Greedy Hedge Funds Stomp Feet and Pout

Wizardkitten asked if hedge funds were trying to force Chrysler into bankruptcy and Jonathan Tasini answered: American Car Industry Held Hostage by Greedy Hedge Funds

...in a blazingly short amount of time, the Administration has forged a deal that could save thousands of jobs at Chrysler--the major banks are on board, the UAW has made more significant concessions. But all that may come crashing to a halt because of a few hedge funds who are holding the entire car industry hostage because, boo-hoo, they aren't getting enough out of the deal. What a spectacle.

Spectacle? Yeah, in a Bonnie & Clyde or Godfather sort of way.

As Tasini points out, the president lived up to his pledge, the UAW accepted concessions...

On top of concessions already given in 2005, 2007 and 2008, the UAW members have agreed to accept cuts in pay and benefits.

And even the major debt holders were on board.

Led by J.P. Morgan, the banks holding 70 percent of Chrysler's debt agreed to a deal that would effectively mean they would have to write-off a health chunk of change.

Everyone sacrificed and the administration even tossed more cash on the table and it still wasn't enough for the greedy hold outs.

Three of the bank-debt holders on the bank-steering committee, Oppenheimer Funds, Perella Weinberg Partners' Xerion Capital Fund and Stairway Cap Management, told J.P. Morgan and the other large lenders on a bank call Tuesday that they wouldn't support the deal and would advise other lenders not to support it.

I'm not a financial expert, but I think that's just dumb. Tasini thinks it's dumb too.

Even if the hold-out hedge funds refuse to make a deal by midnight tonight, forcing Chrysler to file for bankruptcy, they are unlikely to do any better in the swift bankruptcy proceedings envisioned. Do the geniuses at Perella et al. think that a bankruptcy judge, looking at a deal that has the blessing of the U.S. Treasury, the banks holding 70 percent of the debt, and the the union representing tens of thousands of workers (not to mention Fiat, which is waiting in the wings to scoop up Chrysler) will dramatically alter the outlines of the deal? No.

But, here we are: American workers, the Administration and the public generally is being held hostage by a few deal makers who run the very kind of financial firms that evaporated trillions of dollars in wealth. [emphasis mine]

And they wonder why a majority of the public believes corporate America (and particularly the financial industry) needs a new moral direction.

Health care reform still important to majority of Americans

A majority of Americans continue to say they would pay higher taxes if it meant health insurance for everyone, and health care is second only to the economy as a major domestic concern, so it makes perfect sense that a conservative group is launching a $1 million ad buy designed to scare people about a government-run health care system. If Americans want it, are willing to pay for it, and badly need it (45 million uninsured and rising at this point), rich conservatives will fight to prevent us from having it.

In this case, the group is Conservatives for Patients' Rights, headed by Richard Scott. The organization plans to spend at least $20 million on the effort and Scott is willing to throw in at least $5 million of his own money.

Who Is Richard Scott— and Why Is He Saying These Things about Health Care Reform? Scott is the former CEO of Columbia/HCA Healthcare Corp., a for-profit hospital chain that was the offspring of a merger between Columbia Healthcare and Hospital Corporation of America. His goal wasn't to improve health care and make it more accessible to people. As a hospital executive, "Scott limited “choice” and “competition” by buying up “hospitals by the bucketful” and routinely placed profits ahead of “accountability” or quality of care. During Scott’s tenure at Columbia/HCA, his cost cutting methods threatened patient care and safety."

His methods also got him in trouble with the law.

In Scott’s case, that happened a short three years after he became CEO of Columbia/HCA. In July of 1997, the FBI swooped down on HCA hospitals in five states. Within weeks, three executives were indicted on charges of Medicare fraud, and the board had ousted Scott.

The investigation revealed that the hospital chain had been bilking Medicare while simultaneously handing over kickbacks and perks to physicians who steered patients to its hospitals. One can only wonder how many of those patients really needed to be hospitalized—and how many were harmed.

