So far it doesn’t look good for the Big 3’s chances at receiving a bailout anytime soon.

The situation that the U.S. automotive industry is in leaves us with a tough dichotomy: while it would be devastating for the industry to go under, it would also be a bad idea to reward the executives for their consistent failure. The best solution will address both of these seemingly opposing concerns.

Let’s be honest here. The executives of Ford, GM, and Chrysler have squandered away more opportunities than most companies will ever have a shot at, and the country as a whole ends up being the loser for it.

The automotive companies are not in the same situation as the oil companies. The increased demand for fuel-efficient vehicles should not have been seen as a threat, but as an amazing opportunity. As much of the world industrializes and joins the market for automobiles, specifically those that require less fossil-fuel and are more environmentally friendly, the global market for Prius-like products is ripe for capitalization. Unfortunately, the executives at U.S. automotive companies didn’t see this opportunity, and in turn spent their development budgets on creating faster, bigger, and more fuel-consuming vehicles.

American auto manufacturers had the opportunity to be the vanguard in a new generation of transportation products with a global market eager to purchase those products. That opportunity was squandered.

American-made hybrids and other fuel-efficient vehicles could have driven the United States economy into the 21st Century with great strength. Imagine how much money could be saved by the United States Postal Service if they had hybrid vehicles. Taxi companies would be able to save a ton on overhead costs while buying American. The development of fuel-efficient emergency vehicles could have cut down health care costs. Products across the board would have become more affordable due to a dramatic decrease in costs throughout their supply chains. Businesses would be able to spend more capital on employees instead of on fuel costs.

This opportunity existed.

Capitalism is based on the concept of adapt or perish. These auto executives refused to adapt even though the opportunities were there. While Toyota moved towards the future, the Big 3 remained locked in the past. While their companies are hanging on the brink of bankruptcy due mostly to their incompetence, forced to beg Congress for a bailout, they are collecting huge salaries and continue to live like kings. They even chartered expensive private jets for themselves to go beg for our money. Pardon the pun, but that just won’t fly.

Advocates for huge CEO salaries say that they need to pay huge amounts to compete with other companies for the best talent, that it is demand that makes these people worth so much. I think it’s clear that the current executives of the Big 3 are a little light on the talent, and personally I wouldn’t want to hire one to run a lemonade stand.

So here is my solution. Bail out the automotive companies under very specific conditions. First, the current CEOs all have to be fired without getting golden parachutes. Second, CEO salaries need to be limited if the American people are subsidizing the company. Third, the companies need to step up their development of those fuel-efficient vehicles that could have prevented this in the first place.

Maybe, just maybe, the opportunity hasn’t completely passed.

Most people familiar with government employment are well aware of the catch-22 of working for Congress: you need Hill experience to get a job, but you need a job to get Hill experience. For most people the only way to break into the ranks of Hill staffers is to get an unpaid internship.

Here is my problem with this situation. It is expensive to live in the Beltway, far too expensive for most young people to live there and work a job for no pay. This pretty much prohibits most prospective staffers from ever getting the experience needed to begin a career on the Hill.

Who is able to take advantage of these opportunities? The independently wealthy.

That’s one thing that Conservatives have managed to address brilliantly, while Progressives have lagged behind. Conservatives have created scholarships, institutions, fellowships, dorms, etc. for their young talent to make sure they have the opportunities to start a government career. We Progressives barely have anything that serves that purpose.

Two things need to happen:

1. Congress should offer more paid internships. First, it’s not very fair to capitalize on someone’s work without paying them. Second, everyone will be better off by enabling the Hill staff to become more diverse.
2. Progressives need to start building the infrastructure that supports the movement’s young talent. Young Progressives are a lot less likely to begin a career in the public sector than their Conservative counterparts since the institutional support is just not there.

What do you think should be done to solve this problem? Leave your thoughts in the comments.

Monday on Future Majority I wrote about some of the next steps the youth movement should take now that the election has passed. One of those steps is to work to bring government and campaigns into the 21st century. While the buzzword for this vision has been Government 2.0, I see it more as User-Generated Government.

The Obama transition appears to be moving in the right direction with the creation of change.gov, which allows visitors to submit their ideas about the direction our country should take. Though this is a step in the right direction, it is only that: a step.

I believe that technology’s role in the next generation of governance should increase transparency, allow for broader feedback, and make data easily accessible for user-generated mash-ups.

