James Pethokoukis

Politics and policy from inside Washington

Civil War 2.0 may turn governors into presidents

Feb 24, 2011 18:04 UTC

Six men with the rank of general during the Civil War went on to become  president of the United States. But a new kind of union battle — one being fought in places like Trenton and Madison and Columbus and Indianapolis — may be forging the next generation of leaders who will ascend to the White House. How state governors fare as commanders in this escalating conflict with Big Government Labor may determine who makes it all the way and who falls short.

For the most part, the political backlash against public unions is happening in the states. That’s where employee benefits are creating long-term budget problems. Total unfunded pension and healthcare liabilities could be as much as $3.5 trillion.

Savvy governors can thrust an issue like public sector compensation into the national consciousness and create a political niche for themselves.  And American voters like to promote state bosses  to national CEO. President Barack Obama was never a governor, but two-term predecessors George W. Bush, Bill Clinton and Ronald Reagan all were. The last sitting U.S. senator before Obama to go directly to the White House was John Kennedy in 1961.

In New Jersey, Chris Christie’s efforts at austerity have made him a leading 2016 GOP contender with many Republican activists still hoping he’ll change his mind and make a run against Obama next year. Wisconsin Republican Scott Walker has burst into national prominence by trying to strip public unions of some bargaining rights. And in liberal New York, Democrat Andrew Cuomo’s adversarial approach to labor might help his centrist appeal should he cast an eye on the Oval Office.

Among Republican activists, it’s almost impossible to be too tough on unions. That’s where the risk of overreach starts cropping up. Indiana’s Mitch Daniels, a possible 2012 candidate, already has killed collective bargaining for state workers. Yet conservatives balk because he won’t prohibit making union membership a condition for employment. Daniels sees that as a needless fight with organized labor, whose influence is already waning. As Josh Barro of the Manhattan Institute notes on his blog:

As of 2010, only 8.2 percent of private-sector workers in Indiana were members of unions. That’s a bit above the national average of 6.9 percent, owing to the state’s industrial base, but it’s also falling faster than in most states: down 37 percent in the last decade, compared to 22 percent nationally. Private firms don’t appear to fear excessive union power in Indiana; indeed, the state has had significant success in drawing non-union Japanese auto factories.

The political subtleties sometimes get lost in the heat of battle. Some in the Tea Party are bashing Christie for increasing the state’s spending in his newly announced budget. But the governor is trying to negotiate a deal with Democrats to go easier in exchange for sweeping pension reform. And if Walker should settle for something less than total surrender or go too far by firing workers, his sudden ascent could come to a halt.

The fight against public unions and for fiscal responsibility may look like to create a clear path to the presidency for now. But governors going down that road will need to beware of the many political mines strewn along the way. Still, a future American president may have his or her mettle tested in this new civil war.

COMMENT

Cal13, even if they can’t begin collecting signatures yet, whoever wants to recall Gov. Walker can certainly get started organizing. Has that happened?

At all?

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Obama’s centrist shift evaporates

Feb 18, 2011 19:45 UTC

President Barack Obama’s much-trumpeted move to the center? Apparently, it doesn’t go much beyond using buzzwords such as “innovation” and employing CEOs as stage props. His 2012 budget introduction and Wisconsin incursion make that clear.

This was the week for the president to show that he had really learned the lessons of both the 2010 midterms and the shortfalls of his own economic policies. Instead, it was the American public that learned something. It learned that Obama pretty much is who he is – and he’s probably not going to change.

He’s the guy who was the U.S. Senate’s most extreme liberal. He’s the guy who told Joe the Plumber that he wanted to “spread the wealth around.” He’s the guy who tried to use the Great Recession to greatly expand the welfare state.

He’s that guy.

Obama’s 2012 budget was the first revelatory moment of the week. Even with rosy economic projections, it would still add another $9 trillion to the national debt from 2011 through 2021. And it did nothing to address entitlements, the key drivers of America’s long-term fiscal problems, even though his own debt commission gave him a plan with bipartisan support.

Even worse, Obama attempted to hide the budget’s alarming profligacy. In his news conference, Obama stated that by the middle of the decade, his just-released budget would “not be adding more to the national debt. …  We’re not going to be running up the credit card anymore.” Yet from 2015 through 2021, the Obama budget would add $4.7 trillion to the national debt. And public debt as a share of the overall economy would rise to 77.0 percent from 76.1 percent.