The company did not fight the charges. In 2000, HCA (which by then had expunged “Columbia” from its name) pleaded guilty to no fewer than 14 felonies. Over the next two years, it would pay a total of $1.7 billion in criminal and civil fines.

Did I mention hospital bonuses?

Internal hospital records would later show that hospital executives were paid enormous bonuses, not for reducing infections or lowering mortality rates, but for meeting financial targets such as “growth in admissions and surgery cases.” In 1995 one-fourth of Columbia’s administrators won bonuses equaling 80 percent of their salaries—or more. When bonuses become that large, some critics charge, they no longer function simply as incentives. They invite fraud. Scott also did his best to avoid needy patients, questioning whether hospitals should throw their doors open to one and all. “Do we have an obligation to provide health care for everybody? Where do we draw the line? Is any fast-food restaurant obliged to feed everyone who shows up?

GoozNews has the best take on Scott and CPR:

His group shouldn't be called Conservatives for Patients Rights. It should be called Hospital Moguls for Bilking and Bankrupting America.

By the way, guess who Scott and Conservatives for Patients’ Rights hired as their public relations firm. CRC. The same group known for their work with the Swift Boat Veterans for Truth. That pretty much tells you how they plan to run their attack campaign against health care reform. Lies. Baseless attacks. Fear. Socialism. Blah, blah, blah...

You can read more about the ongoing fight to provide public health care to all Americans here, but when you hear these ads from CPR and Rick Scott remember one thing, they have health insurance. They're not worried about you. They're only worried about protecting corporate profits.

Republicans Turn to Newt for Salvation

Michigan Republicans are stuck in the past, Saul Anuzis is stuck in the past, and so is Saul's new boss - Newt Gingrich. I'll let Matt Yglesias explain:

Somehow or other the conservative movement has gotten so intellectually bankrupt that the lunatics running the asylum think that Newt Gingrich is an intelligent and canny man. Consequently, he’s snagged himself a situation where he’s in the news constantly offering aperçus like “The Democratic Party has been the active instrument of breaking down traditional marriage.”

Far be it from me to say that Newt Gingrich’s 1981 decision to ask his first wife for a divorce while she was in the hospital recuperating from cancer should bar him from commenting on the value of traditional marriage. But six months after the divorce was finalized, he married a new woman, Marianne Ginther, which suggests there was some infidelity involved. Then in 2000 he divorced Ginther and married a third woman with whom it turns out he’d been having an affair. That, I think, is a bit much. Then after that, he became a Catholic!

Seriously, does Newt really want to go down that road? Several high-profile Republicans have histories of being maritally challenged. Talk about hypocrisy.

As for Newt's recent conversion to Catholicism:

At a moment when the role of religious fundamentalism in the party is a central question for reformers, Gingrich, rather than making any kind of case for a new enlightenment, has in fact gone to great lengths to placate Christian conservatives. The family-values crowd has never completely embraced Newt, probably because he has been married three times, most recently to a former Hill staff member, Callista Bisek.

The religious right didn't embrace Newt, so now he'll try to kiss up to Catholics. He recently tweeted, "It is sad to see notre dame invite president obama to give the commencement address Since his policies are so anti catholic values."

He was also recently interviewed by Christianity Today magazine. Their article started off by saying, "As the Republican Party searches for a future leader, former Speaker of the House Newt Gingrich pops up on the short lists."

Newt can't manage to stir up controversy with the religious right anymore, so he's aligning himself with right-wing Catholics.

But the growing movement to stop Obama's visit isn't your ho-hum sort of Catholic League media dust-up, where Bill Donohue harumphs on television and then goes away. It's part of a well-funded lobbying effort by a group of right-wing Catholics to run liberal Catholics, and dissenting doctrine, out of the church, and to recruit the remainder of the faithful for the GOP.

