DiscussionDIVAS

Names in the news

It was a week of appointments to Obama’s cabinet and testimonies before Congress, with many names in the news. Here’s a cheat sheet on some who made headlines, and why.

Sheila Bair
Sheila’s chairwoman of the Federal Deposit Insurance Corporation (FDIC), the group that insures your bank deposits if the bank goes caput (up to $250,000). She’s in the news a lot these days because of her plans to stem home foreclosures and testified before Congress on Tuesday. About one million homes have gone into foreclosure over the last year and Bair says some 5 million more could occur in the next two years without a prevention program. She wants to use $24 billion of the $700 billion bailout monies to modify people’s loans in a way that helps them stay in their homes.

Rick Wagoner
Wagoner is CEO of General Motors, the car maker with the most to lose it seems if the government doesn’t come to the rescue of Detroit’s Big Three (read last week’s DIVA). He was on Capitol Hill asking for money this week, along with Ford CEO Alan Mulally, Chrysler CEO Bob Nardelli and the union UAW President Ron Gettelfinger. Congress told them no dice unless they come up with a restructuring plan, meaning we’ll hear a lot more from these men in the coming weeks, and the group took heat for flying to Washington in their individual, private jets.

Henry Waxman
Speaking of Congress, a couple folks had big wins on the Hill this week. One was Rep. Henry Waxman (D-CA.), who took the reins of the influential House Energy and Commerce Committee, ousting its longtime chairman John Dingell (D-MI.). Waxman and Dingell were known to spar over fuel efficiency standards for cars, and they’ll both be key figures in the Big Three solution.

Sen. Joe Lieberman (I-Conn.) also came out a winner. Democrats voted not to strip the Democrat turned Independent turned quasi Republican (he supported McCain) of his committee chair spots.

Tom Daschle
Obama’s been swiftly naming people to his team, among them Tom Daschle for Secretary of Health and Human Services. Daschle was a U.S. Senator from South Dakota for almost 20 years. He lost his re-election in 2004 and has been consulting for the health care industry in Washington, which is causing some controversy over the appointment.

The big picture
Of all the names in the news, the ones Obama is naming to his team are receiving much vetting in the press. He’s named or said to be naming: Janet Napolitano—the Governor of Arizona—to homeland security, Illinois Rep. Rahm Emanuel as Chief of Staff, an attorney general and slew of advisers. He’s probably close to naming a Treasury Secretary, a crucial nomination given the economy, and is said to be close to naming Hillary Clinton as Secretary of State. For all the Hillary supporters on this list, we’re curious what you think.

Auto giants' mess explained

Oh, to have been a fly on the wall as the Bushes welcomed the Obamas at the White House on Monday.

Reports say the ladies talked about raising daughters there (fortunately the Obama girls are too young to drink), while the men got down to business. On Obama's agenda: Detroit.

Reportedly Obama "urged" President Bush to rescue U.S. car makers from their death spiral—General Motors may run out of cash to pay its bills by January. Now Congress is considering sending billions in aid to keep them afloat. Detroit wants $25 billion now, and maybe $25 billion later.

So, how did we get here? A WeeklyDIVA primer:

 

• For much of the 20th century, U.S. car makers dominated U.S. cars sales and were an integral part of the economy as a manufacturer and an employer. The Big Three were all founded in the early 1900s—Ford in 1903, General Motor in 1908 (it just turned 100), Chrysler in 1925.
  
• In the mid-1970s Japan began importing smaller, more fuel-efficient cars to the U.S., stealing market share along with other importers. Detroit began bleeding jobs in the 1980s.
  
• In the mid-1990s Detroit found its golden ticket: the Sports Utility Vehicle. For years SUVs were the bread and butter of U.S. car makers. And while SUV sales began slumping several years ago, Detroit kept cranking them out.
  
• Meanwhile union contracts that afforded good wages and employee pensions became expensive burdens, as did lifetime health-care benefits for retirees. GM spent $5 billion on health care for one million retirees and their families in 2007, which added $1,500 to the cost of every GM car.
  
• When gasoline prices reached record highs this year, SUV sales fell off a cliff. Hybrid sales, largely from Toyota, soared.
  
• Finally, the economy may have delivered the last blow. October car sales were the worst in 25 years as consumers cut back sharply. GM alone has lost over $20 billion this year.

The big picture

So, here we are. First the banks were said to be "too big to fail" because they were too interconnected into our daily lives to be allowed to collapse. So the government rescued them (except for Lehman Bros.). And while Congress seems hesitant to send Detroit a lifeline anyway, some say let them go bankrupt and deal with the consequences of their own mismanagement and failure to catch the hybrid wave faster. 

 

Still others say bankruptcy would unleash all kinds of problems. And the Big Three say they are too big to fail—that they employ 250,000 people directly and millions through parts suppliers and other support industries.

 

It's a mess.

The handsome one

“If there is anyone out there who still doubts that America is a place where all things are possible; who still wonders if the dream of our founders is alive in our time; who still questions the power of our democracy, tonight is your answer.”

                               – Barack Obama, Nov. 4, 2008

 

One hundred years after race riots in Illinois prompted the founding of the National Association for the Advancement of Colored People (NAACP), Barack Hussein Obama, the first black president-elect of the United States, held his election-night victory in the same state. We're still taking in the moment. (Hussein, by the way, means “the handsome one” in Arabic.)

 

While the headlines are already looking forward to all the work yet to be done, we want to reflect on the election that was with some interesting takeaways.

 

Key presidential points:

• Voter turnout was the largest since 1964, when Lyndon Johnson beat Barry Goldwater. About 60% of registered voters, around 130 million people, went to the polls this year. 
• Obama won 28 of the 50 states, 52% of the popular vote, and 364 electoral college votes (McCain took 162).
• Obama won 95% of the black vote and 43% of the white vote (see the exit polls).  

Other points of interest from Tuesday:

• Democrats gained six seats in the Senate. Tally is now 57 Democrats to 40 Republicans (3 races are still being counted).
• Democrats gained 19 seats in the House, bringing the count to 254 vs 173 (8 races are still being counted).
• Abortion rights won out across the country: South Dakotans defeated a ban on all abortions for the second time in two years; Californians voted that parents of minors did not have to be notified before getting an abortion; Coloradans voted against the definition of "person" at the point of conception.
• Gay rights were dealt a blow. Bans on same-sex marriage were passed in Florida, Arizona, and even in California.
• Marijuana made some strides: Massachusetts decriminalized being caught with under an ounce of pot; Michigan legalized it for medicinal purposes. 
• Michelle’s dress on election night was by designer Narcisco Rodriguez (Oh, we digress! What did you think?).

The big picture

There’s no time for rest. A momentous election is barely over and already world leaders are calling for Obama's attention on various issues. He’s pulling his White House team together and is likely to be involved in helping steer any kind of stimulus package that the “lame-duck” Congress may try to pass ahead of his inauguration, which is just 11 weeks away.

 

Now get out there and show'em what you know!