About Looks like Bailouts are the "in" thing Page 4
|December 7th, 2008||#31|
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I don't necessary disagree, but yet I am haunted by Herbert Hoover disastrous mistake of 1929.
For those of you not familiar of what I'm talking about, during the late 1920s there was a severe economist crisis in the USA, it essentially started with the financial institutions, and when asked for aid by the banks President Herbert Hoover made the decision NOT to intercede and result of his inaction which then spread throughout the economy was the Great Depression.
We sit on the edge of a economic chasm, we are already in a recession and the news is bleak for the forseeable future. Do we really want to repeat Hoover's mistake and do nothing???
Does the auto industry deserve bankruptcy? YES. It has been so badly mismanaged for the past 30 years, they deserve to fail. Let the Japanese and Germans sell cars in America if Detroit is too old, slow and stupid to stay competitive. I have never forgiven them for axing the EV1 10 years ago, so let the Japanese profit when the first Japanese EVs arrive here next year and sales go gangbusters. Hell most Japanese cars sold in America are made in America, so what difference does it make? Whether they are Japanese or American, Do you think most people care where the car was designed? US Consumers want a dependable car cheap, and the Big 3 have been making expesive junk for the past 2 decades.
However I fear letting Detroit fail would do even greater damage to the country at large as its such a key component to our economy.
"My center is giving way, my right is in retreat situation excellent. I shall attack." -Foch
I am from NYC. I fly a French flag because I work in Paris.
|December 8th, 2008||#32|
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Yet this recession we're experiencing, according to an article on CNN, is only slightly worse than average and of the 8 recessions since the Great Depression, according to the same CNN article that I am struggling to find right now but will keep looking for, this one is only the fourth worst based on statistics including unemployment, job losses (yes, the two are apparently separate), foreclosures and a couple other criteria that I can not recall off the top of my head. Sorry for the lack of detail, I remember watching this on CNN two weeks ago but for the life of me can't even remember if it was Wolf Blitzer or Lou Dobbs. Detroit is not the economic machine it was 30 years ago when Chrysler was bailed out, it no longer makes up such a large part of our GDP and with the Big 3's sails tanking in recent years it is obvious something is fundamentally wrong with their business models and new blood is needed. I would be more open to the idea of bailing out Detroit if the CEO's, CFO's, and Board of Directors for these companies included their resignations with their plans for what to do with the money. I don't see any Lee Iacoca's at the Big 3 right now, and having the money is one thing but knowing what to do with it is a totally different beast, I don't trust the current leadership at GM, Ford or Chrysler. Let the companies re-organize under bankcruptcy, Kmart did it in only a few short years and emerged so strong they were able to buy out Sears.
Please note that 98% of what I say is my opinion and/or my "version" of the facts. Most of what I say is rumor with little to no evidence to back it up, just something I picked up somewhere.
|December 8th, 2008||#33|
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I don't understand why the CEOs and other appropriate persons are not fired or imprisoned. After all, if most people cause damage, they have to pay for it or face time behind bars or both.
|December 8th, 2008||#34|
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I'm confused as to why $700 billion for the banks is okay, but 1/20th of that sum for the auto industry, the only blue collar industry left in this country, is a no-go.
The conservatives are against it purely because they see this as a chance to squash the unions. If the unions go down in a re-structuring of the Auto industry, look for wages to drop to minimum, healthcare benefits to disappear, and bonuses/overtime wages to decrease.
I'm the bleeding heart liberal your mother warned you about.
|December 9th, 2008||#36|
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Lessee. Major advantages of the Japanese companies include government healthcare, a wish to sell 10 little cars instead of 3 big ones, superior design departments (or at least one that redesigns when new regulations begin instead of whining about it) and combide that with the collapse of the US economy, THAT caused the Auto Industry to collapse. Not the Unions.
Why should the faults of the few hurt the many?
|December 9th, 2008||#37|
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Now we come to today where we have had run away government spending and a nasty national debt. We cannot act like FDR did and spend our way out of the Great Depression. In 1932, the government budget was about 8% of the GDP. Last year the GDP was 13.8 trillion. The national budget was 2.8 trillion. Lets tack on that wonderful $800 billion bail out (with $100 billion in squealing pork, bribes in my opinion) another $100 billion for other the AIG bailout. That gives us a budget of $3.7 trillion or 26.8% of the USA's GDP. We all accept that the GDP is going to shrink next year but the President Elect is pushing for an auto bailout, a huge public works project to put 2.5 million people back to work, the Dems are talking about another stimulus package, and a majority of US governors want a bailout too...
...when does it stop? We cannot continue to spend like this. I watched democrats on MSNBC declare that we should spend like there is no tomorrow in the short term regardless of the long term effects. Our budget is too bloated. A little over 50% of our budget is entitements and that will grow with the new administration. There is going to come a point where inflation is going to kick in.
Lastly, I heard an interesting fact again on MSNBC. Toyota's prius, the most successful hybrid car on the market, is sold at a loss to Toyota. Meaning it is not profitable. Congress is frothing at the mouth to make Detroit green.
I don't have the answers, but I believe it is time to draw a line in the sand and say enough is enough. I was never for the $600 stimulus, the AIG bailout, the pork ridden $800 billion bailout and I am not for the proposed one. Sometimes it takes a little short term pain to get long term progress. Now more than ever I agree with Libertarians.
Sorry for the disorganized ramble, it is how things came out
to add to the idea of why the auto industry failed...cheap credit. For the last 20 years credit was available to all. People spent like there was no tomorrow; borrowing for cars, getting credit cards, taking out 2nd home mortgages and such. A society could not maintain that debt without recourse. That is my 2 cents (not on my credit card may I add).
"The best form of taking care of troops is first-class training, for this saves unnecessary casualties." Erwin Rommel
Last edited by Duty Honor Country; December 9th, 2008 at 04:00..
|December 9th, 2008||#38|
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The thing is, the FDR government who spent its way out of the Depression actually worked. And FDR did it by spending on infrustructure projects such has HOOVER Dam, the widening of the Mississippi, highway project etc.
The reason why it worked is because these projects created thousands of new jobs for the construction project. The Construction Industry is a key economic lynch-pin, if it does well then so does the rest of the economy.
Obama's plan is a exact duplication of FDR, create new jobs in construction, (he his planning on 2.8 new jobs) AND it will fix America's crumbling infrustucture which NEEDS to be done anyway (less we want anymore bridge collapses) to boot.
I think its a brilliant idea, kills two birds with a single stone.
|December 9th, 2008||#39|
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But now even they're taking losses, which brings me to my reasoning as to why the Big Three cannot fail; it would cause a mass collapse in the World Auto industry. Opel (owned by GM) and Ford are the two biggest imports into Europe. The only domestic marque in Australia, Holden, is owned by GM. The loss of these companies would send shockwaves to the survivors as well, as consumers would not trust the remaining corporations (what good does your 10-year warranty on your Hyundai do if the company, seemingly doing okay now, fails next year?) and buy even fewer cars than they are already. During the Great Depression, over 500 Automakers in the US alone closed their doors for good. Soon nothing but Chinese cars could be left. This could be the collapse that makes China a world superpower, if one of the State Industry marqes rises up to take the place of the Then-Defunct American Big Three.
|December 9th, 2008||#40|
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mod edit: pictures like these are ok in discussion as long as you add some of your thoughts to contribute to the discussion. Please do so in the future.
If we continue to "bail out" companies this is what we're going to have left.
Last edited by 5.56X45mm; December 10th, 2008 at 07:03..