If the Democrats are intent on a bailout, they should at least be realistic. Absent a radical restructuring of GM and Ford (and Chrysler’s demise), there likely will be no long-term recovery of the domestic car industry. Larry Kudlow explains that a large chunk of that involves adjusting the Big Three’s labor agreements and dealing with the companies’ crushing debt:
[Sen. Bob] Corker wants Detroit to have the exact same compensation levels as the Japanese transplants in the non-union Southern states. That means moving hourly labor costs down from roughly $70 to $48. It means reopening the UAW contracts that have created the huge pay-gap between Toyota and GM. It means putting an end to excessive pension and healthcare benefits.
According to Professor Mark Perry of the University of Michigan, GM healthcare benefits add $1,500 to the price of every vehicle, while pension costs add another $700 per car. That will have to end. The lucrative jobs bank that pays laid-off workers 95 percent of their compensation also will have to stop. And bondholders will have to be satisfied with a complete renegotiation of GM’s $62 billion in debt, including the union retiree healthcare fund that is under-funded by $30 billion.
There still will be considerable job losses for downsized Detroit carmakers. They’ll have to cut a huge chunk of their dealer networks. Domestic brands will have to be sharply reduced. But essentially, as would be the case under Chapter 11 bankruptcy, the federal government will provide short-term financing while Detroit goes through its radical restructuring. It looks like bankruptcy lite, and it will completely change the direction of the former Big Three.
The alternative is to throw $10-15 billion at the car companies in the form of temporary assistance, wait for them to make a comeback in the Obama administration, and then to put them on the neverending cycle of bailout-failure-bailout-failure. Democrats who are inclined to help the Big Three have no stomach for demanding the needed reforms that would affect the Big Three’s uncompetitive cost structure. So their “solution” is to begin a dangerous co-dependent relationship between unsuccessful companies and weak-kneed legislators. There will be no end to it, unless and until the public becomes incensed and demands an end to it. But before that happens, how much will be wasted — $10 billion? A $100 billion? More?
It is clear what tactic the Republicans should employ. Absent significant restructuring of the car companies, Republicans would be wise to play no part in this debacle, as Sen. Richard Shelby advises:
Shelby, who also voted against the $700 bailout bill for the financial industry, called it a “”a bridge loan to nowhere,” and said G.M., Ford and Chrysler have to undergo a fundamental restructuring of their operations rather than look for federal help.
Shelby also predicted auto industry executives would soon come back to Washington looking for more money, beyond any assistance they are given now.
“This is a down payment on many billions to come,” Shelby warned. “This is not something that happened overnight. This is 30 years in the making. These companies basically have failed or are failing. They probably need, according to some people, about 60 percent of the management to go, and about 40 percent downsize of the workers.”
Shelby also threatened a filibuster of any auto aid agreement, but was unsure whether he had the votes to sustain it.
We’ll see if the Democrats have the votes, even on their side, to pass this, let alone break a filibuster. Time and transparency are against them, which is why conservatives should demand plenty of both before a vote is taken.
Brother, Can You Spare $10 Billion?
Must-Reads from Magazine
Are the warplane's secrets safe?
The F-35 Joint Strike Fighter is the newest generation air platform for the U.S. Air Force, Navy, and Marines. Lockheed-Martin, which builds the F-35, describes it as “a 5th Generation fighter, combining advanced stealth with fighter speed and agility, fully fused sensor information, network-enabled operations and advanced sustainment.” For both diplomatic reasons and to encourage sales, Lockheed-Martin subcontracted the production of many F-35 components to factories abroad. Many program partners—Australia, Canada, the United Kingdom, Denmark, for example—are consistent U.S. allies.
Turkey, however, is also part of the nine-nation consortium producing the plane, which gives Turkey access to the F-35’s technology. “As a program partner, Turkish industries are eligible to become suppliers to the global F-35 fleet for the life of the program. In total, F-35 industrial opportunities for Turkish companies are expected to reach $12 billion,” the warplane’s website explained. “Turkey plans to purchase 100 of the F-35A Conventional Takeoff and Landing variant. Its unsurpassed technological systems and unique stealth capabilities ensure that the F-35 will be the future of Turkish national security for decades to come.”
