November Sales

| Fri Dec. 12, 2008 11:44 AM EST

NOVEMBER SALES....Retail sales were bad last month, but not terrible:

Retail sales dropped by 1.8% last month, the Commerce Department said Friday....The 1.8% drop was mildly better than expected. Economists expected a 2.2% decline in sales during November, traditionally a busy shopping time as the holidays approach.

....Stripping away sales at gas stations, demand at all other retailers fell 0.2% in November. Sales are falling because of dropping prices for gas.

"Lower" demand for gasoline is meaningless, since it's based solely on the fact that gasoline prices are dropping like a rock. It's actually good news.

Inflation in the rest of the economy is hard to guess, but it was probably up a small amount. In real dollars, then, seasonally adjusted retail sales in November were probably still down compared to October, but perhaps only by 0.3% or so. Could be worse.

And year-over-year, of course, it was worse. Compared to this time last year, retail sales are way, way down. Everyone's credit cards are maxed out, and for the first time since records have been kept people are paying them off instead of running them up. This had to happen eventually, but it's bad news for the economy while it's going on. Bottom line: it's time for Uncle Credit Card to step up to the plate.

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White House Will Just Bail Out Detroit Itself, Without Help From You Jerks in Congress

| Fri Dec. 12, 2008 10:52 AM EST

With Senate Republicans intent on doing nothing, the White House (which supported the auto industry bailout so strongly that Dick Cheney actually went to Senate Republicans on Wednesday and said, "If we don't do this, we will be known as the party of Herbert Hoover forever") is considering using a portion of October's $700 billion bailout package intended for Wall Street to save the automakers. Here's a press release from Press Secretary Dana Perino:

It is disappointing that while appropriate and effective legislation to assist and restructure troubled automakers received majority support in both houses, Congress nevertheless failed to pass final legislation. The approach in that legislation provided an opportunity to use funds already appropriated for automakers, and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds go only to firms whose stakeholders were prepared to make the difficult decisions to become viable, competitive firms in the future.
Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms. However, given the current weakened state of the U.S. economy, we will consider other options if necessary - including use of the TARP program -- to prevent a collapse of troubled automakers. A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time.

That's how off-the-deep-end congressional Republicans have become. They're making the Bush White House look sane.

Update: Speaking of off-the-deep-end, one conservative blogger is now claiming that benefits to gay partners are sinking automakers.

More Substantive Update: Treasury is telling the press it will only do enough to keep the Big 3 afloat until January, when the new Congress (which will have larger Democratic majorities) can decide on a more permanent course of action.

Michigan Will Not Vote Republican For a Generation

| Fri Dec. 12, 2008 10:02 AM EST

When Lyndon Johnson signed the Civil Rights Act in 1964, he reportedly turned to his press secretary, the now well-known journalist Bill Moyers, and said, "We have lost the South for a generation."

I think it's safe to say we've seen something similar this week. Mitch McConnell and Senate Republicans blocked a bailout for the auto industry late Thursday night, leaving the Big 3 and the hundreds of thousands who rely on them for their daily wages in the lurch. Here's the key point: McConnell and company didn't decide that ruining Christmas for thousands of families was worth it because they felt Detroit needs to be retrofitted for a 21st century economy and that that fundamental realignment can only happen by scrapping the whole operation and starting over under new management. That would be a legitimate reason for opposing the bailout. I'm not sure I agree with it — if we have hundreds of billions for the financial industry, I'm sure we can find some for the automakers that the government can tie to innovation benchmarks and new management quotas. But it's a reasonable position to take.

No, the GOP decided that they would block the auto industry bailout because they couldn't take a big enough jab at the United Auto Workers union. Both Democrats and the UAW agreed that Detroit's workers should lower their wages and reduce their benefits to match those of Toyota, Nissan, and Honda workers in the United States. They wanted to do it by 2011. The Republicans wanted it done by 2009. And because that difference couldn't be resolved, the GOP blocked the bailout and likely cratered a massive segment of the Michigan economy and a significant segment of the American economy.

And that's why I say Michigan — as recently as November a crucial presidential swing state — won't vote Republican for a generation, or more. Republicans can crow all they want about how they are letting the "free market" reign, but the free market doesn't vote. Everyday people, who understand the Republican Party opposed a bailout of their industry because the screws being twisted on them weren't being twisted enough, well, they do vote. And they'll likely do anything they can to vote against McConnell and his pals.