But the president tossed in a qualifier: “Our annual spending will match our annual revenues.” Well, that clears things up. If you don’t count $3.7 trillion in interest payments as part of spending, the budget is balanced in 2017 and then slowly builds a tiny surplus.

Yet Obama’s narrowly define surpluses will quickly disappear in coming decades as government healthcare spending explodes. And if the economy grows a bit more slowly than what White House economists now forecast — say, more like the predictions from the Congressional Budget Office — Obama’s primary deficits would never disappear at all.

But just as entitlements are the root problems of the federal budget, at the state level it’s the fat pension and healthcare benefits — unfunded to the tune of $3.5 trillion — awarded to government unions by the politicians they elected.

The result is the Battle of Madison as Gov. Scott Walker of Wisconsin tries to get a handle on a budget shortfall of $3.6 billion, as well as longer-term fiscal problems. He probably didn’t expect an encouraging word for the White House, and he was not disappointed.

As Obama told a Milwaukee television reporter: “Some of what I’ve heard coming out of Wisconsin, where they’re just making it harder for public employees to collectively bargain generally, seems like more of an assault on unions.”

Entitlements and government unions are both products of the heyday of American liberalism from the 1930s through the 1970s. Just like when Mikhail Gorbachev ascended to power in the old Soviet Union with the goal of modernizing and preserving that system, Obama hopes to do the same with America’s union-backed welfare state by making it — and funding it — more like Europe’s.

If Scott Walker in Wisconsin and Chris Christie of New Jersey are successful at the state level and Rep. Paul Ryan at the national, Obama may instead preside over its collapse.

COMMENT

Obama is clearly and without doubt a MARXIST. Just review his past and present associations.

COMMUNISM is alive and well in the U.S.A.

Americans need to wake up and see that liberals have bankrupted the country with entitlement programs that are too costly for American taxpayers, rich and poor alike.

It’s time to cut government spending by 50% STARTING AT THE EXECUTIVE AND LEGISLATIVE BRANCHES OF GOVERNMENT.

A TAXPAYER REVOLT IS COMING!

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Geithner’s odd attack on Toomey debt ceiling bill

Feb 8, 2011 18:53 UTC

All kinds of economic policy ideas are floating around Capitol Hill at any given moment. Very few of their congressional authors receive a direct rebuke from Team Geithner over at the Treasury Department.

So how did Sen. Pat Toomey get so lucky? Well, the Pennsylvania Republican proposed a simple legislative idea: If Congress is unable to quickly agree on a plan to raise the national debt ceiling, Treasury should prioritize U.S. debt payments so America doesn’t slip into default. (Treasury estimates that the limit will be reached between April  5 and May 31. It has already taken steps to avoid a breach and is reducing the amount of money it holds in a special account at the Federal Reserve. As of Jan. 31, the total public U.S. debt stood at $14.1 trillion, or $215 billion below the limit.) Spending would have to be sharply reduced elsewhere until an agreement was reached, one that would hopefully also include deep short-term and long-term spending cuts.

As Toomey puts it:

Certainly, no one should damage the full faith and credit of the United States. In fact, Democrats and Republicans should all agree on at least one thing: Under no circumstances is it acceptable for the U.S. government to default on its debt. Not only are we morally obligaed to honor our debts, but we benefit greatly from the nearly universal conviction that those who lend to us will always be repaid, on time and in full. We should never undermine that conviction.

Timothy Geithner is having none of it, calling the Toomey plan “unworkable” in a letter to Toomey:

In fact, the legislation would be quite harmful if enacted. A simple analogy may help illustrate the problem. A homeowner could decide to “prioritize” and continue paying monthly mortgage payments, while opting to cease paying other obligations, such as car payments, insurance premiums, student loan and credit card payments, utilities, and so forth. Although the mortgage would be paid, the damage to that homeowner’s creditworthiness would be severe.

Geithner’s right hand man, Neal Wolin, also goes after Toomey’s idea on the department’s blog:

While well-intentioned, this idea is unworkable.  It would not actually prevent default, since it would seek to protect only principal and interest payments, and not other legal obligations of the U.S., from non-payment.  Adopting a policy that payments to investors should take precedence over other U.S. legal obligations would merely be default by another name, since the world would recognize it as a failure by the U.S. to stand behind its commitments.  It would therefore bring about the same catastrophic economic consequences Secretary Geithner has warned against.

