Friday, December 05, 2008

George Ryan for U.S. Senator

Here’s who Gov. Rod Blagojevich should appoint to fill president-elect Barack Obama’s set as U.S. Senator: George Ryan.

Wait, wait. It’s perfect. Kill two birds—as it were—with one stone. All the stress would be lifted from the shoulders of local and state political creatures in one fell swoop. They could return to their primary occupations of doing bigger and badder things by resolving the two biggest issues weighing them down: Should President George W. Bush (or Obama when he becomes president) grant clemency to convicted felon and former Illinois Gov. George Ryan? And who should be Illinois get Obama’s seat.

The solution is flawless. It is the consummate intersection of two apparently unrelated bafflements.

Read more in the Chicago Daily Observer

Justice for Park Ridge and Des Plaines?

Several years ago, Park Ridge and Des Plaines withdrew their opposition to the expansion of O'Hare Airport. In Des Plaines, voters elected a pro-expansion mayor after years of opposition, thanks to some heavy footwork done by the Democratic patronage army in the east part of town. Before that, the Des Plaines mayor withdrew his town's membership in the Suburban O'Hare Commission, a consortium of communities opposing O'Hare expansion.

Having sold out, the towns now are full of angry residents complaining about the increased noise that the new northern runway at O'Hare has brought to their communities. According to the Chicago Tribune, no one expected the runway to carry as much traffic as it does, so now Des Plaines and Park Ridge are suffering from the consequences of their folly by lower-flying planes and increased numbers of flights. Apparently, they believed Chicago when it assured everyone, especially in those communities, that the northern runway would not have that much impact on their quality of life.

Perhaps Des Plaines and Park Ridge will have second thoughts and rejoin the opposition.

Tuesday, December 02, 2008

"Experts" blow their Black Friday predictions

By Dennis Byrne
Chicago Tribune

The dismal retail sales figures are in for Black Friday and the news is . . . good?

Wait a minute, the news was supposed to be bad, awful, ghastly, dreadful, etc. Analysts, almost to the person, were predicting that retail sales would decline from last year's level, if not plummet. Some forecast economic calamity, because so much depends on consumer spending.

Not to pick on anyone in particular, but here are a few examples of pre-Black Friday conjectures:

• Marshal Cohen, chief retail analyst with NPD Group, said "this could be the worst holiday [shopping season] ever."

• ABI Research analyst Michael Wolf said Black Friday could end with consumers spending less than usual.

• A Wall Street Journal headline predicted a "Bleak Friday for retailers."

But as I write this, the weekend sales figures are starting to trickle in and the sages look like they're turning out to be all wet. Chicago-based ShopperTrak RCT Corp. said sales not only didn't fall, but actually increased 3 percent over a year ago, to $10.6 billion. PayPal saw almost 34 percent more transactions and a 26 percent increase in sales online over last year's Black Friday. The National Retail Federation's 2008 Black Friday Weekend survey found shoppers spent an average of $372.57 over the weekend, a 7.2 percent increase over last year's $347.55. Fourteen percent more shoppers spent $41 billion, it said. In short, the analysts and many of my media colleagues who delight in amplifying any negative prediction—the worse, the louder—blew it. Too bad; maybe if they had been right, there would have been no crowd of idiots at a Wal-Mart store to trample an employee to death.

This wouldn't be worth writing about if the sages weren't so universally wrong, if we didn't give them so much weight and if so much of the economy didn't turn sour every time they opened their mouths. The fact is, despite their golden credentials, the initials after their names and affiliations with the high-end financial institutions, they don't know any more about the future than you or I. Yet, they and their grim prognostications appear as an endless parade on the business television network CNBC and on the financial pages. "The market hasn't bottomed out yet." "The recession will be deeper than anything we've seen since the Great Depression." "We're in for another three years of economic reversals."

"Baloney. Bushwa. How do you know?" I shout at the TV screen. They don't. Michael Lewis told us that from personal experience in his book, "Liar's Poker." He explains it again in Conde Nast's December Portfolio.com: "To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grown-ups remains a mystery to me. I was 24 years old, with no experience of, or particular interest in, guessing which stocks and bonds would rise and which would fall."

He went on: "I'd never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable."