Newt's alliances may be new, but the tactics are the same and still out of touch with mainstream Americans. Someone should tell him and other old school Republicans that 59 percent of Catholics still think Obama is doing a good job, and a recent Gallup poll finds Catholics are actually more liberal than other Americans on the so-called moral issues.

Pay attention, Republicans!

Hate Crime Legislation Vote Later This Week

I don't keep up with gay rights as much as I should, so I was surprised to read that Deb Price now writes the first nationally syndicated column on gay issues. Good for her. I only know her work in the Detroit News. (Does anyone else find it ironic that she writes for them?)

Anyway, outside of reading quite a bit about gay marriage in recent months, I didn't realize the Obama administration has been reaching out to the gay community in so many ways. Here are some highlights from Price's recent column, including a mention about the hate crimes legislation that lawmakers will be voting on later this week.

The Obama White House invited gay leaders to the health care and fiscal responsibility summits, the signing of the Lilly Ledbetter Fair Pay Act and the executive order creating the White House Council on Women and Girls, and an online town hall. Gay parents were encouraged to bring their kids to the Easter egg roll. [...]

The White House outreach has included Mara Keisling of the National Center for Transgender Equality and Rebecca Fox of the National Coalition for LGBT Health. [...]

And Obama is salting gay talent through his administration. Most noteworthy is John Berry, confirmed by the Senate as director of the Office of Personnel Management. That puts a gay man in charge of the 1.9 million federal employees, including overseeing their benefits.

Other appointees include Emily Hewitt, an ordained Episcopal priest, as chief judge of the U.S. Court of Federal Claims. A peek at Hewitt's biography on her official court site shows the comfort Obama's gay choices feel: "Chief Judge Hewitt is married to Eleanor Dean Acheson."

Obama tapped Fred Hochberg to chair the U.S. Export-Import Bank, Harry Knox to serve on the Advisory Council on Faith-Based and Neighborhood Partnerships, and Nancy Sutley to chair the White House Council on Environmental Quality.

Price also reports that Obama told two leaders of the Human Rights Campaign that he intends to sign the hates crimes legislation when it reaches his desk, and he supports the need for a federal ban on job discrimination based on sexual orientation or gender identity.

The Hate Crime Legislation (H.R. 1913) was introduced by John Conyers and has 42 sponsors. The House Judiciary Committee is set to vote on the bill this Wednesday. Language in the bill includes “sexual orientation," which has some "family groups" going bonkers. The Traditional Values Coalition released this statement:

“The so-called hate crimes bill will be used to lay the legal foundation and framework to investigate, prosecute and persecute pastors, business owners, Bible teachers, Sunday School teachers, youth leaders, Christian counselors, religious broadcasters and anyone else whose actions are based upon and reflect the truths found in the Bible.”

Not surprisingly, their position is inaccurate and irrational. The bill does not restrict free speech. In fact, the ACLU's support for this bill was contingent upon a provision that is the strongest protection for free speech in the entire federal criminal code.

It'll be interesting to see how Republicans vote. Will they pander to extremists or vote to send the message that violent hate crimes have no place in our country?

One Corporations Way of Stimulating the Economy

They're putting more money in their employees paychecks.

Hobby Lobby Stores Inc. announced wage increases effective immediately for all full-time, hourly workers earning up to $13 an hour. For some employees, the pay hike can mean more than a $2 an hour raise.

The company also said it was raising its minimum pay to $10 per hour for full-time, hourly workers, up from whatever the minimum wage is in a state. In Michigan, it is $7.40.

Nationwide, the chain has more than 400 arts and crafts stores, with 15 in Michigan, and the increase will boost the pay of more than 6,900 employees, some by nearly $600 month. In Michigan, 75 percent of their employees are full-timers.

This is a great way to help stimulate the economy and build employee morale at the same time.

It's also nice to hear a CEO say this about his employees:

"Our employees are the backbone of our company, and we believe that giving them the opportunity to share in our success is the right thing to do," David Green, CEO and founder of Hobby Lobby, said in a statement.