Here’s the problem: Geithner and Wolin are mistaken in assigning all U.S. obligations equal weight and importance. Take Social Security benefits, for instance. They’re an obligation to be sure, but the Supreme Court has ruled recipients have no legal right to receive them. And federal budget scorekeepers don’t even include money borrowed from the Social Security trust fund in their debt-to-GDP calculations. Also, back in the winter of 1995-96, a federal shutdown meant government vendors didn’t get paid. But long-term Treasury yields actually declined during that period. It borders on the ridiculous to think international investors would flee Treasury bonds because a government contractor in Virginia was not paid in a timely matter.

Treasury’s analysis, it seems, is at heart a political one — not a financial one. The Obama administration doesn’t want the debt ceiling to be used by Republicans as an effective lever to get large spending cuts. And anything which makes the perceived risk of default less likely — such as Toomey’s bill — undercuts the White House’s scary messaging.

Bondholders may actually favor Toomey’s idea, just like California bondholders are keen on how the Golden State’s constitution makes paying general obligation debt a top priority. The best option is for Republicans and Democrats to quickly agree on spending cuts as a part of a deal to raise the ceiling. And instead of having the limit be an absolute figure in the future, total debt should instead be calculated as a share of the total economy — preferably far less than the 60 percent level recommended by the IMF. That way it would be a fiscal feature rather than a budgetary bug.

When states go bust

Feb 7, 2011 16:54 UTC

That is the headline for my piece in the latest Weekly Standard about letting US states declare bankruptcy. Here’s a taste:

It’s a solution of apparent Alexandrian elegance and simplicity: Empower America’s cash-strapped states to slice cleanly through a strangling knot of debilitating debt and government union cronyism by letting them file for bankruptcy. Long-term liabilities could be restructured, unaffordable labor contracts rewritten, fiscal health restored. No federal bailouts necessary. … Kevin Drum of Mother Jones put it this way: State bankruptcy “promises to become a pretty serious battle. For Republicans it’s got everything: The tea parties will love it, it provides an alternative to raising taxes, and .  .  . it helps defund a key Democratic interest group. What’s not to like?”

Surprisingly, quite a bit—at least among some Republicans and conservatives. In a January 24 session with reporters, House majority leader Eric Cantor brushed off the idea. … A more pointed critique was offered by members of the highly respected free-market Manhattan Institute, Nicole Gelinas and E. J. McMahon, in the op-ed pages of the Wall Street Journal and other papers. Among their many objections to state bankruptcy: It would violate the constitutions of many states; it would damage the balance sheets of banks holding a quarter of a trillion dollars in state and municipal bonds; it might even cause such investor panic as to risk repeating the 2008 financial meltdown. “Bond-market brinkmanship and bankruptcy threats can’t save the states from themselves,” Gelinas wrote in the Boston Globe on January 23.

COMMENT

The states do not need bankruptcy. They can simply default. They can outlaw public sector unions and freeze their pension liabilities. And if they modify their constitutions and their laws the states creditors will have no recourse.

As long as this is done in a roughly even handed way the creditors would not be able to challenge these actions in federal courts.

Posted by cwillia11 | Report as abusive

The latest on states declaring bankruptcy

Jan 27, 2011 20:34 UTC

Some Republicans are against the idea, but a couple of heavy hitters — Jeb Bush and Newt Gingrich — continue to be for it. Here is a bit from their LA Times op-ed:

First, as with municipal bankruptcy, it would have to be completely voluntary.

Second, as with municipal bankruptcy, a new bankruptcy law would allow states in default or in danger of default to reorganize their finances free from their union contractual obligations. In such a reorganization, a state could propose to terminate some, all or none of its government employee union contracts and establish new compensation rates, work rules, etc.

Third, the new law should allow for the restructuring of a state’s debt and other contractual obligations.

When California refused to bail out Orange County, the county entered bankruptcy and emerged within 18 months. Within three years, the county returned to an investment grade rating, and it repaid 100% of the principal of the vast majority of its investors by 2000 without raising taxes.

Fourth, the federal judge reviewing the state’s reorganization plan would have the power only to accept the plan as permissible under the federal bankruptcy law, or reject it as inconsistent with that law.

Fifth, the new law should provide for triggering mechanisms to initiate the bankruptcy process that respect the sovereignty of the people of a state.

An additional benefit of a new voluntary bankruptcy law for states is that its mere existence may deter any state from ever availing itself of its provisions. If government employee union bosses know that they could have all their contracts annulled under federal bankruptcy law, either through a plan of reorganization voluntarily entered into by state leaders or by the voters through proposition, they may be far more accommodating with state governments to restructure government employee union workforces, pensions and work rules.