I dare that his predictions then were just as good as the predictions we hear today. Lewis said this nonsense was unsustainable, yet here it is, more than 20 years later, and we continue to see the same kind of specious advice flowing out of Wall Street and the media. Upon this, Americans continue to make decisions on how much to spend and invest, and the more we listen, the worse the economy becomes.

When oil was hovering around $150 a barrel, the same folks guaranteed us that the price would go even higher and that high energy costs were a permanent condition that would fundamentally change our society. I'm not saying that that day won't come. But now that oil is about $50 a barrel, can't we be equally glad? Gasoline and home prices have dropped precipitously; that's bad for some, but great for others.

As the start of the Christmas shopping season tells us, there are bargains everywhere and, since when are low-priced homes, cars, electronics and other goods really horrible things? Can't we at least pretend that there's some good news to be heard?

Monday, December 01, 2008

Big Bailouts, Bigger Bucks

Wonder how much the bailout compares with other national catastrophes? Check this out.

Hat tip to Newsalert

Durbin asks Bush to commute Ryan sentence

The surprise is that some people might be surprised by Durbin's request to spring this convicted felon. Chicago Tribune columnist John Kass, who doesn't want Ryan sprung, says he respects Durbin and urged him on Sunday not to proceed with this foolishness. Here I depart from John; my view of Durbin is closer to Steve Neal's, the late Sun-Times columnist, who never ran out of names--appropriately so--to call this senator whose practice, until now apparently, is to stick his thumb into the air to see which way the opinion was blowing.

That Durbin would buck the overwhelming public sentiment that Ryan should serve more of his term shows where his loyalties are: with the corrupt good old boys and the public be damned. Having just been re-elected to another six-year Senate term, he figures he can get away with it, and considering the wisdom of Illinois voters and who they have put in office, the odds are with Durbin.

Durbin also chose to spit in the eye of one of the jurors in the Ryan trial, reaffirming his decision that Ryan is guilty. That, too, for Durbin counts for nothing.

Thus is revealed the true Durbin. The whole thing is cheesy and sordid beyond what we can usually expect from Illinois politicians.

Who will hold Daley accountable for O’Hare?

Dan Curry asks the question. Who, indeed?

Blame the media

This New York Times writer blames the media for the crowd that trampled a Wal-Mart employee to death in a frenzy to get to the marked-down Christmas sale merchandise. As much as I like to blame the media for lots of stuff, I think this is a stretch. The writer, David Carr, postulates that media coverage of the deals worked the shoppers into such a lather over buying "stuff" that they would literally kill for it.

He misses a bigger point. Black Friday and the holiday shopping mania is the result of turning a religious celebration into a commercial fetish. Carr doesn't mention the contamination of Christmas by the secular, and that makes him as guilty as the rest of the media.

Saturday, November 29, 2008

Sam Zell speaks

For those who ask me about the future of the Chicago Tribune, you might be interested in this lengthy interview with the man who would rescue the newspaper business.

Thursday, November 27, 2008

Bailout Spending is Out of Control

By Dennis Byrne
RealClearPolitics

Has anyone bothered to ask: Why $700 billion? Why not $800 billion to bail out the economy? Or a trillion? Jeez, as long as the dam has burst, why not make it a cool $7 trillion?

Okay, $7 trillion it is, and if you think that's an exaggeration, you're wrong. In this year alone, we have committed an amount that is more than half of our entire annual gross national product to assorted bailouts and guarantees. No, that doesn't mean that we have diverted half GNP for bailouts; it means that we have created half our gross national product virtually out of nothing.

Read more in RealClearPolitics.com

Iraqi Parliament Approves U.S. Security Pact

Do you think that President George W. Bush will get any credit for this?

This was one more thing that the anti-war left said would never happen--just like the surge wouldn't work or that yes, "while the surge might have worked, there will be no political solution." Where is the permanent "civil war" that the Bush haters said that Iraq would plunge into?

This is the country that Vice President-elect Joe Biden said should be divided into three, because they'll never be able to get together.

Do you think that anyone now will admit that we have won in Iraq and the war is virtually over?


Wednesday, November 26, 2008

The Garbage in Chicago's Budget

By Dennis Byrne
The Chicago Daily Observer

If I don’t look fast, my suburban garbage truck will have come and gone without my noticing. And unlike in Chicago, which has three people working each truck, my scavenger service has only one—the driver.