But is the F-35 safe with Turkey? In recent years, the Turkish government has leaked highly-classified information to America’s adversaries in fits of diplomatic pique. Back in 2013, for example, Turkey leaked to the Iranians the identities of Israeli spies in Iran. Danny Yatom, former head of the Mossad, told USA Today that the incident would damage U.S. intelligence efforts, “because we will be much more reluctant to work via Turkey because they will fear information is leaking to Iran… We feel information achieved [by Israel] through Turkey went not only to Israel but also to the United States.”
On July 19, the Pentagon criticized Turkey’s state-controlled news agency for exposing ten covert U.S. bases in Syria in a way that can enable both the Islamic State and Iranian-backed forces to target Americans. Bloomberg reported that the leak also detailed aid routes and equipment stored at each base.
Both these incidents raise serious questions about whether Turkey can be trusted with the F-35, especially given Turkey’s growing military and diplomatic ties to Russia, and the wayward NATO state’s recent cooperation with China as well. The United Kingdom’s Ministry of Defense is rightly concerned about the security implications of a plan to service its F-35s in Turkey, but such concern should only be the tip of the iceberg.
Should Turkey even receive F-35s and, to the extent the program relies on Turkish factories, is it time to stand up quickly a Plan B? To do otherwise might squander the billions of dollars already spent on the program, risk increasing President Recep Tayyip Erdoğan’s ability to blackmail the West, and potentially land America’s latest military technology on Kremlin desks.
Too many martyrs make a movement.
If the GOP is to be converted into a vehicle for politicians who evince Donald Trump’s brand of pragmatic center-right populism, Trump will have to demonstrate his brand of politics can deliver victories for people other than himself. Presidential pen strokes help to achieve that, as do judicial appointments. Nothing is so permanent, though, as sweeping legislative change. On that score, the newly Trumpian Republican Party is coming up short. If the passive process of transformational legislative success fails to compel anti-Trump holdouts in the GOP to give up the ghost, there is always arm-twisting. It seems the Republican National Committee is happy to play enforcer.
The RNC’s nascent effort to stifle anti-Trump apostasy by making examples of high-profile heretics has claimed its first victim: New Jersey’s Lieutenant Governor Kim Guadagno. The Republican is running to replace the nation’s least popular governor, Chris Christie, and the effort has been a struggle. Trailing badly in the polls and facing the headwinds associated with trying to succeed an unpopular outgoing GOP governor in a blue state, Guadagno needs all the help she can get. That help won’t be coming from the RNC. According to NJ Advance Media, the committee’s objection to helping Guadagno isn’t the imprudence of throwing good money after bad. It’s that she was mean to President Trump in 2016, and she must be punished.
“[The president] is unhappy with anyone who neglected him in his hour of need,” said a source billed as an RNC insider. The specific complaint arises from an October 8 tweet from the lieutenant governor said that “no apology can excuse” Trump’s “reprehensible” conduct on the infamous “Access Hollywood” tape. “Christie was not as stalwart as some people in the party, but at least he didn’t go against him the way she did,” the insider added.
This source’s version of events was supported by former two-term New Jersey Governor Christine Todd Whitman. “She went down there, and the (Republican National) Committee was reluctant to back the campaign in the way one would have expected,” she said. “The implication was, ‘Well you were not a Trump supporter in the primary, and so don’t expect much money.'”
This is almost certainly a pretext. Republicans are facing stiff competition and an unfavorable political environment in November’s gubernatorial elections in Virginia and New Jersey. In 2017-2018, 27 GOP-held seats are up for grabs, nine of which are in some jeopardy of falling to Democrats. Republicans are going to have to husband their resources and triage their officeholders. That’s a forgivable, if demoralizing, condition. Declaring Guadagno to have offended the leader and to be cut off from the font of Republican goodwill is not only unjustifiable, it’s terribly foolish.
If Republican women are to be punished for saying that Trump’s comments about sexually assaulting unsuspecting females were unacceptable, there are going to be a lot fewer Republican women. Moreover, the RNC has invited the perception that there is a double standard at play here. A slew of Republicans called on Trump to drop out of the race after that tape, but the RNC is unlikely to withhold support for Senators Rob Portman or John Thune when they need it. Among those calling on Trump to drop out was his own chief of staff, Reince Priebus—a fact the president reportedly won’t let Priebus forget.
