Bail Out Capitalism, Not Detroit 51 comments
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Government intervention in the financial system via the Troubled Asset Relief Program made me sick to my stomach, but without it, there is a real possibility that our economy would have come to a screeching halt as trust in the financial system was strained to the point of breaking. Confidence among depositors and banks alike needed to be restored.
The putative bailout of Detroit’s “Big Three” automakers is quite different from TARP, as it will only postpone the inevitable. No matter how much money you throw at them, the Big Three, or at least General Motors (GM), will most likely still go bankrupt. They have managed to lose billions in good times and bad times.
Their business models were broken before the financial crisis hit; the crisis just accelerated the inevitable. The only questions are how soon and how much of the taxpayer’s money they’ll consume before they face their fate, since they have structural problems that will not be resolved until they go bankrupt.
In the 1980s, when the Big Three had virtually no competition, they sold their souls to the devil unions, signing contracts that put them at an incredible competitive disadvantage in today’s environment where consumers don’t have to buy American and have plenty of choices.Unfortunately, these companies are run for and by the unions that have very different objectives than for-profit enterprises. These contracts, for instance, forced GM to run factories at 80% utilization, whether there was adequate demand or not. This, in turn, forced GM to sell cars to car rental companies at cost, killing future demand for its cars as it was only a matter of months before these cars made their way into the used car market.
It is hard to judge the true quality of their management as their unions made management’s job impossible. But management is at fault of being stuck in the past and producing gas guzzlers (SUVs and trucks) when consumers clearly demanded fuel efficient vehicles. To its discredit, GM spends half as much on research and development as does Toyota and for three times as many nameplates. This is not a sustainable business model.
Bankruptcy is a blessing, not a curse. Contrary to common perception, bankruptcy doesn’t mean that the Big Three will disappear. Not at all, and quite the opposite. It will insure that they’ll be around 50 years from now. While in bankruptcy, they will be able to break contracts with unions that are choking them, lower their debt burdens by turning debt holders into equity holders (and regrettably wiping out existing shareholders). Their hands will be untied to right-size by shrinking their operations, cutting costs and becoming competitive again.
Jobs will be lost, factories will be closed, benefits cut. Yes, all these things will take place, but the layers of fat that these companies accumulated over the decades need to be shed to confront the marketplace that is only getting more competitive. Today, the Big Three compete mostly with Japanese and European automakers. But competition will only intensify as the world flattens, the quality of Korean cars improves (in many cases, it already has), and Chinese and Indian cars come to the U.S. and the rest of the developed world.
An automaker bailout is simply bad for capitalism. It will put competitors at an unfair disadvantage. It will cost taxpayers money, which at some point will lead to higher interest rates and higher taxes. It will lower economic growth, and it will send an army of other failing companies lobbying to Washington asking the taxpayers to bail them out (though this will likely happen anyway). Finally, and most importantly, it will raise the likelihood of a Japanese-like 15-year recession. We’ll be repeating their mistakes by not letting failed companies go bankrupt and thereby creating an economy full of zombie-like, semi-dead companies.
Capitalism is what needs a bailout. Though we often don’t appreciate it, capitalism is what made this country great. It allows for the fit to succeed by allowing the unfit to fail. Let’s bail capitalism out by letting the Big Three face their fates and not allowing them to become leeches on the backs of the U.S. taxpayer and our economy.
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This article has 51 comments:
In a perfect world of Capitalism only the strong survive and business takes care of itself. But those are not the ground rules we have been playing under. The government has controlled and mismanaged the credit markets with the introduction of the Community Reinvestment Act and followed it up with deregulating and miss managing Fannie Mae and Freddie Mac to the point that our credit system almost collapsed.
Add to that the deregulation of the futures market that allowed oil to hit $147.00 per barrel and started a consumer driver recession. It is the governments fault, they caused the problem and they should stand good to fix it. Gm has been in a restructure program for the last several years that should reach a majority of it’s goals by 2010. I’m talking about moving the legacy cost of the retirees to the UAW, which with other cuts and changes would drastically improve Gm’s underlying cost
per vehicle. Some say that GM built gas guzzler SUV’s and trucks that the public didn’t want, but that was untrue, an out right lie. They were built due to demand for such vehicles, look at your local Toyota lot and see the number of full size V-8 trucks and SUV’s. Toyota saw the demand and was trying to tap into that large market. It was $4.00 a gallon gas that killed it in less than a month and no company can change
production over in less than 6 months and retool especially with the availability of loans gone. The government subsidized these large vehicles with large tax credits for business owners and drove the demand even higher. Another government mess up. We pay more to other countries in the form of aid to help with our security. Those opposed to helping out our manufacturing base survive the mess ups of the government should ask themselves who will build the tanks and planes the next time we need them. It makes me sick to my stomach to see supposedly grown men and women play these political games and argue over the fate of millions of worker’s future when they caused the problem to begin with. It’s time for our elected officials to get off their, he said she said, politically driven backsides, accept the responsibility that they know is their’s and fix this short term problem.
