Monday, November 24, 2008

GOPUSA ILLINOIS Daily Clips - November 24, 2008

GOPUSA ILLINOIS Daily Clips - November 24, 2008

-- David Axelrod and Bill Daley warn Big 3: No plan, no cash - Mike Dorning (FROM THE ARTICLE: Still, Obama advisers and Democratic lawmakers stress the importance of maintaining the health of the auto industry. But House Minority Leader John Boehner (R- Ohio) expressed skepticism that automakers will produce a credible plan. "I'm not sure that they will have a plan by early December, a real plan," he said on "Fox News Sunday."),0,3746365.story
-- Democrats expect automakers to prove they're worth aiding; Republicans skeptical of bailout - AP (FROM THE ARTICLE: U.S. automakers are struggling to stay afloat heading into 2009 amid an economic meltdown, a precipitous drop in sales and a tight credit market. General Motors Corp., Ford Motor Co., and Chrysler LLC went through nearly $18 billion in cash reserves during the last quarter, and GM and Chrysler have said they could collapse in weeks. Detroit's car makers employ nearly a quarter-million workers, and more than 730,000 other workers produce materials and parts that go into cars. If just one of the automakers declared bankruptcy, some estimates put U.S. job losses next year as high as 2.5 million.),0,1937741.story
-- SUV sales stir as gas prices sink But consumer tastes are changing - Greg Burns,0,1155954.column
-- Cullerton says Democrat infighting embarrassing - Rick Pearson
-- GOP pokes Obama on 'Barackbook' - Joel Hood,0,5269760.story
-- Economy weakens bids for Illinois' last casino license Gaming Board on Tuesday is expected to delve into the money details - Monique Garcia,0,3743867.story

-- FROM THE ARTICLE: Obama's top aides say they are holding back on a government bailout of the auto industry until U.S. automakers can show Congress they are worth rescuing. Axelrod warned Detroit's big three they must retool and rationalize their industry for the future. (Includes video clip)

-- Democrats expect concessions from auto companies - AP
-- We need Iacocca to fix auto industry - Frank J. Sasevich, Bolingbrook
-- As sales tax revenue falls, local towns face tough budget choices - Josh Stockinger
-- Circus elephants and Chicago aldermen behind the velvet curtain - Chuck Goudie
-- DIERSEN HEADLINE: Jean Rodgers of Broadview argues that GOD is a socialist if not a communist and that GOD has no problem with abortion

-- Obama should step in to assist automakers, Levin says -- Kathleen Gray
-- To save automakers, government should take them over - Ralph Shaffer

-- Bail out automakers to stop fear from depressing economy - Judith Shapiro
-- Demoting Dingell hurts Obama's agenda - Susan J. Demas (FROM THE ARTICLE: The reaction from Republicans was swift and brutal, decrying the end of moderation. "Replacing a man who has spent his entire life serving Michigan's manufacturers with a man who has spent his career fighting to drive manufacturing out of existence is a terrible way to start a new day," declared U.S. Rep. Mike Rogers, R-Brighton.)

-- Unsold foreign cars pile up at U.S. port Backlog of unwanted autos is only part of a broader 5.5% rise in U.S. inventories amid shrinking demand - Matt Richtel

-- For Detroit, Chapter 11 Would Be the Final Chapter - Spencer Abraham
(THE COMMENTARY: Many commentators and members of Congress have declared that the best hope for the Big Three auto companies is to declare bankruptcy. Airlines have gone through bankruptcy and adjusted, after all, so why can’t carmakers? This comparison is appealing, but flawed. Almost every carmaker that has ever gone bankrupt has disappeared for good. And there is no reason to believe the Big Three would not do the same. Chapter 11 filing would almost surely lead to liquidation. Just as financial institutions depend on the confidence of those with whom they do business (as Bear Stearns and Lehman Brothers discovered), automakers depend on the confidence of car buyers. To purchase a car is to make a multiyear commitment: the buyer must have confidence that the manufacturer will survive to provide parts and service under warranty. With a declaration of bankruptcy, that confidence evaporates. Eighty percent of consumers would not even consider buying a car or truck from a bankrupt manufacturer, one recent survey indicates. So once a bankruptcy proceeding got started, the company’s revenue would plummet, leading it to hemorrhage cash to cover its high fixed costs. That would thwart any attempt at reorganization, and the case would likely move inexorably toward liquidation under Chapter 7 of the federal bankruptcy code. Debtor-in-possession financing - which is what the bankrupt need in order to pay for the continued operation of their business - would not be available in the vast amounts required, given the plunge in revenue. A bankruptcy filing by even one of the Big Three would probably set in motion a cascade of smaller bankruptcies by suppliers of car parts, as the money the company owed them (which would be classified as an unsecured claim) could not be paid until it exited bankruptcy. And this loss of suppliers would almost certainly overwhelm the other two carmakers. There would also be a severe contraction in the availability of trade credit from suppliers, which amounts to tens of billions of dollars. And as surely as day leads to night, bankruptcy proceedings would be followed by liquidation. In a flash, the American carmaking business, representing about 10 percent of the nation’s retail sales, would begin to disappear. For those concerned about the potential price of a federal bailout for Detroit - and I’m one of them - the reality is that this cost would be dwarfed by the long-term spillover costs of bankruptcy and liquidation. Nearly three million jobs would be lost in the first year if all three car companies closed and their suppliers absorbed the shock, according to the Center for Automotive Research. That would mean tens of billions of dollars in pension liabilities would be transferred to the Pension Benefit Guaranty Corporation, the federal insurance fund that protects the pensions of nearly 44 million American workers but already has a $10.7 billion deficit. We’d also see an influx of Americans who have lost their health insurance onto the rolls of Medicare and Medicaid, costing billions of dollars more. And the budgets of the so-called “auto states,” mainly in the Midwest, that depend heavily on the domestic car manufacturing industry would be wrecked, and that would likely lead to both higher taxes and depressed economic growth. Bankruptcy would also deliver a painful shock to the country’s already damaged financial system, which draws significant revenue from, and has significant credit exposure to, auto loans. For the past decade, an average of roughly eight million vehicles made by General Motors, Ford and Chrysler have been sold annually. That translates into about $190 billion in auto financing each year. Given that the average life of an auto loan is two years, an estimated $350 billion to $400 billion worth of exposure is thrashing around our financial system. And the value of this paper would drop along with the value of the cars. Regional and national banks, as well as credit unions and finance companies, hold these loans on their balance sheets. Banks also have exposure through investment vehicles whose value is tied to car loans. And the pain would be intensified because the banks have not hedged their exposure to auto loans. There’s no denying the American auto companies have made major mistakes, by over-investing in S.U.V.’s, for example, and failing to quickly streamline their manufacturing. But allowing one of them to file for bankruptcy would be a disastrous course. If we knew then what we know now about the systemic shock to our economy, would we have allowed Lehman Brothers to go bankrupt? Absolutely not. If we let any of the Big Three go bankrupt, we will set in motion a chain of events that will cause us, in six months, to ask again: How did we let this happen? Spencer Abraham is a former United States secretary of energy under President Bush and a former United States senator from Michigan. He is the chairman and chief executive of the Abraham Group, which advises energy and investment companies, and is a board member of Occidental Petroleum.)
-- Big Three’s Troubles May Touch Financial Sector - Zachery Kouwe and Louise Story

