Brand Name Heaven

Barack Obama is going to have his hands full when he takes office. His foreign policy advisory picks may make the left wing of the Democratic Party angry, but his choices bring enough experience to the table to allow Obama to focus on domestic issues, mostly an economy that is in shambles. He is going to need all the help he can get. But how does he repair America’s psyche
which is being pummeled from all directions?

Consolidation of brands at any time can be disconcerting. But when it happens all at one time, it is downright scary. I heard on the news last night that General Motors may be “selling” some of its brands in order to meet Congressional requirements for a proposed bailout. Included in the asset sell off are Pontiac, Saturn, Hummer and Saab. Hummer and Saab I can understand, but Pontiac and Saturn? Who would buy Pontiac? GM has been pushing the Saturn brand for years, which has some of GM’s most stylish and fuel efficient vehicles. What’s with that? More likely GM would just shut down those brands.

That would leave General Motors with Chevrolet, Buick, Cadillac and GMC. Buick has been rumored to be a brand that GM would allow to follow the path of Oldsmobile, although it is its biggest seller in China. I have driven a Buick for years. My wife and I both drive Lucerne’s, and it is a great car.

On top of that, AOL had an article on its site today about companies that may not be here after Christmas. Circuit City heads the list. It is already in bankruptcy. Over the years I have bought mucho electronic equipment from CC, and they have been a pain to deal with. I am surprised they have lasted as long as they have.

Other companies on the list include Talbot’s (where my wife shops), Rite Aid (where I do sundry shopping), Dillards (where my wife shops for shoes), Saks 5th Avenue (where my wife goes and looks but can’t afford to buy anything…neither can anyone else!), Chico’s ( where my wife used to buy everything, but now goes to Coldwater Creek), Williams-Sonoma (where we bought trendy kitchen items and catalogue food when we were flush), and Eddie Bauer (never went there so I don’t know what they sell). In addition, Sears/Kmart is having trouble. So is Macy’s, which plans to close a number of stores.

Bank brands have been disappearing at light speed. Locally, we said goodbye long ago to Union Bank, Dollar Bank, People’s Bank, and some of their successors….Bank One and Sky. National City will be PNC within a few months. If you trade stocks…brokers come and go like door to door salesmen. You never know who will own what, when or where. I am with UBS right now. Who knows what it was called when I started going to its predecessors. Butler Wick is still here, for now. I hope for a long time.

People my age have lived through consolidations all of our lives. Local retailers include names such as Strouss, McKelvey’s, Livingston’s, Brenner’s, Lustig’s, Hartzell’s, Birnbaum’s, as well as successor companies like May Company, Higbee’s, Lazarus, and Kaufmann’s. All have played a large part on our life, and have been sopped up in the current economic crisis which has sped up the inevitable.

In a world that is built around WalMart’s and Costco’s and Sam’s Club’s and Home Depot’s and Lowe’s and box stores galore, and megabanks that are too big to fail like Citigroup and Goldman Sach’s and JP Morgan/Chase…our lives and identities are also being consolidated and diminished.

I guess I am going to have to find another car to drive, and a whole lot of other places to shop. That is a real shame.

This Thanksgiving: Bad Things/Good Things

To be honest, this year has really sucked. Every now and then you get a year in which bad things happen. 2008 has been filled with too many people I know, both family and friends and clients, answering the Lord’s call to go home to heaven. I have attended more funerals this year than the past five years combined. My 89 year old mother has been ill for the past 3 months, and she has been difficult to handle causing major disruptions in our lives. My son entered graduate school at Ohio State, giving us a bad case of empty nest syndrome.

Then there was the energy crisis of this past spring and summer when we couldn’t afford gasoline and the cost of food almost kicked into hyperinflation. Now there is the nation’s financial crisis and we can’t afford to buy anything as the nation’s iconic corporations are on the ropes and have either gone under or are about to. For some of us, our retirement funds are in shambles. For others, entire livelihoods are gone.

In politics, my political party deep sixed the election by first nominating someone for president who really should not have run…and his campaign confirmed it. Ouch!!!