BTW, I could use a bail out for myself, say $5,000,000 would do it.
Economics always wins. Always. True capitalism (in the Austrian School of Economics sense) is not being practised and hasn't been for a long, long time (even before the crash of '29 it wasn't being practised). Yup, socialistic policies and fiat currency have been massive problems for us and they go back a long ways, even to help create the crash of '29. We were printing money back then (even though we said we were on the gold standard - we printed more money than was actually backed by our gold). We tried bailouts. They didn't work. We recovered despite the government actions, not because of them. Things are much different today... worse.
The only "bailout" capitalism needs is a reversion back to true capitalism by getting rid of socialistic policies and the fiat currency (and Federal Reserve). The present system is not capitalism and it is bankrupting America and Americans.
Walk away from your responsibilities - not up to them. It's the American way. Say your sorry and stick someone else with the bill. Nice.
On Nov 21 02:54 PM mitchm wrote:
> To those who oppose to Auto Industry Bail out;
>
>
> In a perfect world of Capitalism only the strong survive and business
> takes care of itself. But those are not the ground rules we have
> been playing under. The government has controlled and mismanaged
> the credit markets with the introduction of the Community Reinvestment
> Act and followed it up with deregulating and miss managing Fannie
> Mae and Freddie Mac to the point that our credit system almost collapsed.
>
> Add to that the deregulation of the futures market that allowed oil
> to hit $147.00 per barrel and started a consumer driver recession.
> It is the governments fault, they caused the problem and they should
> stand good to fix it. Gm has been in a restructure program for the
> last several years that should reach a majority of it’s goals by
> 2010. I’m talking about moving the legacy cost of the retirees to
> the UAW, which with other cuts and changes would drastically improve
> Gm’s underlying cost
> per vehicle. Some say that GM built gas guzzler SUV’s and trucks
> that the public didn’t want, but that was untrue, an out right lie.
> They were built due to demand for such vehicles, look at your local
> Toyota lot and see the number of full size V-8 trucks and SUV’s.
> Toyota saw the demand and was trying to tap into that large market.
> It was $4.00 a gallon gas that killed it in less than a month and
> no company can change
> production over in less than 6 months and retool especially with
> the availability of loans gone. The government subsidized these large
> vehicles with large tax credits for business owners and drove the
> demand even higher. Another government mess up. We pay more to other
> countries in the form of aid to help with our security. Those opposed
> to helping out our manufacturing base survive the mess ups of the
> government should ask themselves who will build the tanks and planes
> the next time we need them. It makes me sick to my stomach to see
> supposedly grown men and women play these political games and argue
> over the fate of millions of worker’s future when they caused the
> problem to begin with. It’s time for our elected officials to get
> off their, he said she said, politically driven backsides, accept
> the responsibility that they know is their’s and fix this short term
> problem.
Since the "Fed" creates money out of thin air just like the Treasury would, what exactly are these massive and increasing debt payments buying us?
Support the home team and stop bashing them with 20 year old data.
On Nov 21 02:54 PM mitchm wrote:
> To those who oppose to Auto Industry Bail out;
>
>
> In a perfect world of Capitalism only the strong survive and business
> takes care of itself. But those are not the ground rules we have
> been playing under. The government has controlled and mismanaged
> the credit markets with the introduction of the Community Reinvestment
> Act and followed it up with deregulating and miss managing Fannie
> Mae and Freddie Mac to the point that our credit system almost collapsed.
>
> Add to that the deregulation of the futures market that allowed oil
> to hit $147.00 per barrel and started a consumer driver recession.