The holy writ in Chicago is that you can’t have just one, and therein lies one of the reasons that Mayor Richard M. Daley’s city is in such awful financial shape: Chicago’s government doesn’t exist for the benefit of those who pay for it; it’s purpose is to feather the nest of the people who run it.

How better to explain the recently approved $6-billion city budget that had to levy new taxes to eliminate a $469 million deficit? Of course, Chicago attempted to blame the sagging economy for the shortfall—and that’s surely part of it—but the bigger part is the waste and corruption built into the Machine.

Consider the deal that requires three-man crews on each garbage truck—one to drive and two labors to load....

Read more in the Chicago Daily Observer

Tuesday, November 25, 2008

Durbin may seek to commute former Gov. George Ryan's sentence

More evidence of the palsy relationship between Democrats and Republicans in Illinois that Tribune columnist John Kass calls the "combine." At the front end, they combine to shaft us with their insider deals and graft; at the other, they get each other out of prison. A great tag team.

Illinois' bad joke

By Dennis Byrne
Chicago Tribune

If Illinois were a country, it would be Iceland.

That's the country whose high-flying economy collapsed recently, the first to fail in the global economic slump. Crowds, angry at the government's failure to prevent the crisis, have taken to the streets and called for an immediate election.

Don't expect any mobs to show up in Illinois demanding the expulsion of our government for Illinois' fiscal mess. Illinois voters are so tolerant that the government could sell the state to the Outfit for a box of trinkets and no one would notice. Illinois voters have no reason to feel smug about letting conditions get as far out of hand as they did in Iceland.

Illinois is facing a budget deficit of more than $2.5 billion and its backlog of unpaid bills is $4 billion. But, unlike Iceland, Illinois can't blame the global collapse of the credit markets for its financial mess. This has been going on for years, and unlike Iceland, there's no German bank standing by to bail us out. The fact is that no one is standing by but us, and we have shown ourselves to be as incompetent as the American banks that bought hundreds of billions of worthless mortgage derivatives.

Illinois Comptroller Dan Hynes tried recently to rattle our cage with another dire prediction of the morass we're creating, but who's listening? It's such boring stuff, you know. Except for what Hynes warns is coming: poor families denied medical care; schools crying for money; local governments failing to meet payrolls; state police cars parked; mass transit cutting service or raising fares.

Hey, Democrats, these are your people, the ones you supposedly care the most about. Hey, Democrats, the people running the state are yours too. But you keep putting them back into office year after year, despite their incompetence, petty quarreling and whatever else occupies their wee minds. The only one of them doing a good job is Hynes, whose latest warning should make everyone wonder: If our economy is in such a mess, and our 401(k)s have gone to pot, and the federal government is setting stratospheric records for borrowing, and no one is making loans, then how will Illinois ever get out of this mess?

Hynes said the $4 billion in unpaid bills could balloon to $5 billion by March. The state is three months behind in paying its suppliers and by spring it could be five months behind. Keep this up and the state might bankrupt the businesses it needs for products and services.

If you were a doctor or a hospital, how long would you continue to give away your services under these conditions? About 2.2 million people—17 percent of the state's population—rely on Medicaid. Most are children, low-income adults and low-income pregnant women. But the elderly, disabled and blind consume the greatest proportion of aid. When the state goes bankrupt, there will be the usual whine: "How come no one warned us?" And, "Somebody do something!"

Frankly, I don't know what can be done. Hynes recommends urgent short-term borrowing that will keep suppliers going for now. He also wants some form of federal aid, such as paying the state its Medicaid reimbursement before services are provided (in effect, turning reimbursements into advances). He also wants the state to eliminate "Catch 25" (actually Section 25 of the Illinois Finance Act), which requires the state to pay all its bills in the same fiscal year in which they were incurred, with a few exceptions, such as Medicaid. This is a giant loophole that allows the state to push the huge pile of unpaid Medicaid bills into the next fiscal year, and use the money that should have been set aside for Medicaid for other purposes, so that the state budget (fraudulently) looks in better shape than it actually is.

I'm not sure how well any of that will work; it might already be too late. Who would lend Illinois money in its current financial condition? How can we count on the federal government for help when it is borrowing every dollar in sight for its assorted bailouts, mortgage purchases, bank and financial institution assistance and impending auto industry loans coming to more than $1 trillion?