Also, Moody’s has begun to take a closer look at state pension obligations, creating new metrics that combine debt and pension liabilities:

statesmoodys

COMMENT

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Did Wall Street nix GOP push to let states go bankrupt?

Jan 25, 2011 17:49 UTC

As they used to say in the Soviet Union, “It’s no coincidence.” At least, I suspect is isn’t. Yesterday, House Republican Majority Leader Eric Cantor came  out strongly against the idea of changing the federal bankruptcy code to let states declare bankruptcy, an idea being pushed by some Republicans, including Newt Gingrich:

“I don’t think that that is necessary because state governments have at their disposal the requisite tools to address their fiscal ills,” Cantor said. ”They’ve got the ability to enter into new negotiations if there are any collective bargaining agreements in place. They’ve got the ability to adjust levels of spending as well as revenues at the state level.”

Yes, but filing for bankruptcy would allow states to restructure government union contracts. Even the threat of doing so could make negotiations easier. That’s arguably how it worked for U.S. automakers. Despite incremental concessions over the years due to the vague threat of bankruptcy, only the reality of an actual bankruptcy, instigated by Washington, achieved sweeping change — whether at General Motors and Chrysler, which filed, or Ford, which avoided doing so. States don’t have that ability right now.

But let’s speculate a bit, let’s try and connect a few dots:

1. In 2010 election cycle,  Wall Street campaign contributions shifted to Republicans from Democrats. For instance, Goldman Sachs, via its PAC and employees, allocated 59 percent of political contributions to Republicans in 2010 against just 26 percent in 2008.

2.  Wall Street does not like the idea of states being given the power to file for bankruptcy. Such a move might spook markets, or spook them even more:

The municipal bond market, which has recently been rocked by fears of possible defaults, could suffer another blow, driving up borrowing costs further, if the legislation gained traction. The idea is “clearly not beneficial to an already fragile municipal market,” said Chris Mauro, municipal strategist for RBC Capital Markets, in a statement.

It might hurt their holdings of state bonds. Overall, banks own some quarter-trillion bucks worth of state and local debt.

3. Also, some Wall Street firms make a lot of money off the public pension system and don’t want to get on the wrong political side of the issue. Take the Blackstone Group, a private equity firm.  More than a third of its investors are public pensions. Here is the text of  a press release it put out last week:

Blackstone’s view on public employee pensions is clear and unambiguous: We believe a pension is a promise. Working men and women should not have to worry about their retirement security after years of service to their communities. We oppose scapegoating public employees by blaming them for the structural budget deficits that cities and states face. We at Blackstone are committed to helping public employees retire with confidence in the strength and reliability of their pensions.

4. Billionaire Blackstone CEO Steve Schwarzman is a big Republican moneyman who famously likened Democratic efforts to impose higher taxes on private equity firms to Adolf Hitler’s invasion of Poland. “It’s a war. It’s like when Hitler invaded Poland in 1939.”

5. Many Republicans would love to cement their rekindled financial relationship with Wall Street heading into 2012 when they have a good chance of retaking the Senate.

Now there is a reasonable argument against giving state’s this new power. But the anti-bankruptcy GOPers have yet to supply it. Perhaps other forces are at play. If not, more explanation is needed.

COMMENT

For those of you citing the Contracts clause and arguing that this would be unconstitutional:

“No state shall . . . pass any law . . . impairing the obligation of contracts.”

This would be a federal law–as bankruptcy courts are arms of the federal judiciary. When you hear about “Chapter 7 bankruptcies,” for example, we are talking about Chapter 7 of Title 11 of the United States Code. The Contracts Clause does not restrict the ability of the federal government to interfere with existing contracts.

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A liberal dream plan for GM

Jun 1, 2009 17:56 UTC

MIchael Moore makes the following minor and humble suggestions to the White House about what it should do with its 60 percent stake in General Motors. Some excerpts:

1. Just as President Roosevelt did after the attack on Pearl Harbor, the President must tell the nation that we are at war and we must immediately convert our auto factories to factories that build mass transit vehicles and alternative energy devices.  … President Obama, now that he has taken control of GM, needs to convert the factories to new and needed uses immediately.

2. Don’t put another $30 billion into the coffers of GM to build cars. Instead, use that money to keep the current workforce — and most of those who have been laid off — employed so that they can build the new modes of 21st century transportation. Let them start the conversion work now.

3. Announce that we will have bullet trains criss-crossing this country in the next five years

4. Initiate a program to put light rail mass transit lines in all our large and medium-sized cities. Build those trains in the GM factories. And hire local people everywhere to install and run this system.