"This is part of our continuing efforts to reward our employees for their hard work and integrate them into the growth of our company."

A store spokesperson said they took the action because “they have had a profitable year and want to pass that on to their employees.”

Hobby Lobby has a history of caring about their employees. When the the price of gasoline skyrocketed last year, they gave employees a permanent 25 cent per hour raise to help offset cost of living increases.

Kudos to Hobby Lobby!

Stabenow and Peters Talk Bankruptcy on "The Ed Show"

Sen. Debbie Stabenow was on the Ed Show Monday night and Rep. Gary Peters was on last night. They discussed a possible GM bankruptcy, which could jeopardize the pensions of 670,000 retires, with 335,000 seeing benefit cuts.

Both lawmakers agreed that bankruptcy should be a last resort, but Ed characterized Obama's Auto Task Force as throwing workers under the bus when it comes to their pensions. Stabenow had a different perspective:

SCHULTZ: But what about those retirees—senator, I have to ask you, what about these retirees. They didn‘t vote to have their benefits cut. These are your constituents in Michigan.

STABENOW: No question. If you‘re asking me, do I think bankruptcy is a good idea? The answer is absolutely not. I don‘t support bankruptcy as an option. And the reality is that taxpayers shouldn‘t either, because we‘re talking about 670,000 people with pensions with General Motors alone that would become potentially a federal responsibility. [...]

SCHULTZ: -- that if it goes to the Pension Guarantee Corporation, and people have to take a cut, I don‘t know how they are going to be motivated to come back and vote for the Democrats.

STABENOW: Well, first of all, people took a pay cut to get that pension, and they should not be cut in their pensions, period. People took pay cut after pay cut to keep their health care and to keep their pensions. And so there is a way to do this, even going into a bankruptcy.

Northwest Airlines, based out of Detroit substantially, went into bankruptcy, kept their pension obligations. We worked with them to help protect their pensions. They came out of bankruptcy. They kept their pension commitments. So it is possible to do that. And I am strongly urging the administration, whatever happens, to keep those pensions intact, because people have worked hard all of their lives for those.

Bloomberg reports that GM’s plan is in relatively better shape than others, because it’s about 87 percent-funded, but they also point out that as many as half of GM’s 670,000 pension-plan participants could see their benefits trimmed if the PBGC takes over the plan. Jack Dickinson, president of an advocacy group called Over the Hill Car People says, “Nobody really knows” what would happen with GM pensions in a bankruptcy." (The DetNews has more on how bankruptcy could affect workers' pensions.)

One thing struck me in the interview above. Schultz wondered why people would be motivated to vote for Democrats if General Motors files bankruptcy. Is Ed serious? As the Free Press recently pointed out...

Moreover, the government's track record setting policy that affects the auto industry is atrocious. Car companies have been flogged for not producing enough small, efficient vehicles, but the government eschews a national gas tax that would keep demand for such vehicles high. The companies have been derided for exorbitant labor costs, but in too many instances, government trade policy doesn't help them by holding other countries to decent labor standards.

Democrats and Republicans are responsible for that track record, but Republicans have been in control of the White House for the past 8 years and in control of Congress for almost 20 years. They were the ones actively pushing their free trade, anti-tax, kill the unions, drill, baby, drill rhetoric all that time. And when the chips were down last fall and the auto industry needed help, it was Republicans who pulled the plug on the industry and voted no.

If McCain had won the election, I have no doubt GM and Chrysler would be history already and the Republicans and their US Chamber of Commerce cronies would be giving one another high-fives.

And I won't soon forget how Republicans voted on minimum wage, SCHIP, equal pay, etc. They don't even feel we should have universal health care.

A vote for any member of the GOP is a vote against the middle-class, and General Motors filing for bankruptcy won't change how I feel about them. The lawmaker who does the most for the middle-class gets my vote, and the majority of the time that's a Democrat.