Oh, that's right. In Washington, the answer to any problem is to borrow more. And more. Look for Washington to pull Illinois out of the fire and let us cheer all the taxpayers in the other 49 states.

Thursday, November 20, 2008

O’Hare expansion is on life support

Is the major airlines’ rejection of further O’Hare Airport expansion a death knell for the $15-billion-plus project, or is it, as the Daley administration asserts, just a hiccup in the process, caused, in part, by the current economic downturn?

Predictions are risky, but without the airlines shoveling billions of dollars into the expansion, as the Daley administration was counting on, it’s hard to see where the money will come from. Except from you, the passenger, in the form of exorbitantly higher taxes.

Chicago had trouble enough overcoming the many objections for Phase I of the expansion project, which included the new northern runway opened today with great fanfare. Financing always has been a problem, and the airlines never committed to funding Phase II. Now, the airlines have gone even further, by telling the Federal Aviation Administration that the expansion should be stopped.

Rosemarie Andolino, the city’s director of the project, ridiculously claimed that the airlines refusal was nothing new, and if she believes that, she should look at the loss in value of the O’Hare bonds after the story came out this morning. The city several years ago engineered an increase in the seat tax charged to passengers to help fund the project, but the tax could never produce enough revenues to complete the project, even amortized over the next generation.

The airlines’ objections also re-open a new front in the controversy: the technical viability of the project. Specifically, they ridiculed the idea of a new terminal on the airport’s western boundary as “ill-conceived,” reflecting the opponents’ criticism. Chicago never explained—even to the airlines, we now discover—how the new western terminal, sitting in isolation miles from the main terminals—would work. Extension of the airport’s people mover between the terminals? If so, how much would that cost? And why isn’t that cost included in the overall project cost estimate? And where would the money come from?

That’s just one of the important questions that the city skips over. For example: the real restriction on O’Hare capacity is the crowded airspace serving O’Hare and Midway airports. That’s one of the reasons that the FAA and other aviation experts said that airline capacity expansion only can realistically come from a new south suburban airport. Chicago never has explained how it would expand the sky to accommodate the unrealistic number of flights it maintains the expansion could support.

Or this: Where would the promised, new western entrance go to accommodate the long-sought completion of the Elgin-O’Hare Expressway—now a freeway to nowhere—and a long-promised “ring road” around the airport. Project maps have never clearly shown the new route; the administration has failed to answer convincingly the most fundamental question of whether it would be on or off airport property. By almost everyone’s reckoning, the airport has no room for it. If it goes off the airport, it would lead to even greater dislocations of homes and businesses. No money is shown in the plan for this either.

Andolino laughably asserted that the inauguration of the new runway has proven expansion opponents wrong. If anything, it has revealed the dishonesty of the Daley administration: The new runway, the city originally asserted, would increase airport capacity. It won’t. About the only thing it has a chance of accomplishing, according to the FAA, is delay reduction delays, by an unimpressive average 30 seconds.

Too many obstacles, financial, technical and otherwise, stand in the way of the completion of the vast expansion project. Any rational person would say that the project is, or at least should be, dead, dead, dead. But then again, the project was never rational to start with.

United CEO supports O'Hare expansion

At least that's what he says.

But that's not what the airline said in writing, to the Federal Aviation Administration, and that's what counts. If the expansion still has the airline's full support, Glen, show us the money, but more of our own goes down the drain.

Who will put Bensenville back together again?

The east side of Bensenville, a working class suburb, has been virtually destroyed for an expansion of O’Hare Airport that looks now like it will never happen.

So, will Chicago Mayor Richard M. Daley and his city pay to restore what was once the largest and most successful community of affordable housing in DuPage County? They should, but don’t count on it.

What Daley and his greedy cronies did to Bensenville, a community that had minded its own business for more than 100 years, borders on the criminal. Daley and airport planners knew that they did not need to destroy hundreds of Bensenville homes for years, until later phases of O’Hare expansion were scheduled. Yet, they launched an unprecedented political, economic and government attack that exceeded bounds of decency.