5. For people in rural areas not served by the train lines, have the GM plants produce energy efficient clean buses.

6. For the time being, have some factories build hybrid or all-electric cars (and batteries).

7. Transform some of the empty GM factories to facilities that build windmills, solar panels and other means of alternate forms of energy.

8. Provide tax incentives for those who travel by hybrid car or bus or train. Also, credits for those who convert their home to alternative energy.

9. To help pay for this, impose a two-dollar tax on every gallon of gasoline.

Me:  I am not sure what is more far fetched, this plan or the belief that Obama would actually try and implement anything as radical as this plan. Just take a look at the way Obama is letting his cap-and-trade plan get watered down. Folks like Moore really don’t understand the guy they voted for.

COMMENT

I was out west this spring and driving about in my vintage 2001 Saturn when I decided that it was up to me to keep the promise of America’s automobile industry alive – so I tried to a dealer owned coop to save Saturn. This was a dangerous moment as I had not been authorized by anyone involved in making, shipping, selling or storing Saturns. In fact, I have had nothing whatsoever to do with the car industry except to persist as a committed “try to buy American” consumer. It would be nice if others among the original sold on Saturn buyers joined me and raised a protest about GM’s disposal plans for one the last great car brands made in the USA.

To some degree this mad adventure had something to do with the wild west. There I was in a setting that has been sending natural resources including raw minerals and livestock overseas where manufacturers convert them into products for us to import and buy. It seemed to me that this time we wouldn’t be bothering to ship anything of a made in America nature, we’d just let foreign manufacturers step in, extract the value of the Saturn name and make that once great manufacturing venture part of the growing trend to colonize the world for a multi-national corporation.

I had heard that GM’s executives were preparing for bankruptcy and that they had decided to stand back, stay quiet and let one of the nation’s premiere auto brands be plundered. Even knowing this, I still found it shocking to learn that India’s Tata Motors was among number of serious contenders for the Saturn brand. It was prepared to buy out the brand and take on the dealerships in order to have speedy access to a far reaching and friendly national distribution system. Saturn would thus become an outlet for cheap, fuel efficient Indian made minicars. Alternative American proposals were not much better. Mega scale car dealers like Oklahoma‘s Moore family and Michigan’s Roger Penske are also trying to buy the brand so that they can convert Saturn’s franchise operators into sales centers for other small cars made offshore.

Tata might not be a household word in the continental US but it is an enterprise that has put much of India’s enormous middle class on wheels. Less we forget, this is a population bigger that of the USA today and as hungry for foreign oil as we are. Their little $2,000 yellow and red cars are likely to start moving people onto roads here sometime this year and it would be a pity to see them carry the Saturn label to a depth lower than the level GM imposed.

As it happened, GM introduced Saturn to do what TaTa did in India. It was trying to capitalize on demands by first time car buyers for low-cost, fuel efficient cars . An oil production crisis in the 1970s had made Americans aware of how their gas guzzling ways could expose the entire nation to economic disaster. They saw Saturn as a way to attract consumers who were showing preferences for Japanese and German cars that were fuel efficient and long lasting – two qualities that were not Detroit made autos strong suits.

The early generation of Saturns were aimed at buyers like me – first time women car buyers who knew nothing about what went on under a car hood but wanted a assurance that their dealer would. In fact, I was among the early cult of satisfied Saturn owners and though I never attended one of the early “owner reunions” at its Tennesee plant, I did feel a strong allegiance to the brand and to the people at its dealers who kept true to their promises of easy maintenance and reliable service. It is a pity that more of those contented consumers didn’t stand up to GM as I have in these past few days. I would love to see more visit dealers to ask them to get together as a group and form a coop to make a new generation of different American cars.

My enthusiasm for the car had started in 1989 when I had a chance to visit a prototype for Saturn’s pilot plant that had been set up in Detroit. It was clear then that it was a different kind of car company. GM had learned from studying Japan’s Demming quality control principles. Their attention then to consumers’ concerns was effective. Nearly ten years after early, long-lasting models stopped being made, people still think well of the brand and of the dealers selected to represent it. Some of those early 90s models are still on the road, chugging along with their original engines, power trains, plastic body panels and brilliantly engineered chasis.

I bought my first in 1991 and had three others over the next ten years. They were terrific cars and the dealers that sold them all appeared to me to be honest and reasonable. They were true believers in the company’s ability and ready to hear and act on concerns and recommendations that their customers shared. I think if customers showed up at their doors and told them they would be back if the cars were made here in the USA again they might be prodded to get the help they need to take over the brand and its production.