> It is the governments fault, they caused the problem and they should
> stand good to fix it. Gm has been in a restructure program for the
> last several years that should reach a majority of it’s goals by
> 2010. I’m talking about moving the legacy cost of the retirees to
> the UAW, which with other cuts and changes would drastically improve
> Gm’s underlying cost
> per vehicle. Some say that GM built gas guzzler SUV’s and trucks
> that the public didn’t want, but that was untrue, an out right lie.
> They were built due to demand for such vehicles, look at your local
> Toyota lot and see the number of full size V-8 trucks and SUV’s.
> Toyota saw the demand and was trying to tap into that large market.
> It was $4.00 a gallon gas that killed it in less than a month and
> no company can change
> production over in less than 6 months and retool especially with
> the availability of loans gone. The government subsidized these large
> vehicles with large tax credits for business owners and drove the
> demand even higher. Another government mess up. We pay more to
> other countries in the form of aid to help with our security. Those
> opposed to helping out our manufacturing base survive the mess ups
> of the government should ask themselves who will build the tanks
> and planes the next time we need them. It makes me sick to my stomach
> to see supposedly grown men and women play these political games
> and argue over the fate of millions of worker’s future when they
> caused the problem to begin with. It’s time for our elected officials
> to get off their, he said she said, politically driven backsides,
> accept the responsibility that they know is their’s and fix this
> short term problem.
On Nov 21 03:17 PM sheople wrote:
> I agree with Robert Nabloid. The question now is "What free country"?
> This is not the free country I grew up in. The Federal Reserve in
> conjunction with the U.S. Treasurer & Wall Street has done enough
> damage to our country. It needs to end.
On Nov 21 04:14 PM JSL15 wrote:
> I'd say that article's pretty right on. The problem with GM is they
> don't make a very good product. How many of you defending them actually
> own or plan on buying one of their vehicles now? Hummer anybody?
> Sure that's a practical vehicle. Who could have possibly forseen
> that a FINITE resource that is the most traded commodity in the world
> would become expensive? The real shame of course is that the worker
> suffers because of terrible management. The best thing that could
> happen would be for GM's factories, assets and workers to be taken
> over by a company that can design vehicles that people actually want
> or better yet NEED. You have to think ahead in the auto industry
> to stay alive.
The evility has been done for last 500 years by the US Governemnt and the corporations alike whether it is unethical wars or slavery or colonism or mistreating people unfairly or promoting pornography or keeping profit above people's rights..
Remember,the largest profits GM and Ford and many hotel industry get are not from a creative product design but from pornography.
Constitutionally the federal government is tasked with very few things, chiefly national security. It is acceptable and prudent for it to do others, when they are beneficial across the board...such as highways and bridges, food & drug safety, etc. They have zero business giving entitlements or subsidizing businesses!!
Our tax code is rife with fraud and abuse. It's high time we abolish the income tax and the property tax, and fund the government solely with consumptive taxes. THAT gives control back to the people over their OWN money...and we can then decide if and when to buy discretionary items, or when not to, to deny funding to the government.
fairtax.org
That, along with a Balance Budget Amendment, are needed post-haste!!!
GM and Ford unfairly enjoyed 100years producing junk cars . Their creative spirit is zero and so is their enterpreneurship. It wil be better if they quit making cars altogether. Why reward sick and inefficient companies. It is like continously allowing a drunk , intoxicated and a bad surgeon operate on your stomach.
My Toyota, now with 210K problem free miles, was built in Indiana. THAT is why Toyota is being chosen over the crap cars and trucks the Big 3 put out.
My heart goes out to the actual workers who bust their butts each day to make a living. However, the blame points directly at the management of these companies who have driven each one straight into the ground with failed vision and mismanagement to the highest degree. Greed, incompetence, failure, and avoidance.
Management at the Big 3 made (and did not make) the choices that were needed, and they couldn't even pull profits in boom times. Enough said.
Screw the taxpayer 'bailout', it's a cop-out and the Big 3 must fail on their own accord. Capitalism says so.
You stated that, "But management is at fault of being stuck in the past and producing gas guzzlers (SUVs and trucks) when consumers clearly demanded fuel efficient vehicles".
Really? Thats why there are so many "city" trucks, SUVs, and hummers on the street? Because consumers were clearly demanding fuel efficient vehicles? Really?
Further, you statee that Unions have a strangle hold on the big three. Really? Have you been to Detroit lately? You should tell that to anyone in the union. Wheres the outcry that CEOs are paid crazy money? Oh no, its mostly the union's fault.