And this past week, an acquaintance/friend of mine and his family have begun a journey through some very difficult and disruptive circumstances, the type of which no one should have to go through. In a setting that should be one of love and hope, ugliness and the very worst side of human nature has reared its ugly head causing distress to many people.

My wife and I both lead very active lives independent of each other. But every Friday night we come together to have dinner, just the two of us, and talk over the week’s events in our lives. This past Friday we celebrated our 36th wedding anniversary, and as we sat across the high top table in our club’s bar eating dinner, hashing over all sorts of things, it was clear that I am truly blessed.

I am blessed with my beautiful wife who has stuck with me for all of those years through some very trying circumstances. I am blessed with a great son, who makes me proud every day. I am blessed with terrific friends, who tolerate my idiosyncrasies more than they should. I belong to wonderful organizations that do good for others and provide creative outlets for what little talent I have to offer. I have been blessed with more good health than I deserve given my grossly “less than healthy” lifestyle. I am blessed with a brain that can at least make some feeble effort to “get through things.”

I am blessed to live in a country that, with all of its faults, continually tries to achieve its idealistic goals of freedom and equality. It offers more opportunity to individuals than any other country in the world. I am blessed by those who offer their service to the military to protect our country, and are willing to die for our country. I am blessed that even in times of stress, our country still has the resources to help those out with less than me. Even in the worst of times, we are better than most, and those of us fortunate enough to live here, can keep good humor as to what is going on around us.

We are all blessed with an abundance of stuff, more stuff than we can use in a lifetime, stuff we can’t take with us when we die. We are all blessed with cable television, computers, the internet, automobiles, adequate housing, ample clothing, big screen televisions, radios, MP3 players, heat and air conditioning, running water and sewers, refrigeration, telephones, both wired and wireless. It is the things we take for granted that truly make us blessed.

So this Thanksgiving, remember that even when life sucks…it is good, and be truly grateful for the blessings that God has chosen to bestow upon us, our families, and our nation.

Bailing Out the Auto Industry

My head tells me there is not one good reason for Congress to provide bridge loans to the auto industry. Its problems are systemic problems and have existed for years and years and years. Auto workers currently make in excess of $72.00/hour, including all benefits. A Honda worker makes $44.00/hour…and the average industrial wage is $18.00/hour. Legacy costs added onto each automobile cost Detroit approximately $4,000.00/car, an expense not borne by foreign autoworkers doing business in the United States. In addition, the auto industry has consistently made bad decisions relating to model mix, and for years made a shoddy product compared to its foreign counterparts.

These systemic problems caused American automakers to promote gas guzzling, massive SUV’s because the foreign automakers would not compete in the category, and the Americans could make a profit on those types of vehicles. That desire for profit was not driven by ordinary business practices, but rather by a need to pay those massive legacy costs and comply with union obligations. The sole raison d'etre for the American automobile industry was to pay for retirees’ health care and way out of proportion salaries from the executive suite to the assembly line.

For the past several years, we have watched Ford and GM (forget Chrysler) struggle to get out of that box. Dual salary structures, union takeover of pension obligations, hammering suppliers like Delphi into bankruptcy…the efforts went on and on…and none of them worked. When energy prices skyrocketed, what little support there was for the existing business plan collapsed as SUV and truck sales tanked. The execs and UAW president have been in Washington all week claiming it was the financial crisis that has trapped them. No, it wasn’t. It was $4.00/gallon gasoline and the inability to compete with foreign manufacturers who already producing fuel efficient cars in the United States that has sunk the auto industry. They were hanging onto the rail by one finger, and that finger got hammered in the financial collapse.

Why should the rest of us, many of whom don’t buy their cars, and many of whom are struggling to put food on the table let alone make $72.00/hour, bail them out with our tax dollars? For politicians, they want the votes in Michigan and Ohio. But where does the benefit accrue to the Honda driver that goes to work at McDonald’s to make $10.00/hour, if that?

I used to own GM stock, and I continually heard the rosy scenarios relating to the company’s future. In light of the current situation, those making the claims were either lying or very stupid. I finally got out 2 years ago. I had hoped that the Chevy Volt would provide a catalyst to make GM profitable again. I was thrilled that the government saw fit to provide loans to GM for the development of fuel efficient cars like the Volt. I truly believed, as I wrote several weeks ago, what’s good for General Motors is good for the USA.