I also think that labor unions should get on board about this. One of the best parts of the dog and pony show I was treated to when I toured that pilot plant years ago were discussions by management and labor about how they were going to relax old rules, work better together and find ways to continuously improve the Saturn. They said they were determined to offer American drivers alternatives to the high pressure purchasing practices of other car dealerships and put sales people on salaries to assure high levels of customer service. They did that and more.

Within just a few years of its introduction, Saturn consumers ratings were sky high and the relatively low priced little cars from Tennessee met and surpassed customer satisfaction ratings given to higher priced and bigger luxury cars. Profit margins were low but consistent. This wasn’t good enough for the high rollers in Detroit that needed giant profits to attract and hold investors and pay enormous salaries to high level GM Executives.

So Saturn’s innovation era ended and it became just another branded GM product line.

I stopped buying when the rules changed. So did lots of others. After 2001, Saturn became little more than a retailer of Renault and Opal cars. Dealers no longer stood alone and the once fabled Spring Hill factory was no longer the exclusive producer of Saturn cars. Unique, innovative design standards were gone and the attributes that distinguished my last plastic sided model were no longer to be found.

In my view, Detroit’s feudal systems wore out the company. Its inability to accept low profits as a return on its early stage investments has killed it. Saturn dealers are an endangered species. Their lots are holding grounds for a dead brand and remaining Saturn cars dramatically depreciating in value. Highly leveraged dealers have been left holding the goods. More than 10 percent of Saturn dealers have already closed their doors and when you go into showrooms as I have done since last week, you feel like you have come upon a cohort of mourners getting ready for bankruptcy and job changes. GM has done little to stop the hemorrhaging and in fact opened new wounds with announcements that it would receive offers for Saturn up at the end of spring and would then decide how to dispose of its brand assets while reorganizing through a possible bankruptcy.

All of these ruminations have of course made possible by American taxpayers who have thrown a few trailer loads of dollars into GM to keep it afloat. But imagination and innovation are in short supply among that company’s senior level managers. Because of this, I decided it was up to eager beavers like me and other old time Saturn owners to keep the rings of a unique American car turning. So I turned to my friends the cooperators to figure out how. There is a new, 21st century type of cooperative that a few enterprises like Organic Valley Yogurt, True Value Hardware and Carpet One flooring stores are using to beat out competitors. Stakeholders with property, production capabilities and shared needs band together to purchase product, secure supplies, institute management standards and jointly assure consumers that the promise of a brand name message will be met. Simple enough….they have numbers large enough to press down margins set by producers and service providers and pass those on to the people who buy from them.

In a few cases, these new types of coops actually have a hand in manufacturing. That is where I think the focus of an effort to save Saturn should be and where consumers should focus their arguments to keep Saturn going. We need to be able to make high quality, innovative cars here in the USA. Saturn has shown us that it could do that when it isn’t tethered to GM. It still has the capacity to outperform offshore manufacturers and can apply what we now know about alternative fuels and power trains to new car designs.

Despite consumer demands for alternative cars and the standing lines that formed for Japanese hybrids, GM chose to ignore Saturn’s potential to deliver on these technologies. It forced Saturn to become a conventional car brand and devalued its potential for innovation because earnings didn’t reach stratospheric heights that GM executive demanded. When franchise owners were pulled into the GM fold, the buffer that their Saturn rings had once created collapsed. A cooperative could put them back in place and a clamor of hold the line from consumers could give stakeholders time to form one.

If the dealers did come together with the intentions of serving as sponsors and outlets for alternative energy powered cars, they just might be able to outbid contenders like Roger Penskie, TaTa and the Oklahoma Moore Familys Black Oak Partners LLC. With help from local legislators, cooperative investor resources, rural utility funds, and even US Treasury assisted GMAC Finance, they could raise capital needed to make a downpayment on America’s automotive future. They could again work cooperatively with labor and sell off their current GM produced inventory with commitments to extend their warranties and stand solidly behind them. Most importantly enlist a new cohort of alternative energy minded engineers work with the US Department of Energy to create new cars that will in fact put more rings around Saturn. If we don’t, we are sure to see the stimulus money being paid out to keep Americans buying go into the hands of offshore manufacturers who have taken our know how and sold it back to us at premium prices. So, my challenge to Saturn is wake up, get organized, and cooperatively work for a revival that our country needs and deserves. As crazy as it sounds, listen to your buyers and keep going.

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