Oh, but hey its ok to underwrite the financial industry because there is nothing to fix there! Yeah, there is no way the financial industry is going to sodomize the U.S. taxpayer again is there? Last time I checked it was the financial assholes that got us into this mess or wait maybe it was the big three. Yeah, the big three colluded with the oil companies and the mortgage companies so that no one would buy their cars anymore.
Really,
You can always spot somebody who knows nothing about the industry or the business when they use the Hummer as if it were the most important GM vehicle. Hummer fills a niche, a very expensive & profitable niche, but was never more than a way to sell very high priced versions of GM's high volume SUVs. Low cost & high profit is typically a good combination.
I would stay away from Professor Katsenelson's business classes. The truck market sells high volumes (+1MM per platform) of high priced(40K+ per vehicle) vehicles and the GM/Ford/Chrysler brand name is still very strong. The small car market is lower volume(+100K per platform) and much lower priced(<20K per vehicle) and the Toyota/Honda brand name is much stronger than the US brands. Additionally, the $2K/vehicle penalty the US 3 pay for pension and healthcare can't be covered by the margin on a sub-20K price.
Why would the US 3 invest more heavily in a market where they get a much smaller return? For the 3 months when gas goes above $4/gallon? I am really tired of this moronic argument.
On Nov 21 04:14 PM JSL15 wrote:
> I'd say that article's pretty right on. The problem with GM is they
> don't make a very good product. How many of you defending them actually
> own or plan on buying one of their vehicles now? Hummer anybody?
> Sure that's a practical vehicle. Who could have possibly forseen
> that a FINITE resource that is the most traded commodity in the world
> would become expensive? The real shame of course is that the worker
> suffers because of terrible management. The best thing that could
> happen would be for GM's factories, assets and workers to be taken
> over by a company that can design vehicles that people actually want
> or better yet NEED. You have to think ahead in the auto industry
> to stay alive.
The car makers need to make it on their own, if they can't someone will replace them.
Same with the financials. What is disturbing now is everyone wants to buy a bank to qualify for the money and another angle coming is after they get the money and decide to put themselves up for sale, the 25 billion or so will go with the sale which also could be a company in another country.
If a institution takes the bail out money, then puts itself on the "for sale" list the bail out money should go back to the treasury, whether it is a domestic or foreign company that buys them.
Anyone that can buy out a Citi Bank, Wachovia, etc. shouldn't need any federal dollars. Any that can afford to buy a bank to qualify for the bail out money shouldn't need or get it either.
The UAW as well as management can blame themselves for their shortsightedness. I certainly do not want to prop up UAW members' pensions and health plans. Like the rest of us, they should be responsible for themselves.
If they can't work it out, screw 'em!
Bring in someone like Warren Buffett/Berkshire to oversee, analyze and design a business plan for the future....
Buffett brings instant credibility, knowledge and, most importantly, objectivity. No other party is objective....all have their interest at stake.
Only in Cp 11 does GM have the legal authority to reject contracts: UAW, Dealers, Suppliers, Retirement packages etc etc
This will allow time for a slow re-adjustment, normal attrition of the workforce, worker re-training, etc etc....
The total process may take 3/5 years....GM will come out a much stronger, streamlined company for the future
But you need someone like Buffett to have credibilty with the public that they are not just throwing good money after bad.
Ass! Look in a mirror. This article is right on the money., Capitalism is at stake. GM F'ed up, and you want us to pay for Wagoners corporate jet fleet? Idle factories, and forced benefits? I get no such deal. IF my business acted like I was GOD in my market I am sure I would eventually face the same fate. Bankrupt is what they are, face it. Why else would they be asking for hand outs. IF we do bailout, it should be at the cost of ALL of the management team. Replace every last one of the bastards that got that company this deep in the hole.
Following your Philosophy, we should then bailout the private jet companies, because hey, who is going to fly them separately, to the same destination from the same originating city? My God, perhaps another 25Billion to the JET manufacturers as well!
On Nov 21 03:01 PM mitchm wrote:
> Competitors at an unfair advantage, are you kidding? You're worried
> more about foriegn auto makers than the workers in the US. That
> statement alone speaks volumes as to where your spin is coming from.
> As if imports with cheap labor haven't hurt the domestics. What
> an ass.
All of the banks in this country are insolvent as well as the US government. Between the two, they owe more money than any other institution on the planet. What should Capitalism do with all of those deadbeats???