There have been some great examples of this idea at work, mostly in local communities. There was an article on Mashable earlier this week about the Apps for Democracy contest, which awards prizes to developers creating applications in this spirit from the District of Columbia’s Data Catalog.

These efforts have been taking place in the United Kingdom for some time now, with the Free Our Data and Show Us A Better Way campaigns.

I want to come back to the DC Data Catalog for a moment, because this is pretty much what I have in mind at the Federal level. The data is easily available in a searchable database in a variety of formats, making it a perfect source for creators of mash-ups or just interested parties that want to view current data. While at the Federal level each department could have their own data catalog, I think there should be a centralized usdata.gov that provides all of the data in a single location. The site should also highlight and share the best mash-ups and applications created from the data.

The internet has been instrumental in decreasing informational assymmetry, and such an effort by the government to open up their data and make it accessible would further that equality.

Moving towards a User-Generated Government will bring more people into the process as participants, as well as allow the cognitive surplus of the American public to address our challenges in new ways. Often the solutions to problems come after looking at them in a completely different light, and opening up the data lets Americans with varied expertises and perspectives take a crack at them.

What are your thoughts about a User-Generated Government? Share them in the comments.

The Center for Economic and Policy Research released their new report, Unions and Upward Mobility for Young Workers, showing that unionization increases the wages earned by young workers.

Young workers are the most affected by the flat wage growth over the past few decades, resulting in lower inflation-adjusted income than previous generations despite higher qualifications and educational attainment.

The study found that young workers who are unionized earn 12.4% more in wages, approximately $1.75 per hour, than those young workers that are not in unions. Unionized young workers are 17% more likely to have employer-based health care and 24% more likely to have a pension plan.

The difference between union and non-union young workers is most dramatic in low-income occupations, with unionized workers being 27% more likely to have employer-based health care and 26% more likely to have a pension plan.

The study points out that one of the factors resulting in low inflation-adjusted wages is the steep drop in unionization over the last few decades. Unionization is extremely beneficial in allowing workers to bargain collectively for fair wages and benefits, and young workers that are unable to unionize suffer compared to those who can and do.

The labor movement is extremely important to the well-being of young workers, and further right-wing success in crippling organized labor would be devastating.

I went through the full text of the failed Emergency Economic Stabilization Act of 2008, AKA the Bailout Bill, and here is my overview.

The program that would be created by this bill is called the Troubled Assets Relief Program, or TARP. The program would purchase “troubled assets” from financial institutions. A trouble asset is defined as any mortgage or other financial instrument whose purchase would promote market stability. It’s a pretty broad definition.

An institution is not allowed to sell an asset to the Treasury for a price greater than what it paid for it in order to prevent companies from profiting from the program.

The Secretary of the Treasury is required to establish a program to insure troubled assets of financial institutions. This appears to be one of the compromises that provides an alternative to purchasing assets.

The Secretary is supposed to take into consideration the interests of the taxpayers, providing stability to financial markets and the banking system to protect jobs and retirement security, the need to keep families in their homes, providing assistance to all institutions regardless of size in order to protect smaller institutions and those that serve low and middle-income Americans.

The bill would create the Financial Stability Oversight Board which reviews the implementation of the bill.

Throughout the bill there are a number of clauses that require frequent reporting of progress at all levels of the program.

Any profits from the sale of troubled assets are required to be put toward paying down the national debt.

If the Secretary needs to hire contractors those contractors should be minority and woman-owned business to the maximum extent possible.

The Secretary is required to develop a program to help prevent future foreclosures by encouraging mortgage companies to modify their loans, as well as using loan guarantees and credit enhancement.

In terms of golden parachute compensation, any institution whose assets are bought directly by the Treasury may not provide them. If assets were bought at an auction, golden parachute payments face a 20% tax and prevent payments of above $500,000 from being lessened by tax deductions.

The Secretary is encouraged to reach out to other countries to implement their own versions of the act.

The Secretary would encourage private institutions to purchase troubled assets.

Passing the bill would authorize $700 billion to purchase troubled assets, but only $250 billion would be available immediately. The President would have to send a certification to Congress to increase the amount to $350 billion, and then once again send a certification to increase the amount to $700 billion. If the President requests the $700 billion amount, Congress has 15 days to pass a Joint Resolution of Disapproval if they do not want the increase. If that Resolution passes, the maximum amount remains $350 billion. It is important to not that these numbers refer to the maximum dollar amount of troubled assets the Treasury is allowed to hold at one time.

