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Comments by Eric Schmidt CEO of Google in an interview with the NYT's Helft. Important points emerging from the interview. Google he says does not know how long this crisis will last. Response not to waste money means less hiring and more careful expense reviews, and more focus. Managers are very very sensitive to important aspects of its culture, so such perks will continue which make it fun to work at the company for employees. And he says careful investment inthe future. "If you tighten too much, you eliminate future innovation, and then you set yourself up for a really bad outcome five or ten years" down the road. And here is the most important point he makes in advising the Obama administration. Do not take up the economy first, and let energy come in afterwards, deal with all the major problems at once, especially energy, which are part of the problem and the opportunity for the economy. For instance as the auto industry shrinks these job losses can be filled with jobs making parts for renewable energy like wind turbines and blades, like solar energy generation parts. This is actually happening already, government could speed things up by mandates for renewable energy and by help to companies through incentives. See the link to this in the NYT about companies in places like Newton, Iowa where lost jobs at Maytag are being replaced by renewable energy jobs. And several million jobs can be generated in energy to make up losses in auto jobs in the midwest. These parts of the Obama plan may have come up through conversations with Schmidt and other advocates of this, and by seeing what is already happening as reported by the NYT in the link. It makes Obama look like a farsighted genius, but its just sharp observation and careful listening. Pickens is already advertising this on television for his wind farms in Texas. It is not only Google's thinking, as Schmidt says, but good common sense and some ballpark estimates that would tell one that it would save sending 1 trillion dollars to Middle East and other nations that is needed for investment at home in the U.S.. Schmidt's calculations are that this amount could be saved in 22 years through renewable energy, plug-in hybrids and other innovative technologies. ...

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What oil prices are doing to the redistribution of wealth across the globe. How rich and poor countries are coping. Money going to gasoline is still only 4% of disposable income of U.S. households and the USA hasn't lost its addiction to large vehicles, though there has been a moderate shift to smaller cars and SUV's. Chinese demand keeps growing. Fuel Economy standards are only now being changed and few alternatives are emerging quickly enough to make a difference in the short run. Though a worldwide recessionary climate could change things, no major change is expected. Airlines and the auto industry will be the most affected industries. Global warming and CO2 emissions will be a factor in evaluating how well these alternative are working. With oil and gas prices high, unfortunately coal use is increasing both in China and elsewhere. And ethanol hasn't won popularity because it uses up scarce resources of land, water and energy. A big change is the shift to most of the action going to government oil companies of developing countries, which are much larger now and have the resources to handle what the oil majors did before. Western oil service companies are working with government oil companies bringing access to technology....

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Incentives for automobile sales are increasing back up to about $3000 a year from $2000, as auto sales reach a level of 16.3 million annual sales in month of October 2014, according to KBB analysts.

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DJT 1.0 was led on the tariffs policy by USTR Robert Lighthizer, who had experience negotiating with the Japanese negotiators in the Reagan era. He is today respected by  Republicans, is seen in an important role in economic policy and to prepare the tariff policy actions of the new DJT administration. Lighthizer prefers to get Congress to take action with legislation. He also believes that domestic manufacturing will make gains with new and higher tariffs on Chinese imports. Lighthizer policy is falsely compared with Hoover Tariffs Act of 1930 when world trade was 9% of world GDP, today it is 63% of world GDP, and where under Hoover in 1930 the tariffs were across the board all countries 20,000 goods. Under Lighthizer on specific products where dumping is happening -steel, aluminium, autos, with Japan in 1960-70 or China 2000-2020 targeting American industries + technologies for takeover. And falsely when it comes to raising costs to each American family on average by $4000 a year by economists. The conventional view for business for 2000-2016 through Bush and Obama favoring free trade did not take into account the unusual experience of China which entered WTO in 1990, then expanded in a way unprecedented in history at 10-12% growth rates for 15 years destroying American manufacturing with dumping, having support of outshoring by companies in the US, and not giving reciprocal treatment for exports from the US to China. China also had unrestricted access to US technologies in this type of trade. Lighthizer's approach was to specifically address this problem not a general across the board tariffs on all goods (20,000 goods) on all countries as with the Hoover Tariffs Act in 1930. Lighthizer's approach adopted by DJT called for reciprocal trade response with China as the US had already done with Japan, not unilateral across the board tariffs, and when world trade had advanced to about zero tariff rates. And falsely compared to Hoover 1930 Act because under Hoover tariffs were 29-40%. raised to 60% when world trade was small, was 9% of GDP. The Biden administration has tacitly agreed with Lighthizer's vision by not reversing DJT tariffs. A new higher tariff will probably be selective based on the industry, country and what goals the US has set under the new administration for that industry. Some of the tariffs revenue may also be used for tax cuts. ...