I think you’re right. The real smart Capitalist thing to do is to exact a hefty dose of retribution against those uppity over paid auto workers. Yeah, Capitalism should fire ‘em all and steal their pensions and healthcare benefits. That’s what’ll keep this country great!!!
Starting cost for GM= $3400.00
The 3400 is for ludicrous pensions and full tilt health care. No other company in the WORLD offers nor can sustain that unless they were guaranteed a monopoly on the market. In the 80's GM had pretty close to that with 68% of the market. Today, they have less then 20%.
You do the math. If the unions had been upfront and fair as the market share declined and negotiated in the interests of keeping people employed,, by scaling back on those wins linearly to what the market share was, you would see a much more robust GM today.
Hmmm, you do the math.
On Nov 22 10:12 AM cz wrote:
> Hey Vita,
> All of the banks in this country are insolvent as well as the US
> government. Between the two, they owe more money than any other institution
> on the planet. What should Capitalism do with all of those deadbeats???
>
> I think you’re right. The real smart Capitalist thing to do is to
> exact a hefty dose of retribution against those uppity over paid
> auto workers. Yeah, Capitalism should fire ‘em all and steal their
> pensions and healthcare benefits. That’s what’ll keep this country
> great!!!
most notably, because the market is demanding it, people are buying them, they are not buying 1MM of trucks anymore. They are scared of the inevitable return to 4 buck gas. GO to any dealer and buy a lease returned Tahoe, Yukon etc and get it with low mileage for about 20 cents on the dollar.
Get real . . . or stay in that wonderful truck business, hey why not build corporate jets too!
On Nov 21 06:58 PM car_guy wrote:
> GM has 2 cars in Car & Driver's top 10, Ford has 1 and Toyota
> has NONE. Honda's brand new Fit gets worse gas mileage than the Chevy
> Aveo & the Chevy Cobalt, which has a more powerful engine. Consumer
> Reports new paper on Auto quality states that Ford's quality is equivalent
> to the "good' Japanese companies (Toyota & Honda) and many of
> GM's vehicles are as good or better, including their mid-size Chevy
> Malibu.
>
> You can always spot somebody who knows nothing about the industry
> or the business when they use the Hummer as if it were the most important
> GM vehicle. Hummer fills a niche, a very expensive & profitable
> niche, but was never more than a way to sell very high priced versions
> of GM's high volume SUVs. Low cost & high profit is typically
> a good combination.
>
> I would stay away from Professor Katsenelson's business classes.
> The truck market sells high volumes (+1MM per platform) of high priced(40K+
> per vehicle) vehicles and the GM/Ford/Chrysler brand name is still
> very strong. The small car market is lower volume(+100K per platform)
> and much lower priced(<20K per vehicle) and the Toyota/Honda brand
> name is much stronger than the US brands. Additionally, the $2K/vehicle
> penalty the US 3 pay for pension and healthcare can't be covered
> by the margin on a sub-20K price.
>
> Why would the US 3 invest more heavily in a market where they get
> a much smaller return? For the 3 months when gas goes above $4/gallon?
> I am really tired of this moronic argument.
There it is. Article 1 section 8;
"The Congress shall have power ...To borrow money on the credit of the United States; To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;"
To regulate commerce. Ah ha! The tires are real low on that one. Like riding on the rims?
Congress must be asleep at the wheel not to hear the sound of steel scraping asphalt.
What me worry? Look on the bright side. As long as the car can stay on the road (any road) we still have Apple products, and Pamela Anderson designing buildings in Dubai. Can't be all bad...
There are many ways to accomplish this and the unions can either be in the forefront of designing this or they can wait for a judge to nullify the contracts. Possibilities: workers work only when they are needed, shave management levels; hours pools where rather than cut jobs each person works fewer hours so as many as possible stay employed.
You can whine all you want but the rest of the world is hungry and not listening.
On Nov 21 03:15 PM mitchm wrote:
> Let's crucify out of jealousy the poor american auto worker for making
> a decent wage. We need our manual labor folks to understand they
> should be working for $10.00 an hour and shame on GM for having given
> American workers a decent living wage for 100 years. The same workers
> who take that money and drive this great economy of ours by buying
> homes and TV's and sending their kids to college. Let's pull them
> back to the third world standards they deserve for such low brow
> work. This company is looking for a loan, no handouts, to be paid
> back with interest, because the gov'nment has killed the credit makets
> and the economy for the next 6 to 12 months. You are so worried
> about the tax payers, we give more cash to third world dictatorships
> with no payback for purely political reasons. Give them the loan
> and get out of the way and they will be fine. Arm chair quarter
> backs with an ax to grind, you ake my backside hurt.
