Half Time in America?

Last night's Super Bowl XLVI was bad enough with the New York Giants and New England Patriots playing.  Twenty-four hours later, I still can't decide who I wanted to win.  For me, it took some very funny dog ads from Doritos and Bud Light to make it watchable.

There was one ad, however, that didn't leave me laughing and that was Halftime in America, narrated by Clint Eastwood, who did his best to put a positive spin on the recovery of Detroit and America's car industry.  Update:  Some conservatives are saying that it puts a positive spin on Obama's bailout since it was written by two of his campaign supporters.

Kick some butt, Clint

"It's halftime.  Both teams are in their locker rooms discussing what they can do to win this game in the second half," Eastwood says in the spot.  "It's halftime in America too.  People are out of work and they're hurting.  And they're wondering what they're going to do to make a comeback.  And we're all scared, because this isn't a game.  The people of Detroit know a little something about this.  They almost lost everything.  But we pulled together, now Motor City is fighting again."

"Detroit's showing us it can be done.  And what's true about them is true about all of us," Eastwood continues.  "This country can't be knocked out with one punch.  We get right back up again and when we do the world is going to hear the roar of our engines.  Yeah, it's halftime in America.  And, our second half is about to begin."

If you were on your sixth Budweiser (or Stroh's since we're discussing Detroit here), you might actually think:  "Hell, yeah!  That's the American spirit that built this country.  Punch us hard, and we may go down.  But we'll get back up -- spitting teeth and blood -- and hit you back twice as hard."  That's the American Spirit that built the Empire State Building, Hoover Dam and the Golden Gate Bridge.   And I think it's great that they got Eastwood to narrate the whole thing, because I can't think of a tougher son of a bitch than Dirty Harry to carry that message.

Unfortunately, that's not the message than can be told from the bailout of General Motors Corporation, Chrysler Group LLC and their finance units, much less the rejuvenation of Detroit as a city coming back against tough odds.  Government intervention isn't what made America great.  Individual freedom, through innovation has made us the greatest nation on earth.  A two minute ad -- carrying a message of government bailouts, and tough looking union employees -- isn't good enough to get us out of this jam.

Let's look at the bailout of GM and Chrysler:  President Bush and Obama both presided over a loan of more than $85 billion in the hopes of preventing two of the big three auto companies from going bankrupt (Ford declined their offer).  In addition, fear of massive job losses, reduced tax revenue, and irreparable damage to the future credibility of the auto industry were given as reasons for the bailout.  Neither President nor members of Congress had the fortitude to let the auto industry stand on its own, despite howls of protest from the majority of American taxpayers.

True to predictions, GM and Chrysler both filed for Chapter 11 bankruptcy a few months after receiving the bailout money.  In addition, years later after coming out of bankruptcy:

. GM is still Government Motors.
. The U.S. Government converted $45.3 billion in loans to a 70% ownership position.
. This ownership remains a drag on GM's profit potential, as is evident by the Obama
  administration's ideological commitment to "green" development (think the Volt).
. GM's stock price of $26.70 per share is still less than half of the $53 price that the U.S. Treasury
  Department needs to break even.  Selling at anything less than that would mean additional
  taxpayer losses.
. The Canadian Government converted an $8.1 billion stake into 12% ownership.
. GM has $27 billion in future, unfunded pension liabilities, which could become taxpayer liabilities if
  the auto company cannot make payments.
. From its founding in 1923 until the government took over in 2009, GM had a total of ten CEO's --
  none of the three CEO's since have lasted even a year.

As a whole, the auto industry employed 955,000 in 2008.  Today there are 746,000.

I don't know what would have happened to the auto industry without the bailout, but it's safe to say that GM and Chrysler would have still filed for bankruptcy, but come out much leaner (yes, fewer jobs and less union influence) with more flexibility to meeting consumer demand.  That, to me, would represent taking a punch and coming back with a left, countered by a right hook to the jaw.

It seems to me that since the bailout, the auto industry (through regulations placed on it by its majority owner, Obama) has been trying to sell us on its vision of profitability.  But seriously, what does the government really know about profit?  Has it ever been profitable?

Can Detroit be saved?

As for the city of Detroit, it's ludicrous to think that the city is on it's way back.  Putting "Imported from Detroit" on auto ads doesn't fool anyone -- the city is hurting.

The ad with Clint Eastwood apparently shot many of the locations used in New Orleans and Los Angeles.  I realize it was about America at Halftime, but don't you think they could have used some actual Detroit imagery for an ad centered primarily on Detroit's urban renewal?  Or is it because there aren't any?

In 2011, Detroit was named by Forbes Magazine as one of the most violent cities in America, with 345 murders reported in the Detroit metropolitan area.  That's nearly 1 murder every day.  The economic picture in Detroit was supposed to get better once the auto company bailout was complete.  I'm sorry, President Obama, but it hasn't happened.  Unemployment has remained high -- estimated at almost 50%.  City officials  claim, the once glamorous city now has more people living in poverty than cars in the street.  And the U. S. census bureau shows that a quarter of a million people have left Detroit in the past ten years.  If the Super Bowl ad had actually been honest, it would have shown around 60,000 vacant buildings and 35,000 abandoned homes lining the streets of the city.

The editor of Detroit's Michigan Citizen, Zenobia Jeffries, explains, "We are seeing home foreclosures and a continued flight to the suburbs which takes the tax base away from the city and there's more and more of that.  The decline in the school system is making people leave the city.  And so there's no money here and no jobs here."

Downriver Scrap Iron & Metal Company, located five miles outside Detroit, is one of a few businesses booming with new faces.  Scrapping --gutting homes and buildings for their cooper and steel pipes -- has increased dramatically as the city loots itself.   Landmark buildings and foreclosed homes are being gutted for survival, says Downriver's owner Albert Wojtala. "With the little money they get, they're trying to survive, pay their bills.  They just can't make it -- everything has gone to hell."

If Detroit is a beacon of hope and a shining example of what makes America great, we are in deeper trouble than any of us know.

So, it's halftime in America.  General Motors and Chrysler (and by proxy Detroit) will never be thought of as winning this game until it is off the government teat and standing on its own, able to sustain profitable growth with products consumers want and like.  Cutting ties with Obama and Washington D.C. is a must.

It's inevitable that government can't run a business profitably.  As the failings of the U.S. Post Office, AMTRAK Railways and Fannie May / Freddie Mac remind us, the bottom line always turns red.

Much like the bloody streets of once-great Detroit.