The Comptroller General of the United States is required to monitor the program and present reports to Congress. The Comptroller is also required to initiate a study on the role that leveraging and deleveraging by financial institutions played in the current crisis. Leveraging is the practice of taking on excessive debt in order to initiate growth, and deleveraging occurs when a company attempts to pay off its existing debt due to slower than expected growth.

The act calls for judicial review of the Secretary of the Treasury and TARP in order to make sure that all actions are within the law.

The authority of the act is set to expire on December 31, 2009, though Congress is able to extend the effective date to no later than two years from the date of passage, which is effectively just short of an additional year.

The act calls for the creation of a Special Inspector General for TARP who is appointed by the President and confirmed by the Senate. The Special Inspector audits and investigates the actions of the Secretary of the Treasury in carrying out the act.

The act would amend the United States code to raise the limit on public debt to $11,350,000,000,000. Yup, over 11 trillion dollars.

The act amends the National Housing Act, also known as  Hope for Homeowner, by increasing the eligibility of the act to help prevent foreclosures.

A Congressional Oversight Panel would be created consisting of 5 members. The Majority and Minority Leaders of the House and Senate each appoint 1 member. The fifth member is jointly appointed by the Speaker of the House and the Senate Majority Leader after consulting with the minority leaders. The five members would be outside experts. The panel can hold hearings and take sworn testimony on the state of the markets and the actions taken by TARP.

The Federal Deposit Insurance Act would be amended to included stronger provisions penalizing against institutions that falsely claim to be covered by FDIC insurance.

Federal financial regulatory institutions would be required to cooperate with the FBI.

The Financial Services Regulatory Relief Act of 2006 would take effect immediately. It is currently not set to take effect until October of 2011. The summary I read indicates that the act allows the Federal Reserve to pay interest on its reserves.

The Security and Exchange Commission would be authorized to suspend mark-to-market accounting. Mark-to-market accounting is the practice that Enron used to cook their books. Essentially the concept is that you have a futures contract that doesn’t mature for another 10 months, so you don’t know what the actual value is going to be. If you marked the contract to market, you would value it at the day’s market price. Companies have used this to come up with arbitrary valuations in order to balance their accounts. The bill would also call for a study on mark-to-market accounting and how it impacts the quality of financial information.

In 5 years the President is required to submit a proposal to Congress that recovers from the financial industry any losses taken by taxpayers.

That’s my summary of what the bill does. Unfortunately there isn’t really a way to sum it all up in a paragraph or two. If you have any questions I’ll do my best to answer them for you. Leave them in the comments.

Earlier today the Bailout Bill was defeated in the House, falling short of the 218 votes necessary for passage. Despite the fact that a majority of Democrats voted for the bill and a majority of Republicans voted against it, the GOP, especially Rep. Eric Cantor, are blaming Nancy Pelosi and the Democrats for the failure.

The Republican claim is that Nancy Pelosi delivered a “hyperpartisan floor speech” that led some of their members to switch their votes to no. Of course, it doesn’t say much about your commitment to solving a problem when you don’t vote for what your supposedly believe is the solution because you didn’t like what someone said.

Rep. Barney Frank railed on the GOP for this excuse:

“Well if that stopped people from voting, then shame on them,” he said. “If people’s feelings were hurt because of a speech and that led them to vote differently than what they thought the national interest (requires), then they really don’t belong here. They’re not tough enough.”

Here is the part of Pelosi’s speech that led the GOP to put feelings first instead of country:

“They claim to be free market advocates when it’s really an anything-goes mentality: No regulation, no supervision, no discipline. And if you fail, you will have a golden parachute and the taxpayer will bail you out. Those days are over. The party is over,” Pelosi said.

“Democrats believe in a free market,” she said. “But in this case, in its unbridled form, as encouraged, supported, by the Republicans — some in the Republican Party, not all — it has created not jobs, not capital. It has created chaos.”

There are a lot of political undercurrents at play here that have resulted in today’s failure.

