributors going into the 2008 elections were the very ones who have been romancing Congress for bailouts on a scale never before seen in the history of any nation up until now. And we haven’t even seen the end of those bailouts yet.

But if there’s been any consistency apart from the reaffirmation that Washington D.C. has been bought and sold to the rich and well-placed, and the working class American has been told to remember their place if he/she knows what’s good for them, it’s this: the vast majority of disgruntled Americans will heed the warning and bite their tongue, for fear that they, too, might lose what little they have—even though it doesn’t even belong to them in the first place. The United States of Sheep will continue to put up and shut up. It’s what we do, and we’re proud of it, too.

GM thanks America... by cutting 2,000 jobs

Today, GM—one of the Big Three automakers that recently was given $13.5 billion dollars from taxpaying, working Americans—returned the favor by announcing today that it will be cutting 2,000 jobs from its workforce. Those workers will then become the rest of America’s problem as they apply for and receive unemployment checks funded through tax dollars, while at the same time cutting off funding for those tax dollars through taxable income. In effect, the rest of us will not only be on-the-hook for the $13.5 billion that we obligated ourselves for by giving GM the money in the first place—we’re also going to need to pick up the slack in order to compensate for the loss of tax revenues that we figured into the equation. If that’s not enough, we’re also going to need to figure out how to do that in addition to ensuring that there is enough tax revenue to pay out the unemployment claims.

If the loss of 2,000 jobs isn’t something you’re particularly concerned with because you have your job, then none of this will matter.

However, if you care about the implications of this latest high business chicanery on the part of General Motors, let me give some perspective to further raise your indignation.

According to one site, GM executives earn around $65 million dollars annually. Of course, GM president, G.R. Wagoner, Jr., agreed to settle for a $1 salary to help secure the monies we gave GM. And, of course, they decided not to award too noticeable a bonus this year and risk too high a public outcry.

Be that as it may, $65 million dollars is a significant chunk of change.

But what does any of that have to do with them announcing that they needed to cut 2,000 workers from their payrolls?

Well, let’s do the math and find out.

Now, I’m not going to pretend to know the exact amount of the wages of those workers who are going to be cut. For the sake of this argument, it really isn’t necessary. But for the sake of argument, let’s say that each worker earns $25 an hour (some earn more, some less) and works 40 hours per week. That gives us $25 x 40 = $1,000 in gross income. Multiply that by the number of weeks in a month: $1,000 x 4 weeks = $4,000. Now, multiply that by the number of jobs being cut. $4,000 x 2,000 jobs = $8,000,000 is what we come up with.

Now, to find out how much those 2,000 workers earn in a year (gross earnings, mind you!), multiply by 12 and you end up with $96,000,000.

Are you still with me? Yes?

Alright, now, if GM executives were really wanting to help their company and repay their gratitude for the rest of us working, tax-paying Americans throwing that $13.5 billion dollars to them, they would say, “Look, we will all settle for a $1 sum for our payroll, and tighten our belts this year to ensure that our workers can continue to meet the needs of their families, and together we will get through this crisis and reap the benefits later.”

If they had done that, they would have already had all but $31,000,000 of what it would have cost to keep those workers on the payroll and thus continued to provide tax revenues to fund their own bailout. That $31 million could easily have then been taken from those below the executive level who likewise make significant amounts of money in their relative positions as they, too, tightened their belts in order to show their support and appreciation for the workers. Similarly, the UAW representatives could have announced a temporary furlough on union fees, until the crisis passed and sales were on the rise.

What’s still more interesting is that that $31 million remaining shortfall could have been shored up with plenty left over, just from the nearly $50 million that was spent just in the first nine months of 2008 (Report by CBS News) lobbying against better fuel standards and decreased emissions. And now, they’re spending a yet-to-be-discovered amount of money lobbying angrily against allowing states to determine vehicular standards within their own borders, taking the burden off an already over-burdened federal government.

Coulda, woulda, shoulda. None of it really matters, does it? Big Business and Corporations have no qualms about taking us for a ride, so long as we’re willing to pay for the gas. No “thank you” and no show of real appreciation from them.

And what is even more sad is that this won’t be the last of the job cuts that will be made. Everywhere, businesses and corporations are cutting out the workers, starting anywhere below the cushiony office suites and elitist paygrades that separate “them” from “us.”  They’re continuing to demonstrate an unhesitant willingness to chop off every other head before they themselves feel the pinch of tightened belts and conservation in spending, much less the impact of their dereliction of duty to the working class. It’s been an entitlement culture on both Wall Street and in the upper echelons of Big Business and Corporations, and by every indication, they are intent on seeing to it that things continue exactly like that.

As for the lost jobs and unemployed workers? GM’s opinion is this: “Let the rest of America deal with them. Our only concern is with our own profit margin, annual bonuses, and padded pockets and wallets. But please, keep giving us your money.”