The contracts are negotiated every 3 to 4 years, so all agreements are made with, at least, 3 to 4 years foresight.
And, if your inference that GM was very profitable in the 1980’s is correct, where is the money that was set aside for the pension and healthcare funds??? It’s invested in one half of their business…over seas... that’s the “realistic” view. It’s not an “over paid” union problem, it’s a ‘where’s the money hidden’ problem (read ‘union busting methods’).
And, what exactly is this animosity towards the UAW all about??? In a capitalist, free trading society, why are so many people siding with the communist notion that a laborer is not free to negotiate a deal with his employer??? And, why do so many third parties feel the need to interfere with those negotiations???
How many of Congress’s trillions of dollars in spending over the last 8 years did today’s vocal taxpayers influence??? And, you’re pissing and moaning over this stuff…a stinkin’ auto loan??? It’s merely right wing ‘hate the minorities’ (UAW was the first union to organize black laborers) politics.
And, in a free trading capitalist society, it is acceptable for businesses to apply for loans. And, since all of the banks refuse to loan money to anyone, the Treasury is the default lender of last resort…like in 1929.
We will go into a Depression followed by a third World War when countries begin defaulting on their financial obligations with other countries… like in the 1930’s through the 1940’s. So, why rush that shit by forcing 10 million people out of work over night??? Just look at who is in favor of this scenario… that’s right, the angry, heartless Republicans.
Keep in mind, GM is merely applying for a loan from the only lender with sufficient resources. This circus atmosphere around this mundane business practice is all political. It’s a neo-con last harah to break the union.
Union busting is a well known tenet of the Republican Party and since they still ‘own’ the government and the courts, they are pushing very hard to destroy the lives of millions of working class people before 1-20-09… because the unions “redistribute” wealth more equitably.
Another tenet of the Republican Party is to have an exclusive service economy where everyone earns $7.00/hour. Exterminating the UAW will deal a major blow to any kind of capitalist, free trade negotiating between laborers and employers. The boss will always dictate the terms of employment…like in communist China. Is that what we want this country to look like…??? It’s been getting closer and closer to that over the past 8 years!!! I hope the Democrats are smart enough to avoid that 1929 scenario.
And, what should Capitalism do with all of those deadbeats banks???
On Nov 22 10:41 AM Big Fat Chester wrote:
> Not steal, but reset to realistic value. Those contracts agreed to
> in the 80's were in effect the robbery that put GM in the dire position
> it is in. Example, Toyota, Honda and GM today go to start the build
> of a car. Starting cost for Toyota and Honda = $0000.00
> Starting cost for GM= $3400.00
>
> The 3400 is for ludicrous pensions and full tilt health care. No
> other company in the WORLD offers nor can sustain that unless they
> were guaranteed a monopoly on the market. In the 80's GM had pretty
> close to that with 68% of the market. Today, they have less then
> 20%.
>
> You do the math. If the unions had been upfront and fair as the market
> share declined and negotiated in the interests of keeping people
> employed,, by scaling back on those wins linearly to what the market
> share was, you would see a much more robust GM today.
>
> Hmmm, you do the math.
God and economics?
40,000 children starve to death everyday in the world and your God only steps in to punish?
Nice.
On Nov 21 05:33 PM vs7578 wrote:
> I sincerely believe that God is now punishing USA and corporations
> .
> The evility has been done for last 500 years by the US Governemnt
> and the corporations alike whether it is unethical wars or slavery
> or colonism or mistreating people unfairly or promoting pornography
> or keeping profit above people's rights..
> Remember,the largest profits GM and Ford and many hotel industry
> get are not from a creative product design but from pornography.
First of all the wages start about $14.00 and go to $27.00 /hr.
Honda's starting wage is $18.41 an hour.
The difference are Health and Retirement costs in the amount roughly $44.00
That cost covers two (2) workers - the present worker and the pensions and healthcare costs for the thousands of retirees on their books.
Hence the wages are much at par between GM & Honda & Toyota. It is the Pensions and Health care that the Japanese automaker does not have, because the Japanese government pays for those costs.