To review: Bensenville, with DuPage County, state and federal assistance, had successfully nurtured this neighborhood of hundreds of homes and businesses. It was modest neighborhood, yes, but it was a viable, clean and healthy neighborhood, exactly what affordable housing advocates (Daley counts himself among them) say that is needed in the job-rich northwest suburbs. But Bensenville sits southwest of O’Hare Airport, in the path of one of the unprecedented, unworkable and dangerous six parallel runways that Daley wanted to install. Daley wanted it at all costs.

The costs, of course, were paid by us taxpayers.

Standing in the way of Daley’s blind hunger to take control of east Bensenville, years before necessary, was long-time Bensenville President John Geils, and his Elk Grove Village ally, Mayor Craig Johnson. When all around them—once proud expansion opponents in neighboring suburbs in the Suburban O’Hare Commission—were being picked off one-by-one by Daley, the two stood firm, together.

Among the obstacles to Daley’s covetedness, was a serious legal one. To obtain the Bensenville properties, Chicago—as O’Hare’s owner—had to threaten condemnation. Trouble was, Bensenville was a separate municipality, in another county at that, and one municipality didn’t have the legal power to condemn property in another one. Long story short: Daley and his allies (in what Tribune columnist John Kass calls the state’s bi-partisan combine of greedy and corrupt politicians and special interests) simply passed a law, no problem. Now Chicago could cross borders and raid another town’s homes. And, by the way, any challenges to that authority would have to be heard in a Cook County court, where the Chicago Machine pretty much control who gets appointed to the bench.

Daley could have held off the acquisition, but in what only can be a fit of spite brought on by a small-town mayor challenging his power, he proceeded. One by one, Chicago picked off the homeowners and renters, many who had become resigned to their fate by the constant barrage of negativity in the media and elsewhere about the future of their neighborhood. Chicago’s intent was to create momentum, by buying and tearing down enough homes to create near-panic selling. In Chicago, that’s called blockbusting, and it is illegal when real estate agents use it to flip a racially changing neighborhood. But apparently it’s okay when Daley wants to use it for his “greater good.”

Bensenville has refused to issue demolition permits to Chicago to tear down the homes it owns and turn the area into something akin to a bombed-out city. Chicago has sued the village to permit the teardowns and the question is now in the courts.

That might have been the most egregious attack on Bensenville and Geils, but it certainly wasn’t the only one. Geils faced a multitude of personal attacks and once in a re-election campaign, he was ruled off the ballot for the most minor of technical errors. Still, he won by a write-in vote. In Springfield, the Legislature and others have targeted various Geils programs, such as combining the police and fire departments (among the handful of Illinois communities that have combined departments, only Bensenville was targeted). Daley’s strategy was to isolate Geils and Johnson, to make them appear to be small-town quacks that were standing in the way of progress. Much of the media and the public bought this slander.

Geils and Johnson now have a taste of justification. The communities hired some of the most knowledgeable and independent aviation experts in the nation, including a former acting administrator of the Federal Aviation Administration, to analyze Daley’s expansion plans. Their criticisms of the plan now have been echoed by the airlines, which want out of future expansion plans, portions of what they called “ill-conceived.” United, in a letter to the FAA last summer, said, “Unfortunately, the city did not accept the more modest and financially prudent approach.”

Could that have been the approach that Geils and Johnson have long proposed: a “modest” O’Hare expansion that made more sense without the huge disruptions caused by Daley’s plan, along with a south suburban airport? That’s what anyone who’s interested in the welfare of the region would advocate. Daley won’t.

Time to support a better alternative to O’Hare Expansion

The airlines’ stinging rebuke (see below) to Chicago Mayor Richard Daley’s O’Hare expansion plans leaves an obvious question:

If O’Hare expansion isn’t the answer to the crowded skies over Chicago, what is?

The answer has been out there for decades: a new south suburban airport. And fortunately, the groundwork already has been laid. A commission of Chicago suburbs won agreement from two international public works developers to design, finance, build and operate the new airport—at virtually no public cost.

Sadly, Daley and his cronies have stymied those plans, so what could have already been is still a cornfield. It now will take a major shift in political, civic and business alliances to restart the project, if it is not too late. The economic downturn and the credit crunch may have cooled the developers’ interest—which had previously remained strong despite Daley’s assault on the project.

