Why I Am Thankful
I just got back from Thanksgiving dinner at my sister's house in Maryland. We had a lot of turkey and cranberry sauce, too many slices of pie and a ton of political discussion -- most of my family are staunch conservatives, so we always have lively debate.
But it got me thinking about the things I am thankful for. Since this is a political column, I'll let you guys take it as a given that I am thankful for my wife, my family and all the other deeply personal things you don't care about.
But as an American, here are the things I am deeply thankful for:
(1) I am thankful that we live on one of the only nations on earth where people are free to speak their minds. Even in western democracies in Europe, the concept of a nearly absolute First Amendment is foreign -- you can be thrown in jail in Germany for advocating Nazism, for instance. I'm not advocating Nazism, but I am proud of a country mature enough to recognize that the best way to defeat it is to confront it head on.
(2) I am thankful that this November I was presented with an honest choice between two good and capable men for the Presidency. I'd have to go back a long way to say that in any previous cycle.
(3) I'm thankful that American economic might is such that we consider the current economic state a financial crisis. To 95% of the world's population, this would be a field day.
(4) I'm thankful that we are a mature enough nation to make intelligent decisions in the face of smears. No, I'm not talking about the presidential campaign, as I've said repeatedly, I actually found that to be remarkably clean. I'm talking about the North Carolina Senate race. Elizabeth Dole deserved to lose for the sleaze she was peddling at the end. And she did.
(5) I'm thankful our list of Presidents have been good enough that George W. Bush is considered among the worst. Compare him to bad leaders of other countries -- we've been blessed with a long string of capable leaders if he sorts to the bottom.
So, Happy Belated Thanksgiving. And give thanks that you live in the greatest country to have ever graced this Earth.
The "US" Auto Industry
One of the hot topics of discussion this Thanksgiving in my family was the US Auto Industry -- why it is failing and what should be done.
First, let me state my view that the Big 3 do not represent the US Auto Industry.
Here are a few facts:
First, there are more cars built in the US by companies other than GM, Ford and Chrysler than by GM, Ford and Chrysler. Just ask Toyota, Nissan, Honda, Mazda and BMW workers in places like South Carolina, Ohio, Tennessee and Mississippi. Then try to tell them they are not part of the US auto industry.
Second, ownership of all auto companies are multi-national. The Saudis own a chunk of GM and Ford. I own stock in Honda and Toyota. These are publicly traded companies. In a global economy of public companies, there is no such thing as a "US-owned" or "Japan-owned" company.
But let's put those points to the side and act under the assumption that the Big 3 ARE very economically important and therefore we have to look at what went wrong and what needs to be done.
Clearly the Big 3 are doing something wrong that Toyota and Honda (who are still profitable in this economy) are not doing wrong.
My brother-in-law attempted to passionately make the case that the source of all woes for the Big 3 was the UAW. While I don't necessarily consider the UAW to be the most forward-thinking organization in the world, this is, with respect, utter nonsense.
First, the US Auto industry's failings are not primarily driven by higher labor costs and lower productivity. Yes, it is a problem. But average assembly costs for Mini Coopers (made in the UK) are higher than for Big 3 cars and they are doing fine. The Big 3's's primary problems are and have been: poor innvoation & R&D pipeline leading to bad design and inferior production quality.
I haven't considered buying a Big 3 car for my last several vehicles because the designs were horrible and all empirical data points towards a very high cost of ownership due to poor product quality. If you don't believe me, try two things:
#1 Pick up an auto buying guide from consumer reports. Look at the real reliability data that they track from real owners.
#2 Call a GM dealership and ask them the price of an extended warranty. Then call a Honda dealership and do the same thing. Can you think of any reason other than poor quality that the same warranty costs 3x to 4x as much from GM?
So why are other companies doing so much better? Part of it has been strategic decisions made by management in terms of where to invest funds. GM, Ford and Chrysler have focused heavily on larger vehicles such as SUV's and Pick-ups, which are way down in this economy. Part of it is much poorer production systems leading to the inferior quality.
Toyota has had hundreds of books written about it and is widely considered to be the best run manufacturer of anything in the world. The key to their success is a focus on what they call "respect for humanity" -- the value of the line worker. Line workers at Toyota plants can each individually stop the line at any time they detect a quality issues. An hour of each of their days is devoted to continuous improvement. Toyota does everything it can to avoid layoffs and furloughs during slow sales periods. Does GM or Ford measure up to any of these standards? No.
Now, let's talk about the unions. Yes, higher wages are an issue for the Big 3. But how did those wages get there? The UAW can't unilaterally, management has to agree to them. Unions are actually a very free-market enterprise. Companies whose workers organize usually did something to deserve it. And companies that have unions that agree to bad contracts are to blame, not the unions. It's a union's JOB to get more money for its members. It's the company exec's JOB to do things in the interest of the company.
There is a reason that Caterpillar is not broke and GM is. Caterpillar recognized that they could not afford higher wages and fought a very tough fight with the unions to manage the issue. GM did not. Their fault.
I have absolutely zero confidence in the present management at the Big 3 to turn things around. Accordingly, I absolutely do not support a bailout to keep them afloat -- it would be wasted money. The only way I would support a bailout would be if present management is removed and replaced with capable business leaders who establish intelligent R&D strategies, improve labor relations and productivity and modernize factories. If congress doesn't see this, it should let the Big 3 go Chapter 11 and let the bankruptcy court impose these needed changes.
GOP Holds Ground in Remaining 2 Senate Races
It appears with most of the recount complete in Minnesota, that Norm Coleman has returned approximately the same lead he had going in (215 votes.) There are thousands of challenged ballots still to be resolved, so we don't know for sure, but I would say signs point towards a Coleman return to the Senate. Democrats should actually be grateful not to have Al Franken in their ranks.
In Georgia, Saxby Chambliss leads by 3 to 6% in all the polls that I've seen. He appears headed to a run-off win. It's too bad, Chambliss is a real seedy character, having won election by accusing his war veteran paraplegic rival of not being patriotic enough in 2002. But, it looks like he gets 6 more years.
Terror in India
Terrorist attacks on high-end hotels in Mumbai reminded everyone that there are issues other than the economic crisis that President Obama will have to contend with when he takes office. While India has a history of Hindu/Muslim tensions, these attacks were clearly targeted at Westerners, the primary guests in high-end hotels.
Interestingly, the Obama transition team responded with a statement much more quickly than the Bush administration did -- which begs the question -- who is really in power now?
One other side note -- does Joe Biden get points for being right?
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