A lot of Republicans are afraid of taking the political risk in supporting the bill:

“We’re all worried about losing our jobs,” Rep. Paul Ryan, R-Wis., declared in an impassioned speech in support of the bill before the vote. “Most of us say, ‘I want this thing to pass, but I want you to vote for it — not me.’ “

This bill provides some Republicans the opportunity to oppose President Bush in an attempt to separate themselves from his unpopularity.

Another political undercurrent involves inter-GOP politics. Rep. Eric Cantor has been posturing himself to challenge Rep. Boehner’s leadership in the election for Minority Leader.

The Republicans do not want this to be a bipartisan measure. For this to truly be bipartisan, both sides would need to provide a similar percentage of votes for passage. What the Republicans want to do is pass the bailout, but do it with the least amount of Republican votes possible. This way, if there is political fallout from the bill, the Republicans can blame the Democrats for it. If both sides vote in approximately equal percentages both parties would have to own the consequences of the bill.

McCain aides are now trying to turn this against Barack Obama, saying that this failure happened because Obama only “phoned it in.” Unfortunately for McCain, it was the Republican side that failed to deliver the votes. If McCain was so concerned about this bill passing, shouldn’t he have spent time convincing the four Republican members of Congress from his home state of Arizona that all voted against the bill?

I am starting to get really annoyed about the way the Republicans are playing this Twittergate thing. The Democrats are not trying to keep those tech-savvy Republicans (which is actually just Culberson) from using internet tools for constituent communication. The problem is that you have a 230-year old institution with members that aren’t much younger than that.

Both Democrats and Republicans should be working together to update the Franking rules for Congress. Unfortunately, the Republicans have managed to create a dream world where they are the great advocates and defenders of internet technology and the Democrats are a Stalinist regime set to restrict freedom of speach. (Yes, a Republican actually used the term Stalinist in this debate). It is amusing to me that the party of Howard Dean and Barack Obama is the great enemy of the internet, which much be defended by a party whose Presidential nominee just learned what an internet was last week.

If the Republicans are such great defenders of the internet I am sure they will all be switching their positions to support net neutrality.

So here is the point: both parties need to work together to update these rules. Republicans are only making it harder by trying to make a rule change look like a victory against the anti-internet Democrats. If Republicans actually gave a damn they would have sought a bi-partisan solution to this instead of trying to score some gotcha political points that could only be believed in W’s Situation Room.

Sean Morrison of Forward Montana talks about the impact of America’s health care crisis on young people.

Both Senators John McCain and Hillary Clinton have proposed a summer Gas Tax Holiday as a response to the dramatic increases in fuel prices across the country. Their plans call for the suspension of the federal tax of 18.4 cents on gas and 24.4 cents on diesel from Memorial Day to Labor Day. At first glance one might think “I would like to pay 18 cents less per gallon, that’s a good idea,” but if you glance again you will see that it is a potential disaster.

First, the revenue from the federal gas and diesel taxes go towards the Highway Trust Fund, to ensure a “dependable source of financing for the National System of Interstate and Defense Highways and also as the source of funding for the remainder of the Federal-aid Highway Program.” This is the fund that is used to build, maintain, and repair roads and highways, the importance of which reflected by the tragic collapse of the I-35 bridge in Minnesota last August.

While that calculated average savings for a single commuter during the gas tax holiday ranges from $23 to $28, the holiday could cost the government 9 billion dollars and more than 300,000 jobs. And according to the American Society of Civil Engineers, “every dollar invested in highway infrastructure generates $5.40 in economic benefits through reduced delays, improved safety and lower vehicle operating costs.” (Wired) Is it worth getting a $28 dollar savings if it means more than 300,000 will be left unemployed by it?

Guess what, the savings probably won’t even be that high. The real winners will be the oil companies, which will be able to raise prices to match the increased demand. One economist calculated an actual “9- to 12-cent reduction in the cost of a gallon of gas to the consumer, with the remainder of the reduction coming in wholesale prices.”

Hillary Clinton counters the Highway Trust Fund issue by saying that she would make up the lost revenue with a windfall profits tax. Even so, this is a waste of 9 billion dollars in revenue that could be used to actually address the energy independence issue, but would instead just amount to what equates to at best a $28 stimulus check.

Instead of campaign-year snake oil remedies we should be looking at a real long-term energy strategy. Investing in the next generation of renewable energy technologies while building green infrastructure and green-collar jobs is the solution we should be seeking, not policies that will actually contribute to the climate crisis.