One of the first issues that needs to be settled is: Who would control the new airport? Interest for the new airport had stagnated while Daley was pushing O’Hare expansion, until a group of southern suburbs plus O’Hare neighbors Bensenville and Elk Grove Village got the project untracked. Under the bi-partisan leadership of Rep. Jesse Jackson, Jr. and the late Rep. Henry Hyde, the group formed a commission that was close to signing up the international developers, until Daley, seeing his cherished O’Hare jobs and contracts threatened by the competition, “put a brick on” the development.

In this, he rounded up a wide array of allies in the public and private sector, but in his most effective move, he created a competitor to the Jackson group. Will County, which had previously shown no interest in the airport, suddenly insisted that it, and not the Jackson group, had the exclusive authority to build the airport. Daley was able to work this magic because Democratic influence was growing in the previously solid Republican county, and whatever quid pro quos the powerful Democratic Chicago mayor could offer were eagerly sought and accepted there. Opposition to the Jackson plan was the price they willingly paid.

In an irrational and wasteful twist, the Illinois Legislature and the Illinois Department of Transportation, did the un-Solomon like thing and spilt the baby. Rejecting the developers who were on the doorstep and ready to begin, they gave the competing groups equal—as it were—standing to build and run the airport. Back to square one in the lengthy bureaucratic board game, the two now are seeking separate approvals from the FAA (which years ago had backed the project) and the state. So now the state has become so mired in “process” that the airport’s start is nowhere in sight—an outcome that suits Daley just fine, giving him time to make his O’Hare expansion a fait accompli.

One thing was wrong, however, with Daley’s scheme. The expansion plan was bound to fail of its own weight. He was blinded by his determination to hold on to O’Hare patronage and put too much faith in the yes-people who surrounded him, and assured him that the expansion was “doable.”

How now to re-energize the south suburban airport? The first gigantic hurdle is to get the major players who supported the expansion to admit that they were wrong. Daley might never do this, but the business, civic, media and labor community that so gladly fell in behind the mayor’s ego can perhaps turn the tide. They owe it to the body politic.

The Federal Aviation Administration, too, will have to reassert its expertise, instead of collapsing as it did before powerful political forces in the city, state and Washington that were aligned with Daley. The FAA years ago had said that the south suburban airport was the best solution, and nothing has changed to justify abandoning that position.

Now comes the hard part: Anything that happens will need state approval, and Illinois is so racked with mis- and mal-governance that it is hard to imagine rational decision-making ever happening. That state is $4 billion—almost $5 billion—in the red, and no solution is in sight. Perhaps the prospect of privately financed jobs and contracts—which will be so rare in the near future—would help them decide to back the new airport.

As for Daley, Jackson’s group had repeatedly said they would be glad to split the patronage with the mayor. It was a price they were willing to pay to move ahead with a solution that would be beneficial for the entire region. Sharing the spoils may look a bit more attractive to Daley now that the airlines have thrown a wrench into the O’Hare works. Then, again, sharing has never been one of Daley’s strong points

Airlines at last say no to further O’Hare expansion

In a stunning reversal and a slap at Chicago Mayor Richard M. Daley’s grandiose dream to expand O’Hare International Airport, the major carriers have rejected costly city plans for additional runways and terminals the airport.

The significance of the reversal, disclosed today by Chicago Tribune reporters Jon Hilkevitch and Julie Johnson, would be difficult to understate. In rejecting further expansion, the airlines have reversed their long-held support of Daley’s expansion plans, and now have sided with long-time critics. Among them were a former acting administrator of the Federal Aviation Administration and other prominent airline industry experts hired by expansion opponents to analyze the plans.

Aside from vindication for the opponents, the apparent delay, if not death, of the expansion plans raises significant questions for the Chicago region, now to be honestly faced. Chief among them is the fate of the proposed south suburban airport, which has been moldering on the drawing boards, thanks in great part to Daley’s opposition.

Wednesday, November 19, 2008

Quashing low-fare competition at O’Hare

By Dennis Byrne
Chicago Daily Observer

The upstart and lower-fare Virgin Airlines’ plans to initiate service at O’Hare Airport, and thus bring competition, more jobs and economic development to the Chicago area, appears jeopardized by the sweetheart deal between the Daley administration and the legacy airlines that control the airport.

Which raises the question: When will someone, especially in the business community that is so dependent on air travel, finally get mad on the lunatic ways of O’Hare Airport.

