Transition

President-Elect Obama has moved with deliberate speed to put together his cabinet and other key advisors and President Bush is seeing to it that he is kept current on everything of importance that he will inherit. So far his appointments seem to be near the political center as opposedto the radical left of the Democrat Party. Still, he's going to bear watching as many of his campaign promises run contrary to what is the likely center-right position of the country.

The Economy

Most experts now say we are "technically" in a recession. From my viewpoint, we've been in a recession for at least a year. A few of those so-called "experts" are forecasting a turnaround by year-end 2010. Meanwhile, bright spots are just about impossible to find. Christmas shopping sales are way down as is almost every other business activity. Having experienced the Great Depression, the current situation makes me mindful of those times. If we don't do things right to turn the current situation around, we could easily slip into a depression.

Current focus is on the Big3 auto companies. In its infinite wisdom, the government will try to bail them out which I am absolutely opposed to. It won't make our lives any easier but I favor Chapter 11 for all three of them. That would give them the opportunity to wipe the slate clean and begin anew. They could proceed without having to kowtow to the United Auto Workers Union at whose feet much of the industry problem lies. The rest of the problem lies in lousy management. The court could lay down some strict rules among which should be a sharp curtailment in executive compensation and a moratorium on any attempts to unionize the workforce. Should the UAW be allowed to seek representation (and there are many who believe they shouldn't) at some point in the future, the "card check" system should be disallowed in favor of voter privacy and any election must be supervised by objective overseers.

Big3 executives bemoan the fact that several million jobs would be affected, not just the autoworkers; suppliers of parts and dealers and their employees would be impacted as well.

If restructuring of the Big3 is done properly with deliberate speed and in close cooperation with their suppliers and dealers, any adverse impact should not last long. Suppliers and dealers should use the restructuring period before operations recommence to look at there own structure and operations for improvement.

Executive Compensation

Executives in all major corporations need to take note of the Big3 situation. They need to do lots of soul searching about their own companies, their dealings with trade unions and what they agree to, and their own compensation levels and benefits. As I have noted in previous posts, not only is the absolute level of their compensation excessive in many cases, the gap between what they make and what the average hourly worker in their companies makes continues to increase beyond reason. Shareholders should keep the feet of the executives to the fire.