A Good Day for Consumers and the Environment

Elections do have consequences. Today came an announcement from President Obama that serious mileage improvements and pollution requirements for cars and trucks sold in the U.S. will take effect in 2016. In another development, the Senate voted 90-5 to rein in some of the worst abuses of the credit card industry. The changes illustrate both the positive effects of the election of a new administration and congress, but also the limitations inherent in the system of how things work in Washington.

The auto changes come from an agreement apparently hammered out between the White House, congress, U.S. automakers, the UAW and the state of California. Members of all these groups stood behind the President as he made the announcement on the White House lawn. By 2016 fleets will have to average 35.5 miles per gallon and emissions will have to be cut by about 30%, including carbon dioxide. These are consequential requirements that will help on global warming and put a dent in our reliance on foreign oil.

On virtual life support from the federal government and badly wounded by the recession, Detroit dropped its opposition and finally went along. They had been fighting California's attempt to enact strict standards in court since 2002 but finally gave up. Better to strike a deal with the Democrats in power than stick with the Republicans in opposition, they must have figured. The way Washington works, they will now have influence on regulation over themselves, an important byproduct for them for the future.

The credit card companies will be restricted on some of their higher rates, will have to spell out their policies clearly in plain English and will have to give 45-days notice for most rate increases, among other things. The Senate bill is similar to a House bill passed earlier by a vote of 357-70. One downside of the bill is an amendment by Republican Sen. Tom Coburn that would "bar the Interior Department from prohibiting individuals from legally carrying firearms inside national parks and wildlife refuges." Great. Just what we need, more lunatics with guns in public places. Why not sticks of dynamite too, while we're at it?

The other problematic feature is the rules won't go into effect for nine months. We can expect the credit card lenders, who assailed the bill for as they termed it, restricting their ability to extend badly-needed credit, to use that time to gouge people as much as they can and put new rules in place to rip people off in whatever ways their lawyers find the new regulations haven't closed to them. These are the kinds of struggles that never end.

So in these two announcements today we see both the efficacy of change through the election process but also the persistence of some of the same old habits and processes that always mitigate the full scope of what can be accomplished. Still, by D.C standards it was a very good day at the office for Barack Obama, Democrats, consumers and the environment.

Reasons Behind Auto Rejection

There are three main reasons Congressional Republicans scuttled the move to provide a bridge loan to keep the Big Three automakers out of bankruptcy. They were to strike a blow against organized labor, curry favor and increased support from business and to serve the foreign automakers in their own states. It was a cold matter of political calculation. See the facts here.

An e-mail "Action Alert" December 10 to GOP Senators told them, "Republicans should stand firm and take their first shot against organized labor." They lost in the Senate by 17 votes, 52-35, but did prevent the Democrats from getting the 60 votes needed to break their filibuster, which was all they needed to do. Humiliating organized labor was their top priority. By breaking the union they can undercut a major source of funding for their Democratic opponents. The UAW has given $12.5 million to Democrats since 2000. That millions of Americans will lose their jobs or that the economy as a whole will suffer about $240 billion in losses if the companies go down is of little concern to them.

By beating down the union the GOP will stand to become even more popular in business circles and garner increased support from them. It is true that the Big Three have been supporting Republicans 3-1 over Democrats, so they are alienating the car companies. But they stand to more than make up for that with the rest of business and industry. They went along with the twenty times larger bailout of the (non-union) financial industry, so it's not that they are against helping corporations per se. They had no problem with no-bid contracts in Iraq or paying for mercenary forces there. And it's not that they have a problem with micromanaging private institutions. No, their requirements for agreeing to the help were to dictate reductions in workers' pay. Not management pay, of course, mind you. No, the signals are clear. Goodies for corporations, sure. But not if any of the help winds up in the hands of hourly workers. That is against their principles.

Finally, there is a decidedly home field interest element working here. The most vociferous opponents were from states where foreign, non-union automakers have set up shop. Sen. Bob Corker of Tennessee has Nissan plants and its U.S. headquarters in his state. Sen. Richard Shelby of Alabama has Mercedes, Hyundai and Honda plants in his. These men have a vested interest in favoring foreign corporations over American ones, and are wasting no time in doing so.

Their machinations are harmful to the well-being of the country and should be seen as such. Hopefully the Bush Administration will free up the $14 billion it has at its disposal to tide GM and Chrysler over until Obama takes office and a much larger contingent of Democrats takes office. Until then we are seeing once again the short-sighted, tit for tat, me first politics as usual that Obama was elected to end. The old guard has 34 days left and seems intent on trying to make the most of them. Their departure will come none too soon.