Maybe what’s good for General Motors, and Ford and Chrysler, is to file for Chapter 11 bankruptcy with the government providing the needed bridge loans allowing them to keep operating, while using the courts to enforce badly needed reform in the industry. It will be painful and scary and not cheap to the taxpayer as the government wrestles with how to deal with pension funds and health care. It will be a messy business.

That is what my head tells me. Why does my heart tell me something different?

Photo Courtesy Flickr Common Attribution: Derek Farr; Some Rights Reserved

Here Comes Cap and Trade!!

The financial meltdown has affected all of us this past year. Most folks, like you and me, don’t really understand the complexities of the securities collapse that caused the problem. Terms like “mark to market, credit default swaps, securitized financial instruments, collateralized debt instruments, bucket shops, and derivatives,” sound scary, and they are. But do any of you really have a clue what they mean? Probably not! These are pieces of paper upon which trillions of dollars exchanged hands, the value of which wasn’t known then, and isn’t known now; hence the current problems. The accountants can’t figure out what they are worth, because they are just pieces of paper.

These pieces of paper that no one, including our government officials, understands, have caused the biggest financial crisis since the Great Depression, and has bankrupted some of the most respected companies in our country. Yet, the nation is once again about to embark on another financial fantasy called “Cap and Trade.” As the pitchman said: “You ain’t seen nothin’ yet!!”

Start with a scientific theory trying to explain the ebb and flow of temperatures of the earth. Completely ignore the historic rise and fall of temperatures through several ice ages and the converse warming periods over ions of time. Completely ignore the fact that the temperature of the earth is actually going down right now. Completely ignore the fact that just 20 years ago these same scientists were claiming the earth was going into a deep freeze.

Who cares? It has looked a little toasty these past 20 years, and something must be causing it. It must be us!!!! The dreaded greenhouse gases from our sinful and immoral lifestyle are turning the earth into a greenhouse. Coastal cities from New York to Miami are going to sink under an ever rising ocean. Our plains will turn into deserts. Repent. The end of the world is at hand.

Hogwash. Slowly but surely scientists have quietly been moderating their opinions, pointing to the correlation between temperatures and sun spot activity over hundreds of years. The correlation is uncanny. Story after story has been popping up on the news of scientists censored and fired from their jobs because they are concluding that global warming is myth, and may be better handled, if it exists at all, through other means such as management of the rain forests.

In the meantime, the news media and politicians anxious to control your lives have turned junk science into a political movement. Global warming is now unquestionable and irrefutable conventional wisdom. You know, like the earth is the center of the universe, or the earth is flat. Question it, you will run up against the equivalent of the Salem witch trials.

So, who stands to gain from all of this? The government for one, who will sit in grand judgment as to what is acceptable and what is not in terms of who benefits from energy usage. Rest assured, it will not be you.

Even scarier are those who are entering into the Cap and Trade business. The government will decide how much emitted carbon dioxide is too much…and then tell businesses to fix it. If you are a business and cannot meet the standard, you will be forced to buy “carbon credits” from those businesses who have been able to come in under their allotment. If there are insufficient businesses to buy from, they you can buy your credits from the government. Of course, nobody has a clue as to how these allotments are to be made. And of course we don’t know how much these so called carbon credits will be worth.

Just like those scary securities that have decimated our economy this past year, these carbon credits will be subject to the “market’, and speculators. In effect, those who deal in these things will be trading “air”. Just wait for the accountants, who currently can’t value mortgage backed securities or credit default swaps in any meaningful way, start trying to value air. It will be a nightmare. And those who deal in these things will make billions of dollars, at your expense. At the end of the day, someone has to pay. That someone is you.

This is a non-partisan issue. Both Barack Obama and John McCain have bought into this global warming puffery, and are supporters of Cap and Trade. Beware!! Don’t let the government shove this down your throat as you will be the ones who end up paying. You should insist on facts and figures relating to global warming rather than just accept it as fact. Today's conventional wisdom will turn into yesterday's "the earth is flat."