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Auto production is expected to increase by 7.5% in the third quarter of 2011, according to IHS Automotive. This could boost GDP by half to one percentage point in the third quarter say economists.

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At a time of great inequality and lack of fairness in wages after the pandemic in 2023-2024 when the United Auto Workers were struggling to negotiate a living wage the $55.8 billion pay package for Musk will stand out for its sheer recklessness. Tesla lacks a collective agreement with its workers in Europe and the US and its efforts to keep wages low were seen as an impediment for the UAW to negotiate its agreement to correct some of the flaws that hurt workers in earlier agreements. These agreements were made when the auto industry was recovering in the previous decade and tiered wages made as a concession meant new workers could earn less than the poverty level. Rarely in American history have such extremes of pay existed and diminish the idea of America as a nation of opportunity for all, as a beacon to the world.

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This is a big desicion by the Obama administration, and has global implications for the amount of oil consumed and the emissions discharged. The Obama administration will introduce one national standard for automile emissions and mileage standards, replacing the patchwork of standards and skipping over the challenges to the California standards by using those standards to set the national rules. The rules take effect in 2012. It will create a new national standard for a car and light truck fleet in the USA, that is 40% cleaner and more fuel efficient by 2016 than it is now, with a new average of 35.5 miles per gallon. The current national standard is 25 miles per gallon, and this standard has fallen way behind the Japanese and the Europeans. The Europeans went through their battles for fuel efficiency a few years ago with auto industry resistance, and this was finally settled with tougher standards, giving the European industry advantages in technology over the Americans. The American car industry stalled higher standards, and what standards were passed were whittled down by heavy lobbying in Congress. As a result a battle raged between those interested in conservation and the environment and the Detroit car industry, especially in a deteriorating global environment for this type of prolific oil consumption on American highways. This lack of foresight on the part of Detroit carmakers, and their management, accelerated their financial collapse in 2008 and 2009, as large car and truck sales collapsed. That this tough new standard of 40% improvement in 2016, would in fact not have been possible without this fiinancial collapse and turning to the government for a bailout - with the entire board of General Motors being replaced- is one of the ironies of this situation. This decision will almost certainly accelerate the development of smaller models, and bring the kind of attention to them that will give them the quality and features and comfort to make them command higher prices and become profitable, as is the case in Europe. For too long the American small car became synonymous with being a lesser car in many dimensions of design, quality, comfort and performance, so that it became a cheap car that you upgraded from to a larger car as you became affluent. It had been that way, but did not have to be that way after the world had changed. And the larger models like the pickup trucks and large cars are more likely to be phased out with the new regulations. This will also bring a `new sanity to oil prices, as the reduced consumption in the US will accomodate the increased consumption in India from the small cars like the Tata Nano which look set to sell in the millions, and still keep oil affordable for tight budgets worldwide. In this sense it is a victory for global good sense. For President Obama this is a personal quest, as he co-sponsored 2 bills in 2006, during this second year in the US Senate, one to raise fuel economy standards, and the other to encourage the use of alternative fuels....

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Proof that this is not an ordinary deep recession like those in the post war period comes in the way foreign trade is reacting in this downturn. Already evidence of this has been seen in the way Germany has been affected because of slowing exports from China to the US. German exports to China have declined as the Chinese export model comes under severe stress. A similiar situation is playing out for Japan. Now new proof of the drop in foreign trade is emerging in Commerce Department figures. Combined exports and imports of the USA dropped 18% in 4 months July to November, to $326 billion from $398 billion. Two thirds of this drop was in imports. So China and Japan's exports to the USA are severely affected. Japan showed a 27% decline in exports in November, according to the Japanese Ministry of Finance, and imports dived 14%. According to calculations by the WSJ, Germany had 11.8% decline in foreign trade in November, and similiar numbers for France and Britain. Chief US Economist at IHS Global Insight, Nigel Gault, says this is going to be the worst global recession since World War II. Combined with what is happening to inventories, (see links) and what is happening in housing, banking, the auto industry, and other industries, the complications of non-transparent packaged financial products clogging the American financial system, the hugely indebted consumer (see links), and the $2.1 trillion and rising cost of the stimulus and bailouts needed by one estimate, suggest that the recovery forecast for 2009-2010 does not take into account all these simultaneously occurring patterns and developments working together. ...