Job Creation: Green Investment vs. Defense Spending

Republicans believe government spending does nothing to create jobs, unless we're spending money on defense. Actually, we're better off spending money on green investments according to Robert Pollin, professor of economics.

In fact, the green-investment agenda is a highly effective engine of job creation, much more so, for example, than two favored Republican forms of spending, military outlay and the oil industry.

Thus, for a given billion dollars of spending, the Obama green-investment program will generate about 17,000 jobs. Spending the same amount on the military will produce only 8,500 jobs, 50 percent less than green investments. Spending an additional $1 billion on the oil industry -- the "drill, baby, drill" agenda advanced by the McCain/Palin campaign -- will produce only 4,500, about one-fourth the total created by green investments.

Pollin says three factors are at play to explain why investment spending devoted to the green economy creates more jobs than military or oil spending.

Relative labor intensity. This means more spending on people and less on machines, buildings, supplies, and energy. In weatherizing a home, the machinery and supplies needed are relatively low, while the demand for construction workers is high. Drilling for oil requires huge amounts of sophisticated machinery and relatively few people to operate that equipment. A military base employs lots of people. But it also involves heavy equipment purchases and consumes lots of energy.

Domestic production versus imports and spending abroad. With Obama's green-investment agenda, well over 90 percent of total spending will occur within the U.S. economy. Energy-efficiency measures, such as building retrofits, public transportation, and upgrading the electrical grid, can only occur on-site. Weatherization projects for buildings in North Dakota can only be done in North Dakota. The New York City subway system must be upgraded in New York. By contrast, the U.S. now imports about 50 percent of all the oil it consumes, and about 20 percent of total spending within the oil industry occurs abroad. The proportion of the military budget spent abroad is even higher.

Differences in pay levels. The average annual pay for employees associated with the green investment, including both wages and benefits, is about $52,000. This is roughly 20 percent below the $65,000 average for both the military and oil industries. This means that a given amount of spending for workers in the green-investment areas yields more job creation at lower average wages -- stretching out a given sum of wage and benefit payments.

That last point about lower average wages isn't actually a bad thing according to Pollin, because many more jobs overall are being created and more money is going into more workers' pockets.

All told, the green-investment agenda still creates far more jobs paying over $16 an hour than either the military or the oil industry does -- 75 percent more than the military and three times more than the oil industry.

And in the green economy, even many of the relatively low-paying jobs in construction and manufacturing offer decent job ladders for entry-level workers. There are fewer such prospects for advancement in even lower low-paying service-sector jobs, such as those of janitors, waiters, and health-care assistants.

President Obama's economic stimulus program includes between $50 billion and $140 billion in clean-energy spending. That's a drop in the bucket compared to the $1339 billion the world spent on the military in 2007, of which we're responsible for 45 per cent of that total, distantly followed by the UK, China, France, and Japan each with 4 to 5 per cent of the world share. Instead of increasing defense spending by 8 percent next year, the President should take the $40 billion or so difference and put it toward green investment. It'll create new industries and put more people to work, and we'll still be a superpower.

Gone are the dark clouds that had me blind

My apologies to Bob Marley for stealing a line from his song for my title, but it so perfectly fits how I feel. Keith Olbermann, Rachel Maddow and now Ed Schultz. They're like sunshine breaking through the fog. We've been fed misinformation from an industry dominated by conservative voices for far too long, and I feel like the dark clouds are finally starting to lift.

In case you're not familiar with him, Schultz has one of the top-rated progressive shows on radio, “The Ed Schultz Show,” which airs live weekdays from noon to 3 p.m. with a weekly audience of more than 3 million listeners on 100 stations across the country. He's an avid voice for the middle class and Ed is now on MSNBC. “The Ed Show” airs Monday through Friday from 6-7 p.m.

Yesterday, Schultz featured SEIU's Stephen Lerner to talk about the importance of employee free choice and Ed didn't hold back. He said he has an issue with centrist Democrats who aren't going to bat for the middle class. Me too.