A Rambling Election Post-Mortem

Election post-mortems are always more fun when your candidate wins. Mine didn’t. On the other hand, I wasn’t as much for Senator McCain as I was against Senator Obama. Notwithstanding that the media did everything but stuff the ballot box for Senator Obama, McCain ran one of the poorest political campaigns I can remember. At the end of the day, you have to be “for” something instead of “against” something. A candidate has to offer solutions, innovations, and yes…hope and change. McCain had no vision for America. That vision is particularly important this year as the nation faces some heavy duty financial issues, including the possible bankruptcy of General Motors…and there is no easy answer for that one.

The Republican Party went through the same thing when we ran Bob Dole for president. He was another true war hero who was demonized by the press, and his campaign was inept at overcoming it. McCain was Bob Dole redux, although he did have some inspiring moments that he failed to capitalize on. The “stand with me, fight with me, stand up for your country” ending to his speeches was terrific.

His selection of Sarah Palin was good and bad. She must have had something to offer as the press crucified her, and continues to do so. If she had nothing to offer, the press would have ignored her. She energized the conservative base. She will be an “up and comer” in the party, and will be a formidable opponent in 2012. On the other hand, she made McCain look even older and less inspiring than he actually was. Nobody showed up to see him. They showed up to see her.

This election also demonstrated that prejudice may be dead when it comes to skin color, but it is alive and well when it comes to age and gender. David Letterman should be ashamed of himself with his non-stop age jokes. They were mean spirited to the core. And to the credit of the press, the main stream media did a pretty fair job of spreading its gender attacks equally between Hillary Clinton and Sarah Palin. Sexism is alive and well in the nation’s news rooms.

So what does a right wing political junkie like me do now? Believe it or not, being a member of the loyal opposition can be great fun. I have had a few belly laughs already watching Ralph Nader call President-elect Obama an Uncle Tom, and Chris Matthews finally admit that it is his job to make sure the Obama presidency succeeds. His leg, and God knows what else, must still be tingling.

George Bush had several successes and some major failures. While his response to 9-11 was superb, his response to Katrina was a fiasco. While the war in Iraq was, and still is, right on the money in the foreign policy department, its execution was horrendous. While he was not responsible for sowing the seeds of the credit meltdown, it grew on his watch. And finally, he completely defaulted in establishing any energy policy whatsoever, which is center to all other problems facing our country today. He had a chance after 9-11 to lead the country out of the energy wilderness, and he didn’t.

While I truly hope that a President Obama will succeed in his presidency, if today’s press conference was any indication, it looks problematic. There is no doubt that he is an intelligent man, and I have no doubt that he has the best interests of the country at heart, but…rhetoric only goes so far. Any backpedaling on his issues will raise the ire of the left. It will be interesting to see how he handles Nancy Pelosi. She already one upped him by meeting with Presidents of Ford, GM, Chrysler, and the UAW. They went to see her, not him.

As for the GOP, it is time to revamp itself. The mid-term elections are off and running already, and the Republicans will be able to make up some lost ground. But to succeed, the Republicans must develop new leadership, younger leadership, more “colorful” leadership, and re-define compassionate conservatism. Its basic philosophy of individuals being responsible for their own destiny is more appealing than running to the government welfare window, corporate, individual, or otherwise, that is currently de rigueur in today’s political environment. It must define its conservative vision and redefine itself for the 21st Century. Can it be done? We did it for Ronald Reagan, and George W. Bush, we can do it again. Obama only beat McCain by 1 percentage point more than Bush beat Kerry.

As for President Obama, the vagueness of today’s economic news conference reflects the reality of the situation. The possible collapse of GM, Ford, and Chrysler lays at the door of 40 years of screw-ups by corporate management, Democratic and Republican administrations, and union excess. The government will not be able to bail out everybody and everything. Fair or not, Obama will have to pick and choose who will benefit from government largesse. For every friend he makes, he will make two enemies. It will be under his presidency that the brunt of this economic downturn will occur. His political goal will be to turn it around before the next election cycle.

He can do it, but it will be at the expense of the vision he painted for America. If has the spine to do what needs to be done, he will make a believer out of me. I hope so, for his sake, and that of the nation.