Cults of personality can be bullied into existence, but they rarely outlast the personality around whom they form unless that personality can claim some lasting achievements. In lieu of any compelling rationale, the effort to remake the GOP in Trump’s image by force will only create dissidents. The ideological conservatives who once dominated the Republican Party are unlikely to make peace with the ascendant populist faction at gunpoint. And the RNC is not solely to blame for this boneheaded move. Even if the notion that Guadagno is being punished for disloyalty is a pretense, it is a response to a clear set of incentives promoted by this White House.
Maybe the most intriguing question of the present political age is whether or not conservatives in the GOP will come to terms with a man they once saw as a usurper. A heavy hand will only catalyze resistance, and Trump needs his own party as much or more than they need him. Guadagno’s gubernatorial bid is on no firmer ground today than it was yesterday, but the Republican candidate’s allies can now legitimately claim persecution at the hands of personality cultists. Too many martyrs make a movement. The White House and the Republican National Committee should tread lightly.
Podcast: Conservatism in shackles while O.J. goes free?
On the second of this week’s podcasts, I ask Abe Greenwald and Noah Rothman whether the health-care debacle this week is simply a reflection of the same pressures on the conservative coalition Donald Trump saw and conquered by running for president last year—and what it will mean for him and them that he has provided no rallying point for Republican politicians. And then we discuss OJ Simpson. Give a listen.
Don’t forget to subscribe to our podcast on iTunes.
Hyperbole yields cynicism, not the other way around.
Newly-elected French President Emmanuel Macron surprised almost everyone when he invited President Donald Trump to celebrate Bastille Day with him in Paris, especially after the two leaders’ awkward first meeting in Brussels in May. After all, between now and then, Trump withdrew the United States from the Paris Climate Change Agreement, and Macron has become perhaps the most vocal critic of Trump among European leaders.
In hindsight, Macron’s reason for embracing Trump might have been to get the president to reverse course on the Paris agreement. From the Associated Press:
French President Emmanuel Macron says his glamorous Paris charm offensive on Donald Trump was carefully calculated — and may have changed the U.S. president’s mind about climate change…. On their main point of contention — Trump’s withdrawal from the landmark Paris climate agreement — Macron is quoted as saying that “Donald Trump listened to me. He understood the reason for my position, notably the link between climate change and terrorism.”
According to Macron, climate change causes droughts and migration, which exacerbates crises as populations fight over shrinking resources. If Macron really believes that, France and Europe are in for some tough times.
First, droughts are a frequent, cyclical occurrence in the Middle East, the Sahel, and the Horn of Africa. The difference between drought and famine is the former is a natural occurrence and the latter is man-made, usually caused by poor governance. Nowhere is this seen more clearly than in the Horn of Africa, where the same drought might kill a few dozens of Ethiopians but wipe out tens of thousands of Somalis.
Second, the common factor in the wars raging in the Middle East today is neither climate change nor extreme weather, but brutal dictatorship, radical ideologies, and the militias supported by the Islamic Republic of Iran. Yemen could be a breadbasket. Its terraced fields rising up thousands of feet in the mountains grow almost every fruit imaginable. Yemen also catches the tail end of the monsoon. If Yemenis planted exportable crops like coffee rather than the mild drug qat, which does not bring in hard currency, they might be fairly prosperous.
It is not climate change that denied the Syrian public basic freedoms and liberty for decades, nor was it climate change that dropped barrel bombs on civilian neighborhoods, tortured and killed 13-year-old Hamza Ali al-Khateeb, or used chemical weapons. For that matter, when it comes to radicalization, the problem is Syria was less climate and more decades of Saudi-and Qatari-funded indoctrination and Turkish assistance to foreign fighters.
Regardless of all this, another obvious factor nullifies Macron’s thesis: When drought occurs in regions outside the Middle East, the result is seldom suicide bombing.
Terrorism does not have a one-size-fits-all explanation but, generally speaking, when it comes to Islamist terrorism, ideology plays a key role. Most terrorists are educated, middle class, and relatively privileged. Islamic State caliph Abu Bakr al-Baghdadi, for example, has a Ph.D. Many of the 9/11 hijackers were educated. In the Gaza Strip, Hamas recruits inside schools. Simply put, there is no linkage between climate change and terrorism.