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Sales of Ford's best sellig pickup truck F-150 fell 31% in May, compared to May 2007, and sales of SUV's and pickup trucks dropped 24%. Its sad that it took so long for the American car companies to phase down from the large vehicle business and shift resources in a big way to smaller cars.

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Ford may be preparing for a bigger loss in 2008 than the $2.7 billion loss in 2007. Sales of the Expedition and Explorer and the F-150 truck have dropped significantly. These sales have dropped nearly 30% through May of this year over last year for Expedition and Explorer, and dropped 19% on the F-150 truck. One anlayst says Ford has $7-9 billion after all its other obligations as a cushion so the automaker is on thin ice. GM faces similar problems.

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What does transformational liberalism mean? What does fairness mean? What does it mean to have unemployment insurance, to have health care, to have jobs, to open the door to the middle class for a college education. Is this transformational liberalism? Or is this "transformational liberalism" a part of a vocabulary of cliches that have lost meaning as the nation confronts job losses of the magnitude of 500,000 a month, and this is only the beginning. Much of the increased debt the nation is occurring is going to provide government help to financial institutions like the $177 billion that has gone to AIG so far, just one company, and there are the Citigroups and other companies like AIG. What does it mean to have "burden sharing," when the rest of the country is frightened, scared, losing jobs, losing savings, and at this juncture cliches may have lost meaning, as its those who profited most and got us into this crisis like the investment bankers and senior management of companies in industries like the mortgage industry, auto industry who will be paying their larger share not because of redistribution, but because they may be the ones who can most bear this burden wihtout great sacrifices like cutting down on necessities and basics. See the link to Countrywide's Kurland who plans to profit both by overselling mortgages and creating the tinder that started this fire, and now to profit by buying distressed properties at pennies on the dollar, with $200 million from Black Rock as an investor, and $200 million on stock he sold before the crisis. Is a Kurland who has not been subject to any regulatory action, or management of AIG, or Citigroup or GM or the other companies receiving federal money by the hundreds of billions of dollars about to ask the half amillion of unemployed and the others threatened with job loss each month, for "burden sharing"? Nobody wants to see any of this happen, what has happened, including the debt, but it has happened, and it was not engineered in the new budget or in the few weeks since early January 2009....

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House Speaker Pelosi and Majority leader Reid prempt the Bond-Levin proposal to use the $25 billion of funds from the energy efficiency retooling for operating expenses. They said there were just not enough votes to pass the change. And the general feeling was that the automakers had hurt their case more than they had helped it after 2 days of hearings in the Senate and the House on November 18-19, 2008. Pelosi put it this way, "until they show us the plan, we cannot show them the money." The automakers were asked to come up with a plan that shows accountability and viability. Pelosi is from California, a state that has seen its mandate for controlling auto emissions held up by the automakers lobbying and the Bush administration EPA, and which favors higher fuel efficiency, higher than the numbers passed in recent legislation, also held up by the automakers lobbying efforts. So there is a three way battle going on with the states in the midwest and the Bush administration pitted against Pelosi-Reid-Waxman and the younger Obama supporters in Congress for the $25 billion in energy efficiency retooling to be used for salaries and so on. And the other battle pitting the midwestern states against all those who call for strict conditions including firing management, and serious restructuring within or outside prepackaged bankruptcy. Reid and Pelosi called for Congress to reconvene on December 2. Reid said that what happened this week has not been good for the auto industry,, which is ominous, because the hearings showed an unrepentant automaker management which did not accept any of the errors made by management long before the credit crisis in October, which riled Congressmen. Another thing was the reference to corporate jets which came up in the hearings, and Reid emphasized as did others that these guys flying in in their corporate jets did not send a good message to people in Searchlight or Reno, Nevada. The reason this is important is that executive compensation and golden parachutes are moving right to the top as they do in such times, as evidenced by the story in the Wall Street Journal frontpage on November 20 about 120 executives making $21 billion in compensation in the last 5 years including failed companies, see the link. . ...

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The step back to larger vehicles in the sales of automobiles in the US in 2010.