In that respect the Japanese are subsidizing their Autoworker.
Perhaps if we ever have a National Health Care System, the Automakers can have room to breath for true competition.
The solution is difficult. Again it is easy for the ignorant to repeat the media or blogger that GM et. should go into Chapter 11 without taking into consideration the huge costs and time. Lehman little unit in England will take 1 year at $10 million dollars a day. Delphi has been in Chapter 11 four years, and its not even close the size of GM, let alone all 3 automakers. Section 346 of Debtor financing will require billions of dollars. - a reason 2000 companies this year have chosen Chap 7 because its is impossible to get Debtor financing in this credit environment. GM et. option to go into Chap 11 would require government subsidy.
To show the difficulty GM et. failure would have on the supply line,
Honda spokesman Jeffrey Smith said Honda supports government aid to the big 3 because it would maintain the stability and viability of the auto industry as a whole.
The quickest fix, at this moment without giving deeper thought, would be to place an excise tax on foreign auto's - in the same amount as Health & Retirement costs are of the American Automaker.
A point to remember, irregardless which foreign company operates in the USA,
the profits are either returned to its country of origin or invested in US Treasuries. None aids the Trade deficit which increases the National Debt. So you & I loose any which way you care to slice it. Who else is there to pay the debt ?
First of all the wages start about $14.00 and go to $27.00 /hr.
Honda's starting wage is $18.41 an hour.
The difference are Health and Retirement costs in the amount roughly $44.00
That cost covers two (2) workers - the present worker and the pensions and healthcare costs for the thousands of retirees on their books.
Hence the wages are much at par between GM & Honda & Toyota. It is the Pensions and Health care that the Japanese automaker does not have, because the Japanese government pays for those costs.
In that respect the Japanese are subsidizing their Autoworker.
Perhaps if we ever have a National Health Care System, the Automakers can have room to breath for true competition.
The solution is difficult. Again it is easy for the ignorant to repeat the media or blogger that GM et. should go into Chapter 11 without taking into consideration the huge costs and time. Lehman little unit in England will take 1 year at $10 million dollars a day. Delphi has been in Chapter 11 four years, and its not even close the size of GM, let alone all 3 automakers. Section 346 of Debtor financing will require billions of dollars. - a reason 2000 companies this year have chosen Chap 7 because its is impossible to get Debtor financing in this credit environment. GM et. option to go into Chap 11 would require government subsidy.
To show the difficulty GM et. failure would have on the supply line,
Honda spokesman Jeffrey Smith said Honda supports government aid to the big 3 because it would maintain the stability and viability of the auto industry as a whole.
The quickest fix, at this moment without giving deeper thought, would be to place an excise tax on foreign auto's - in the same amount as Health & Retirement costs are of the American Automaker.
A point to remember, irregardless which foreign company operates in the USA,
the profits are either returned to its country of origin or invested in US Treasuries. None aids the Trade deficit which increases the National Debt. So you & I loose any which way you care to slice it. Who else is there to pay the debt ?
while gasoline prices continue to climb they kept building there big cars, suv and jeeps. While Honda and Toyota switch to Hybid cars and better
smaller cars. Far as I am concern let the big three go under and start fresh
get rid of the unions reduce cost and build a better dam car.
Michael
Well said!!!
On Nov 23 05:30 AM ddavid wrote:
> It must be easy to babble on; How much intelligence does it take
> to take the word of the media or blog site speaking wages of the
> big-3 autoworker
>
> First of all the wages start about $14.00 and go to $27.00 /hr.<br/>Honda's
> starting wage is $18.41 an hour.
>
> The difference are Health and Retirement costs in the amount roughly
> $44.00
> That cost covers two (2) workers - the present worker and the pensions
> and healthcare costs for the thousands of retirees on their books.
>
>
> Hence the wages are much at par between GM & Honda & Toyota.
> It is the Pensions and Health care that the Japanese automaker does
> not have, because the Japanese government pays for those costs.<br/>
>
> In that respect the Japanese are subsidizing their Autoworker.<br/>...
> if we ever have a National Health Care System, the Automakers can
> have room to breath for true competition.