Not only would Trump be foolish to buy Macron’s argument, but environmentalists who believe climate change puts the Earth in immediate peril should be outraged. It is hyperbole. Moreover, it is the casual invocation of climate change as a catch-all cause for every other issue that breeds the cynicism that leads so many to become so dismissive of everything climate activists say. Macron may look down up Trump as an ignorant bore, but Macron’s own logic suggests he is also living in a world where facts and reality don’t matter.
Quid pro quo?
Until now, the notion that Donald Trump was providing Russia and Vladimir Putin with concessions at the expense of U.S. interests was poorly supported. That all changed on Wednesday afternoon when the Washington Post revealed that Donald Trump ordered his national security advisor and CIA director to scrap a program that provided covert aid to anti-Assad rebels in Syria.
The president made that decision on July 7, within 24 hours of his first face-to-face meeting with Russian President Vladimir Putin. The sources who spoke to the Washington Post accurately characterize it as a reflection of “Trump’s interest in finding ways to work with Russia.” That is a fool’s errand but, more important, this move demonstrates that the United States is willing to cede ground to adversaries and bad actors as long as they are persistent enough.
I endeavored to demonstrate as thoroughly as I could why American interests in Syria and those of Russia not only do not align but often conflict violently. The president appears convinced, like his predecessor, that his personal political interests are better served by allowing Moscow to be the power broker in Syria—even if that makes America and its allies less safe.
Moscow has made it a priority to execute airstrikes on American and British covert facilities in Syria, and Donald Trump has just rewarded those air strikes on U.S. targets. Trump has sacrificed the goodwill he garnered from Sunni-dominated Middle Eastern governments when he executed strikes on Assad’s assets and, as recently as June, the U.S. downed a Syrian warplane for attacking anti-ISIS rebels laying siege to the Islamic State capital of Raqqa.
America will continue to provide support to indigenous anti-ISIS rebels, despite the fact that those forces are often under assault from both Russian and Syrian forces. It should be noted, however, that the CIA suspended aid to Free Syrian Army elements when it came under attack from Islamist in February. The agency said it didn’t want cash and weapons falling into Islamist hands, but this move exposes that claim as a mere pretext.
This concession to Russia is significant not just because it removes some pressure on Moscow’s vassal in Damascus. It sends a series of signals to the world’s bad actors, who will inevitably react.
The phasing out of aid for anti-Assad rebels (presumably the indigenous Sunni-dominated factions) gives Russia and Syria the only thing they’ve ever wanted: the ability to frame the conflict in Syria as one between the regime and a handful of radicals and pariahs. A cessation of aid will squeeze the remaining moderate, secular rebel factions in Syria and compel them to seek whatever assistance they can—even at the risk of augmenting the ranks of Islamist insurgents. How that advances America’s interests is entirely unclear.
This move will only further embolden not just Russia and Syria but their mutual ally, the Islamic Republic of Iran. It will convince the region’s Sunni actors that the United States is not on their side—a matter of increasing urgency in Iraq. The insurgency in Syria is unlikely to end so long as regional fighters have a means of getting into the country. America will simply sacrifice its leverage over those groups.
This move will confirm, finally, that the use of weapons of mass destruction in the battlefield is survivable. A truly resolute American administration might fire off a handful of Tomahawk missiles at an abandoned airfield, but regime change is not in the offing. That will only beget other bad actors who will test the parameters of America’s willingness to defend the international norms prohibiting the use of WMDs. Because American servicemen and women are stationed around the world in unstable theaters, the likelihood that they will one day be fighting on chemical battlefields just became a lot more likely.
American covert involvement in Syria also filled a vacuum that the Obama administration allowed to expand in 2011 and 2012. “One big potential risk of shutting down the CIA program is that the United States may lose its ability to block other countries, such as Turkey and Persian Gulf allies, from funneling more sophisticated weapons—including man-portable air-defense systems, or MANPADS—to anti-Assad rebels, including more radical groups,” the Washington Post speculated. Ironically, American withdrawal from the anti-Assad effort could actually fuel the fire, but in a way that we can neither control nor effectively influence. We’ve seen that movie before. We know how it ends.
And all of this is for what? To garner goodwill with the bloody regime in Damascus? To court Moscow or Tehran? There is nothing to gain from cozying up to these regimes that is not offset by the sacrifice of American national interests and moral authority associated with rapprochement. For all of the Trump administration’s criticisms of Barack Obama’s policy with regard to those regimes, this decision suggests he’s willing to double down on Obama’s mistakes.