Virgin Airlines, which provides international service from both coasts, has been planning a major expansion into America’s heartland, with O’Hare as its base. But it has been stymied because it has been unable to lease gates at the airport, even though more than enough are sitting idle. Virgin said it will have to decide in a few weeks whether to cancel its O’Hare plans and look for another alternative. Meaning, I assume, another Midwest city in which to locate its hub.

The reason Virgin can’t secure one of those empty gates? Because the gates are controlled by United and American airlines, which have a lock on some 80 percent of O’Hare’s business. And how can they get away with a duopoly at O’Hare when the airline industry is supposedly deregulated?

Read more in The Chicago Daily Observer

Tuesday, November 18, 2008

GM should file for bankruptcy

By Dennis Byrne
Chicago Tribune

President-elect Barack Obama and Democrats are facing the first important test of their promise of change, and they are about to land heavily on the side of the status quo in the most embarrassing and contemptible way.

In their hyperventilated drive to "save" General Motors (read: the United Auto Workers union), they are deploying our wallets to save a failed business, when real "change" would be bankruptcy, from which would emerge a better and more competitive enterprise.

The $25 billion lifeline, to be sliced from the $700 billion Troubled Assets Relief Program meant for the financial industry, rewards GM for decades of incompetence, greed and sterile thinking. We should scram as far as possible from GM's legacy, not resuscitate it. But if Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi and President George W. Bush, with Obama's blessing, put GM on life support, they would be wallowing in exactly the kind of capitulation to special interests that just weeks ago Democrats condemned.

The UAW has spent $24.6 million in campaign contributions, virtually all to Democratic candidates, in the last 20 years, while GM has spent $10 million on lobbying in just 2008, according to the non-partisan OpenSecrets.org. A few weeks before the election, the UAW announced a $3 million ad campaign in support of Obama.

These millions don't include the uncounted piles of dough that the company and union have spent in the last few weeks to pressure Washington into a bailout.

Over the weekend, Pelosi assured us that GM and the UAW wouldn't get off scot-free, that the $25 billion would come with "strings" attached, such as requiring Detroit to embrace the technology of more fuel-efficient cars—never mind that a different $25 billion of our money already has been set aside in loans for that purpose. Pelosi said the additional $25 billion wouldn't be "new money" because it was coming from "existing" bailout funds. You mean that $700 billion, which suddenly showed up in the last month from who knows where, isn't new money? Stop it, Nancy.

Pelosi's other strings would include a vague company "restructuring" to assure its "long-term" viability. Yeah, sure, we can trust the auto industry and UAW, which made this mess in the first place (GM's car sales began sliding a long time before the current financial crisis arrived), to do what it should have done decades ago.

The best, and perhaps only, way to accomplish what needs to be done is for a bankruptcy judge and his appointed trustee to oversee a top-to-bottom reorganization of the high-bound, uncreative and sluggish company. (For example: How about breaking up GM, which has too many models and divisions, into separate companies, freeing themselves of the brain lock imposed by a lumbering bureaucracy and an unimaginative central management?)

What's needed is a start-over. And a bankruptcy judge has the power to force the company to go back to square one by, among other things, forcing a recasting of the ridiculously rich union contracts. Stockholders, bondholders and other creditors and suppliers will be hurt by a bankruptcy, so why should organized labor escape whole?

If there absolutely must be a government cash infusion, New York University business professor Edward Altman says it should only be made on the condition of GM declaring bankruptcy, to protect the public's interest. No one can predict that the economy won't suffer greatly if GM is ushered into bankruptcy, but anyone who insists that he knows that a nationwide depression will surely follow if we don't cough up $25 billion more for GM is a faker, even a liar.

Declaring bankruptcy doesn't mean that plant and dealership doors would be padlocked the next day and hundreds of thousands of workers would be instantly on the street—an impression that GM and UAW propagandists would like everyone to believe.

Bankruptcy requires an orderly process, prescribed by law, under which the company can be reorganized and emerge strong and resilient. Reorganization would allow the assembly lines to continue running while arranging reasonable warranties, maintenance and service for customers.

Sure, it will take creativity and skill to handle a meaningful transformation, but that will never happen if the Washington friends of GM and UAW plop $25 billion in their laps.

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DeSantis replies to Trump

 "Check the scoreboard." Follow this link:  https://fb.watch/gPF0Y6cq5P/