Update: There are two possibilities for saving the auto industry at this point. (1) If the Big 3 can find a way to limp through the holidays, the enlarged Democratic majorities that will take office on January 6 will find a way to pass a bailout, which the White House will then sign. (2) Treasury can bail out the auto industry using TARP funds. There are already hints that this will happen.

Photo from flickr user donbuciak used under a Creative Commons license.

No Bailout

| Fri Dec. 12, 2008 1:18 AM EST

NO BAILOUT....Senate Republicans have scuttled the auto bailout bill. Apparently Democrats and the UAW had agreed to deep wage cuts and work rule changes, but it still wasn't enough:

The automakers would [] have been required to cut wages and benefits to match the average hourly wage and benefits of Nissan, Toyota and Honda employees based in the United States, and the companies would have to impose equivalent work rules.

It was over this proposal that the talks ultimately deadlocked with Republicans demanding that the automakers meet that goal by a certain date in 2009 and Democrats and the union urging that the deadline wait until 2011 when the U.A.W. contract expires.

This is nuts. If you're just flatly against the bailout, fine. Vote against it. But if the wage cuts, along with the debt-for-equity swap that was also part of the bill, were enough to bring you around, why would you cavil at the cuts happening in 2011 instead of the end of 2009? It's only about an 18 month difference, and cutting wages makes a lot more sense in 2011 than it does in the middle of a massive recession anyway.

Another shining moment in the history of the modern GOP. Ideology uber alles.

Saving Detroit

| Thu Dec. 11, 2008 8:06 PM EST

SAVING DETROIT....Earlier this morning the auto bailout bill seemed destined for failure, but later in the day Harry Reid and Sen. Bob Corker (R–Tenn.) were busy trying to patch together one final effort at compromise:

As Reid spoke, a bipartisan group of senators and representatives from Detroit's Big Three automakers and the United Auto Workers union were meeting one floor below in the ceremonial Foreign Relations Committee Room, trying to broker an 11th-hour deal to save the rescue package.

....Corker today put forward a plan that would impose far more stringent auto industry restructuring standards than the House bill. It would reduce the wages and benefits of union workers at domestic car manufacturers by requiring the total labor costs of GM and Chrysler to be "on par" with those in non-union U.S. plants of foreign automakers such as Toyota and Honda.

OK, but I have one question: Is Corker also insisting that the total labor costs of GM's white collar management staff be on on par with those of Toyota and Honda? Just curious.

ProPublica: Bush's Presidency, Harper's Index-style

| Thu Dec. 11, 2008 7:14 PM EST

From ProPublica:

Number of Illegal immigrants deported in 2001: 110,000. In 2008: 350,000.

Number of Freedom of Information Act (FOIA) requests in 2000: 2.2 million. In 2007: 21.8 million

Number of personnel who process FOIA requests in 2000: 5,378. In 2007: 5,367

It's pretty grim reading. But it confirms that we were right to throw that particular bum out.

[Also, speaking of ProPublica, check out their nifty 'Degrees of Hank Paulson' interactive game while you're there.]

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Obama and Afghanistan

| Thu Dec. 11, 2008 5:03 PM EST

OBAMA AND AFGHANISTAN....Michael Crowley talks to counterinsurgency guru John Nagl after a visit to Afghanistan:

Winning in Afghanistan, he realized, would take more than "a little tweak," as he put it to me from back in Washington a few weeks later, when he was still shaking off the gritty "Kabul crud" that afflicts traveler's lungs. It would take time, money, and blood. "It's a doubling of the U.S. commitment," Nagl said. "It's a doubling of the Afghan army, maybe a tripling. It's going to require a tax increase and a bigger army."

....Nagl's rule of thumb, the one found in the counterinsurgency manual, calls for at least a 1-to-50 ratio of security forces to civilians in contested areas....By Nagl's ratio, Afghanistan's population calls for more than 600,000 security forces. Even adjusting for the relative stability of large swaths of the country, the ideal number could still total around 300,000 — more than a quadrupling of current troop levels. Eventually, Afghanistan's national army could shoulder most of that burden. But, right now, those forces number a ragtag 60,000, a figure Nagl believes will need to at least double and maybe triple.

So how's that ragtag force coming? Joe Klein reports on his visit with British Lieutenant Colonel Graeme Armour in Helmand province last week:

Almost all the recruits were illiterate. "They've had no experience at learning," Armour said. "You sit them in a room and try to teach them about police procedures — they start gabbing and knocking about. You talk to them about the rights of women, and they just laugh."