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Car sales in Germany are up 40% from ayear ago. This is not about to happen in the USA. The cash for clunkers program in Germany is broad and less complicated.In Germany eligible cars have to 9 years old and the subsidy covered the purchase of any new car, regardless of size and fuel efficiency. In the US the program just signed by President Obama covers a narrow profile of customers. In the US customers who benefitare economically challenged and in the midst of adeep recession. Cars can't be over 25 years old, and can't have a combined highway and city fuel economy rating of more than 18 miles per gallon as calculated by EPA. To get the full $4500 credit customers must buy either a new truck or sport utility rated 5mpg higher than the clunker or scrapped vehicle, or a passenger car rated at least 10 mpg higher.And the credit is given instead of the trade in value, so if the trade in value is higher it doesn't help. The German government is giving away upto $4500 but it started out with 1.5 billion euros to get 600,000 clunkers off the road, but because of the popularity of the program has expanded it to 5 billion euros for 2 million cars and extended it to end of 2009. The US program only has $1 billion for 250,000 cars or one eight of what the Germans are doing for amuch larger car market. Because of the dire shape Detroit and much of the midwest is in, because of the slump in the auto industry, this may be a mistake and a missed opportunity to do what the Europeans are doing, and get an even bigger impact. The American car market and industry is taking a severe blow from the deep recession. Because of the depressed region the impact of a real clunkers for cash program that targets a broader profile, with bigger financing and designed to give a boost to the market, could make a real difference. At this point it is more of a program designed to help people turn in their gas guzzling trucks for passenger cars, and those driving a $200 car are not likely to be the kind of customer who goes out and buys a new car say dealers. See the link to Alan Blinder's stimulus proposal in July 29, 2008, that suggested a $20 billion program even before the current crisis. The present program has only $1 billion....

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If he now believes it is a structural shift and not a cyclical one, if he thinks consumer behavious is changing, and rapidly, CEO Wagoner of General Motors owes his shareholders and other stakeholders like the company's own employees and loyal customers an explanation of why it took so long for him to arrive at this conclusion. And why is the Hummer still sitting there in GM's product line, and the Chevy Suburban, vehicles that never belonged once the craze for bigger vehicles was past its peak in 2006 and 2007, some 1-2 years prior to today.

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IBM's sales increased in the 4th quarter 2007 by 10% to $28.9 billion and profits by 24%. What is behind this surprisng result when the US economy is seeing recession conditions and tech spending is affected? IBM's globalization strategy is paying off, it is no longer dependent on the US economy. Even to a much larger degree than companies like HP and Intel which get more than half their sales abroad, IBM has recently pursued an aggressive internationalization strategy. Even more than most companies seeing globalization affect the way they operate and expanding aggressively overseas- including companies like GE which see great scope in infrastructure spending in Asia- IBM has pursued internationalization with a vengeance. It has focussed on India, and there its growth has been breathtaking, taking talent away from Indian software companies that only recently were eating IBM's lunch. See the recent link on this. Today IBM has 73,000 employees in India. As the Indian ruppee has strengthened and other currencies aborad strengthen vs the US dollar IBM benefits from currency gains. Note that half of the revenue gain came from currency gains. This exaggerates even more the gains in getting sales and talent overseas. Whats next in IBM's plans? IBM will invest $1.6 billion in the next stage of emerging market expansion in Ukraine, Vietnam, Ecuador, Venezuela, Poland and the Czech Republic. The selection of countries is significant. Ukraine, Poland, And Czech Republic are attractive places for foreign investment and so is Vietnam. Analysts see this level of globalization of sales leading to a different response to recession type conditions in the home market. Instead of across the board cutbacks tech companies will be selective in their cutbacks. In many ways IBM leads the way and a pattern is being set for the whole of US business.The auto industry that emerges in the next few years will tend to look more and more like these tech companies with half or more sales generated abroad, and similiarly for other industries. ...

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Johnson Controls offered $1.25 billion for Visteon's auto interiors and electronics businesses. Visteon is reorganizing under Chapter 11 protection. Johnson Controls CEO, Roell, says the combined operations would give global scale and complementary capabilities. For Johnson Controls there are particular advantages to combining the Visteon operations in China with its own operations there, resulting in scale and combined revenues for China of $7 billion. Johnson Controls says Visteon's main customer and joint venture partner support the acquisition.