Here's video from last night's show to give you a sense of Ed's tenacious style.

Save American Jobs: Boycott Chase Bank

This is cross-posted from Emptywheel. Marcy Wheeler is asking everyone to help save American jobs by boycotting Chase Bank.

JP Morgan Chase wants to push Chrysler into bankruptcy so it can jump the line ahead of retirees and US taxpayers to get paid back.

If JP Morgan Chase does that, 300,000 people will lose their jobs.

That's sorry thanks we get from a company that has gotten $25 billion in TARP funds from American taxpayers--plus billions more in other benefits from the Wall Street bailout.

My husband and I decided the only way to pressure JP Morgan Chase to negotiate in good faith with Chrysler was to close our Chase accounts. We want our money to go to a bank that is investing in rebuilding Michigan--not bankrupting it.

Now, FDL and Progress Michigan are calling on others to join our Chase boycott.

Sign the petition

Join the FaceBook group

Find your Michigan Chase branch and close your account

Explain why you're closing your account

Michigan resident and progressive radio host Nancy Skinner is joining the boycott and closing her accounts. She'll have Jane Hamsher on her show today, at 3PM ET, to talk about this action. You can listen in here.

One other thing: PASS THIS ALONG and ask your friends and family to take action.

(If you're reading this and don't live in Michigan, it doesn't matter. These job losses won't be confined to Michigan alone, so find your branch, close your account and/or sign the petition.)

Unions Can't be Blamed for Job Losses

How do the right-to-work cheerleaders explain this? Using the February numbers, five of the 10 states with the biggest growth in unemployment are in the South.

State and percent increase in jobless rate since recession began (with current unemployment rate in parentheses)

1. North Carolina: +6 (10.7% -- 4th highest in country)
2. Oregon: +5.4 (10.8%)
3. Rhode Island: +5.3 (10.5%)
4. Nevada: +4.9 (10.1%)
4. Indiana: +4.9 (9.4%)
4. Florida: +4.9 (9.4%)
7. South Carolina: +4.8 (11% -- 2nd highest in country)
7. Georgia: +4.8 (9.3%)
9. Alabama: +4.7 (8.4%)
10. Michigan: +4.6 (12%)

Source: Bureau of Labor Statistics, via Wall Street Journal

The Institute for Southern Studies says unions can't be blamed for these losses.

One interesting point about those high unemployment numbers in the South: They certainly appear to disprove the argument, put forward by opponents of the Employee Free Choice Act, that unions cause higher unemployment.

The Carolinas -- which have among the lowest union density rates in the country -- have also seen some of the largest growth in joblessness.

This suggests that, as many other studies have found, unemployment rises and falls due to a vast array of changes in the economy -- and can't be pinned on unions.

So much for the idea that right-to-work (for less) laws give states a competitive edge.

Finally, Something That George Bush Did Right

By running our economy into the ground, he inadvertently reduced traffic fatalities.

Less money in the pockets of Americans means fewer highway deaths. As the economy slid deeper into recession and gas prices reached $4 a gallon last year, the number of people killed in auto accidents hit its lowest level in five decades.

Preliminary government figures show that 37,313 people died in motor vehicle traffic crashes last year, which is 9.1 percent lower than the year before, and the fewest since 1961, when there were 36,285 deaths. Final numbers are expected later this year.

Experts also "cited record-high seat-belt use, tighter enforcement of drunken driving laws and the work of advocacy groups that encourage safer driving habits." That's amazing considering that Bush repeatedly cut funding for law enforcement, so maybe I should reconsider giving him any credit.

Nationally, seat belt use climbed to a record 83 percent last year. Michigan had the highest compliance rate in the country with 97.2 percent and Massachusetts had the lowest rate at 66.8 percent.

Enforcing tougher seat belt laws through programs like "Click It or Ticket" isn't popular with everyone though. Some wingnuts believe that requiring one to wear a seat belt against their will is a violation of their civil rights.

