Let’s start with a small piece of good news. The economy’s performance in the first quarter wasn’t as bad as first estimated. GDP fell at a 5.7% rate, instead of the 6.1% given earlier. It’s still horrible, but economists say things could look quite a bit better (relative to Q1) when second quarter numbers come out. Some good things to read this morning, starting with GM:
PBS’s Newshour [has a good interview](Newshour ) with the head of the UAW, Ron Gettelfinger. He points fingers in several directions:
“General Motors’ stock, when we went into ’07 negotiations, was somewhere in the range of $20 a share. When we came out of negotiations, it was $42 a share.
Now, we know where it’s at today, and how did it get here today? It got here because of the collapse of the financial institutions. It got here because of the subprime housing. It got here because of tight money. It got here because of a collapse of industry sales around the world.”
The interviewer challenges Gettelfinger on years of “gold-plated benefits” and high wages:
Gettelfinger: “I don’t know what anybody would mean when they say “made out like bandits.” I can show you a lot of horror stories, UAW retirees that worked 30, 40 years in a plant. They’ve been retired for a number of years. Their pension may be in the neighborhood of $260 to $300, $400, $500 a month, plus what they get in Social Security. Is that making out like a bandit?
You know, people have invested their lives. This is not about financial engineering on the part of workers. This is people that got up and went to work every day, worked when they were asked, whether it was on a holiday or whatever, that devoted their entire life to this company.
And they were made a promise, a commitment. They were given a guarantee by the company and our union. That’s a fact.”
Elsewhere, Steven Pearlstein of the Washington Post, says the most important thing about the GM bankruptcy is for the government to have an exit strategy:
It would be great if taxpayers could earn a big profit from their auto investments, but more important is ending this incursion into the private sector as quickly as possible. If President Obama can get most of our troops out of Iraq by the end of 2010, he ought to be able to get our money out of Detroit by then, as well.
But Slate columnist Daniel Gross says the bankruptcy itself probably won’t be as swift or as efficient as people might think. He relates his own experience:
“In the early 1990s, when I covered bankruptcy court, I enjoyed scouring through the applications for bankruptcy fees. The best were those produced by the most anal-retentive of the professionals, the accountants. They meticulously counted the precise number of minutes each worked on the matter–and then calculated the precise number of minutes it took them to count the precise number of minutes each professional worked on the matter. I remember a line item, more than $10,000, that was the bill for preparing the bill.”
[NPR has a story](NPR ) about the President announcing plans today for cybersecurity and a czar to oversee it. Some pretty scary stuff in there about foreign governments stealing military secrets online and foreign companies stealing technology/intellectual property from
American firms:
“They’re not mom-and-pop operations; they’re not little kids,” he says. “These are the spies of the 21st century, and they’ve been very successful. It’s going to be hard for any company or any single city or police department or homeland security agency to deal with these very sophisticated opponents. It’s going to take a national effort.”
Republican Rep. Michael McCaul of Texas, who contributed to a recent CSIS cybersecurity report, says the problem reaches across government.
“We know that last year alone, almost every federal agency had been penetrated and massive amounts of data were stolen from our government,” McCaul says.
Silicon Alley Insider posts an interview with NBC CEO Jeff Zucker. I thought it was interesting that he said Hulu would be profitable soon, especially when you consider how unprofitable YouTube is.
And this tidbit for NFL fans. Remember Wayne Chrebet, the little receiver for the New York Jets? He was diminutive in size, but he caught the second-most passes in Jets history. Well, he’s been hired by Morgan Stanley as a financial adviser.
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