....The war in Afghanistan — the war that President-elect Barack Obama pledged to fight and win — has become an aimless absurdity....The far more serious problem is Pakistan, a flimsy state with illogical borders, nuclear weapons and a mortal religious enmity toward India, its neighbor to the south. Pakistan is where bin Laden now lives, if he lives.

This has now become conventional wisdom: the real problem is Pakistan. So far, however, in the same way that plans for rescuing General Motors rely mostly on handwaving about "restructuring," plans for solving the Pakistan problem rely mostly on handwaving about "getting tough." Unfortunately, hardnosed details on how this is actually going to work are pretty thin on the ground. If Obama wants public support for an escalation of the war in Afghanistan, his national security team better start providing those details pretty quickly.

Golden Globe Nominations: Huh?

| Thu Dec. 11, 2008 4:31 PM EST

mojo-photo-goldenglobes2.jpgThe always-good-for-a-laugh Hollywood Foreign Press Association put out their Golden Globe nominations today, and while elevating a few interesting choices, they overlooked a few things that make one scratch one's head. First up, Milk had been scoring some critics' awards, but apparently didn't impress the HFPA, snagging only one nod for Sean Penn. His co-star, James Franco, got a nomination as well, but not for Milk--for Pineapple Express. You heard me. Other notable shutouts include WALL-E, coming off its recent LA film critics win for "best film" with only an animation nod, and The Dark Knight, making a last-minute promotional push for some awards, but also receiving only one, a posthumous nomination for Heath Ledger. Well, I hated that movie.

After the jump: more mockery, and what did Mick LaSalle think?

Powered By Java: Me & My Car

| Thu Dec. 11, 2008 4:03 PM EST

800px-A_small_cup_of_coffee.JPG Looking for a spare 340 million gallons of biodiesel? Waste coffee grounds can provide a cheap, abundant, and environmentally friendly source of biodiesel fuel for cars and trucks. Spent grounds contain 11-20 percent oil by weight—about the same as rapeseed, palm, and soybean oil. Growers already produce more than 16 billion pounds of coffee yearly and the spent grounds generally wind up in the trash.

To see if that oil from those grounds is worth putting into your diesel tank, researchers from the U of Nevada collected separated the oil from the grounds and used an inexpensive process to convert 100 percent of it into biodiesel.

The result: a coffee-based fuel that actually smells like java. Mmmm. Plus it's more stable than traditional biodiesel due to the coffee's high antioxidant content. The solids left over from the conversion process can be converted to ethanol or used as compost. The researchers estimate the process could make a profit of >$8 million a year in the U.S. alone. Worldwide it could produce 340 million gallons of biodiesel annually. The team plans to develop a pilot plant in the next eight months.

The study appears in the American Chemical Society's Journal of Agricultural and Food Chemistry. Drink it up. Wake up your car.

Julia Whitty is Mother Jones' environmental correspondent, lecturer, and 2008 winner of the PEN USA Literary Award, the Kiriyama Prize and the John Burroughs Medal.

The Best Part of Obama's Multicultural Cabinet: The Effortlessness Of It

| Thu Dec. 11, 2008 3:34 PM EST

I think Ben Smith gets this exactly right:

Bill Clinton, former aides say, worked hard for his Cabinet that "looks like America," and reached outside the normal establishment channels for some of his picks. George W. Bush, reaching into a less diverse GOP, did the same in some cases.
Sixteen years later, Obama hasn't had make any apparent special effort to avoid having a cabinet dominated by white guys: People like Susan Rice, Steven Chu, Eric Shinseki, Hillary Clinton, Bill Richardson, Janet Napolitano, and Eric Holder are obvious choices, with their own power bases, relationships with Obama, and/or establishment credentials -- some earned at high levels of the Clinton administration -- that the notion of a special effort to ensure diversity at the top level of this administration seems sort of irrelevant.

It's true. All of the appointees Smith lists are minorities or women, but they are so accomplished and talented that no one has dared called them affirmative action picks. They mirror Obama in that way.

In my short article on things Bush got right (did I mention it's a short article?), I noted that Bush put together the most diverse executive branch team in history. Obama's will rival his but may not top it. The important point, though, is that Bush's cabinet secretaries and aides performed so poorly that it almost felt like W. was making a high-stakes argument against affirmative action. He didn't know it, but in actuality he was making a high-stakes argument against prioritizing loyalty over competence. See Gonzales and Miers in that regard.