>
> The solution is difficult. Again it is easy for the ignorant to repeat
> the media or blogger that GM et. should go into Chapter 11 without
> taking into consideration the huge costs and time. Lehman little
> unit in England will take 1 year at $10 million dollars a day. Delphi
> has been in Chapter 11 four years, and its not even close the size
> of GM, let alone all 3 automakers. Section 346 of Debtor financing
> will require billions of dollars. - a reason 2000 companies this
> year have chosen Chap 7 because its is impossible to get Debtor financing
> in this credit environment. GM et. option to go into Chap 11 would
> require government subsidy.
>
> To show the difficulty GM et. failure would have on the supply line,
>
> Honda spokesman Jeffrey Smith said Honda supports government aid
> to the big 3 because it would maintain the stability and viability
> of the auto industry as a whole.
>
> The quickest fix, at this moment without giving deeper thought, would
> be to place an excise tax on foreign auto's - in the same amount
> as Health & Retirement costs are of the American Automaker.<br/>
>
> A point to remember, irregardless which foreign company operates
> in the USA,
> the profits are either returned to its country of origin or invested
> in US Treasuries. None aids the Trade deficit which increases the
> National Debt. So you & I loose any which way you care to slice
> it. Who else is there to pay the debt ?
>
>
Why abolish the income tax and property tax?
1) Unjustness -- the government is staking a preemptive claim on your income, which is an assumption that they have more right to your earnings than you do. Property taxes are likewise unjust because one can no longer fully pay for a home and own it outright -- the bill keeps coming after the mortgage is paid off! Neither of these taxes fit with the concept of "property rights" that the Founders or others who have believed in Liberty held and still hold.
2) Impotence toward its goal -- we continue to add to the tax code as we recognize more and more situations worthy of a break -- a credit or exemption. It's an attempt to fine-tune the amount of taxation for one's individual circumstances. The problem is that the government cannot possibly account for every possible circumstance and variable in life!! The only way that the goal of being truly "progressive", in regards to taxation, is logically workable, is to stop taxing us on the front end, and instead tax us on the back end, when we do discretionary spending!! That is the point at which we have decided we can afford to spend, and therefore can afford to be taxed on that portion of our finances.
3) Massive complexity -- as a result of the attempts to fine-tune the tax code, it has become an unwieldy behemoth, that instead of becoming more progressive, has instead become rife with fraud and abuse. The very size and complexity of the code allows the super-wealthy to take advantage of loopholes and tax shelters, and offers room for political dealing. Taxation needs to be dramatically simplified.
We, the People, need to stop being "satisfied" with the concept of a tax cut -- which really means that "they" deign to give us back some small portion of what is *ours* to begin with!! And instead, take back *pre-emptive* ownership of *our* earnings...and control over *when* and *if* we get taxed on them!! I.e., with a consumptive tax, *you* decide when you get taxed...when you decide whether or not to purchase!! Don't like the new government spending? The people can decide to exert control by going on a discretionary spending freeze. Control back to the people!!
fairtax.org
On Nov 21 04:34 PM eternitus wrote:
> Here, here. Time to stop wasting money propping up broken industries
> and start stimulating what works and will provide some return on
> investment... Tax cut and infrastructure spending plan!
On Nov 21 03:04 PM Robert Nabloid wrote:
> Since when does capitalism need a bailout? Oh yes, since it has been
> manipulated and turned into something else that we continue to call
> capitalism despite the dictionary definition being much different
> than our present reality.
>
> Economics always wins. Always. True capitalism (in the Austrian School
> of Economics sense) is not being practised and hasn't been for a
> long, long time (even before the crash of '29 it wasn't being practised).
> Yup, socialistic policies and fiat currency have been massive problems
> for us and they go back a long ways, even to help create the crash
> of '29. We were printing money back then (even though we said we
> were on the gold standard - we printed more money than was actually
> backed by our gold). We tried bailouts. They didn't work. We recovered
> despite the government actions, not because of them. Things are much
> different today... worse.
>
> The only "bailout" capitalism needs is a reversion back to true capitalism
> by getting rid of socialistic policies and the fiat currency (and
> Federal Reserve). The present system is not capitalism and it is
> bankrupting America and Americans.
STOP BLAMING CAPITALISM!!! Capitalism is the only good economic system. The problem is that the greedy bankers have been allowed to control the underlying currency and of course they have made a Ponzi scheme of it.
Only a fool blames on capitalism that which is really the fault of unsound fiat currency and fractional reserve banking policy.
ABOLISH THE FED just like Ron Paul has been telling us FOR YEARS! Maybe people will stop laughing at him now that he is proven to be absolutely correct about everything.