-- Romney Prescribes Tough Love for Detroit Opposition to Auto Bailout Comes After Populist Push in Michigan Primary - Rick Klein (FROM THE ARTICLE: Romney entered the national debate this week with an op-ed in The New York Times that carried an eyebrow-raising headline: "Let Detroit Go Bankrupt." His stark statements caught many political observers -- including some of his most influential backers in Michigan -- by surprise. "It's a complete 180 . . . People are dismayed by his betrayal," said Oakland County executive L. Brooks Patterson, a veteran Republican elected official from the Detroit suburbs who was a prominent Romney supporter in the primaries. "I just can't believe that these words tumbled out of his mouth, given his background, given everything he said during the campaign.")
-- In Wake of Rev. Wright, Obama Seeks New Church In Picking Church, Obamas Will Weigh Political, Religious and Personal Feelings - Russell Goldman

-- U.S. Auto Makers Look to Federal Sales Incentives - John Stoll and Monica Langley

-- GM May Seek Debt Cut, New Union Rules to Win U.S. Aid - Jeff Green

-- UAW has to be even more flexible now - Editorial

-- Auto woes hitting home As GM continues to slip, area officials pondering what could happen to Vette city - Jenna Mink

-- How Obama plays poker could be telling - Christopher Wills (DIERSEN: Republican Senator Bill Brady is quoted as saying: “I always used to kid him that the only fiscally conservative bone in his body I ever saw was at the poker table with his own money.”),obamapoker092407.article
-- TV can lead to teen sex - Dr. Laura Berman,CST-FTR-berman24.article
-- DIERSEN HEADLINE: It is not surprising that Democrats and RINOs promise amnesty, more mass immigration, more guest worker programs, multilingualism, more preference for minorities, etc. Recent history shows that generally, immigrants vote for the political party and the politician that promises to give immigrants the most preference.,CST-EDT-open24b.article

-- Rauschenberger Wants to Block Restoration of the Fairness Doctrine

-- Talk show message in ear of the beholder - Vincent A. Froberg, Elgin,3_4_EL24_LTRFROBERG_S1.article

-- DIERSEN HEADLINE: Christopher Wills promotes John Cullerton
-- DIERSEN HEADLINE: SJ-R promotes John Cullerton

-- State’s unpaid bills only affect ‘least of these’ - Chuck Sweeny

-- The Lure of Township Office - Cal Skinner
-- DIERSEN HEADLINE: Lauzen to address a special Illinois Constitution Party convention in Peoria on January 17

-- 'Disgusting' Bias for Obama, Time Writer Admits

-- Michael Moore: a communist agitator - Mark Anderson

-- I Beg Your Pardon: Hillary and Holder? - Lisa Richards

-- Power Grab at College of DuPage - Scott Jaschik

-- Bra for the boys an online bestseller in Japan

-- As economy gets uglier, governments sell online "DuPage County, Ill., is auctioning a framed, autographed Sammy Sosa Cubs jersey for a minimum bid of $156.77." - Valerie Bauman,0,2776893.story

-- Gay-marriage debate roils, unites Mormons Fallout over California vote - Michael Paulson

-- DIERSEN HEADLINE: Obama/Ayers promoting Texas A&M "adviser" is "ashamed beyond words"

-- Rich get $49 million in farm aid - Philip Brasher

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