In a free society, each person owns himself. As such he has the broad discretion to make his own choices regardless of what others think of the wisdom of his choices. He has the right to take chances with his own health and safety.

And society ends up paying for that person's expenses when he sustains a closed-head injury and spends the next 20 years in a nursing home. The next thing you know, people will be advocating that we eliminate traffic signals and stop signs too. Sigh...

Made in Michigan

My daughter and son-in-law wanted to do something to help stimulate our economy and this is what they came up with:


Meet their little stimulus package - Alexis Michelle (a.k.a. Lexie). She was born in a Michigan hospital on April 2, 2009 and weighs 6 pounds, 14 ounces and is 20 inches long. That picture was taken just seconds after she entered the world.

Her impact on the economy was immediate. Grandpa dashed to a local florist to buy flowers for Lexie's mom and Grandma made plans to hit the mall over the weekend.

Lexie is expected to have the biggest impact on local Michigan products. We all know kids have voracious appetites, and Lexie is expected to consume copious amounts of Kellogg's cereal, Cole's garlic bread, Faygo pop, Jiffy Mix muffins and pancakes, Koegel's hotdogs, Little Caesar's pizza and Better Made potato chips over the course of her lifetime.

And looking really far into the future, Lexie will definitely drive a G.M., Ford or Chrysler vehicle!

(Mother and child are doing well and are expected to come home today. Grandma is still on cloud nine, but expect her to share some more pictures soon!)

More on that "surgical" bankruptcy

An auto bankruptcy could cost one-third of the three million people employed in the industry and shave four percentage points from our GDP according to a Deutsche Bank analyst. I guess that's why Obama called it a "surgical bankruptcy" in his address on Monday. Losing that many people would be like losing a limb in order to save your life. That's the bad news.

There is some good news though, at least for GM. An article in the NY Times reports the "government may seek to ease General Motors into what it calls a “controlled” bankruptcy, somewhere between a prepackaged bankruptcy and court chaos, by persuading at least some creditors to agree to a plan that would cleave the company into two pieces."

This is how it would work:

Under a plan being worked out by the administration, G.M. would file for prearranged bankruptcy, according to these people. It would then use a sale authorized under Section 363 of the bankruptcy code to quickly sell off the desirable assets to a new company financed by the government. These good pieces might include Cadillac and Chevrolet, as well as assets the company needs to run the business.

Less desirable assets, brands like Hummer and underperforming factories, would be left in the old company. Proceeds from the sales, including stock in the new company, would be given to the old G.M., helping to settle claims.

I mentioned Section 363 bankruptcy the other day. The goal the administration seeks is to create a new, healthier, competitive G.M. by leaving behind its liabilities and less valuable assets, which is also similar to the way the government handled Lehman Brothers last year.

The administration would also have to win support from some of G.M.’s creditors, "notably the United Automobile Workers, which would be forced to pare its health care benefits and whose pension obligations would probably remain in the old company." That's bad news, but...

There will be pressure to keep plants open, to keep employment in communities high, he said, “because typically G.M. or Ford or Chrysler are very substantial contributors to the local tax receipt flow.”

They're telling us something we already know all too well. Experts are also saying history offers almost no precedent for a G.M. bankruptcy simply because no other company ever matched their size and interconnectedness.

The news for Chrysler isn't as good. Obama is prepared to let Chrysler go bankrupt and be sold off piecemeal if they can’t form an alliance with Fiat.

Bankruptcy is only at a possibility at this point, but it's looking likelier by the day - or at least within 30-60 days, and there's no doubt Michigan will suffer more pain if it happens. All we can do is trust Obama. He said he would direct a comprehensive effort to lift the hardest hit areas "by using the unprecedented levels of funding available in our Recovery Act and throughout our government to create new manufacturing jobs and new businesses where they are needed most – in your communities." He also said he would fight for us and help put us back on our feet. Things look bleak now, but not hopeless. With Obama helping us, we can come through this and be made whole again.