Deweyp

How Bailouts Are Messing with Capitalism

This is without a doubt the best analysis of the genesis of the problem. Far too many authors and bloggers on the internet tend to display bias one way or another for their feelings about the visual problem (tip of the ice burg) rather trying to understand why we are where we are. We as a country need to focus on our manufacturing sector or we will end up selling our soul to those countries that do.


On Mar 29 09:49 AM Miken wrote:

> With regard to the auto companies, I believe that everyone is overlooking
> the fundamental issues. I don't think there is any doubt that the
> current Wall Street fiasco has damaged the ability of the American
> based, and even foreign based companies to survive. But even before
> the Wall Street mismanagement, the American companies were in a state
> of decline. The central question should be why the American companies?
>
>
> I don't think the simplistic answer is management or unions. I believe
> the simple answer is a view of the people running the country, and
> those on both coasts that a healthy manufacturing sector is passe
> and not important. The reasons I have drawn that conclusion are
> the following:
>
> 1. There is no articulated industrial policy. What do we think a
> manufacturing base should look like? What are the policies that
> should shape our industrial policy? Have we developed the infra
> structure to support our vision? There apparently is no appetite
> in Washington, or anywhere else in the country to have a dialogue
> on this.
>
> There certainly is in countries that are emerging as the new manufacturing
> base in the world order. In countries such as China, Mexico, South
> Korea, Japan, Thailand, etc. there is a very clear priority given
> to the manufacturing sector because they recognize the economic value
> stream connected with making things.
>
> 2. More fundamentally, is a manufacturing base important? Or should
> the country try to exist on retailers, services, and shuffling other
> people's money around (Wall Street)? I don't think so. See the
> value stream discussion in item 1.
>
> 3. What is our energy policy? The beginning of the current crisis
> for the American based auto companies was the sudden spike in gasoline
> prices because we have continued to let ourselves vulnerable to foreign
> despots and royal families whims to control energy prices. At $1.50
> per gallon, customer preferences are significantly different than
> at $4.50 per gallon. Were the American companies asleep at the wheel,
> or were they better at building larger cars and trucks than the foreign
> companies? Were they callous or were they giving the customers what
> they wanted? The evidence suggests the latter. Toyota, Honda, Nissan,
> BMW etc. all where trying desperately to break into the truck market
> without much success.
>
> When our foreign dependence allowed a drastic change in energy costs,
> not only were the American companies caught off guard, but others,
> especially Toyota was closing plants delaying start ups, etc.
>
> I don't care if prices are high or low, the auto companies can exist
> in either scenario. When Washington decides to address this, it
> will help them develop better strategies. After all, most of the
> American companies have world wide operations that were doing just
> fine making small economical cars using a variety of fuels from CNG
> to ethanol.
>
> Too long for a post, sorry, but I don't buy the simplistic answers
> to the question, "what's wrong with Ameican companies?".

TARP: Bailout or Money Pit?

Good article Chris, but the real unknown is how much farther down would these guys be without TARP. We have some very smart people working on the economic problem and I believe most have only the best intentions. It is always easy to throw stones at the moon. How many have actually managed to hit it? Only those that had what it takes. Before we condemn, let's be sure we have what it takes to do so accurately.

Preview from Europe: Stocks Go Cliff Diving Again

CNBC... Too Too Funny. I guess there is a point when your plane is plunging at 500 mph toward earth with no power, that it is just plain crazy to try to be positive about things.

Five Things That Could Resuscitate the Markets

Sorry to disagree with YOU. First of all, Gm and the other American Auto makers HAVE been reducing costs and the UAW has agreed to reduce wages and improve work rules. Second, You may not have noticed but Gm outsold every other auto maker in the latest numbers out. How does that translate to "cars no one wants to buy"? Get your facts straight, then remove your Anti American Auto bias before trying to jam your negativity down others throats.


On Mar 06 03:12 AM H2KOLOB wrote:

> Sorry to disagree, but:
>
> GM: A full bailout of GM will leave it the same uncompetitive, bloated
> company it is with union contracts and legacy costs it can't afford,
> and cars no one wants to buy. letting them go bankrupt and restructure
> would be much more positive to the sentiment in the investor community.
> finally, the argument that Bankruptcy is not an option because no
> one would buy their cars is nonsense. is there a car buyer in America
> today that doesn't already see them as bankrupt. an actual bankrupcy,
> with a government financed restructuring that allows GM to become
> competitive would give car buyers much more confidence that the company
> will still be around over the three year life of their car's warranty.
>
>
> BANKS: Until all of the shoes have dropped, commercial RE, Credit
> cards, continued falling housing prices, corporate loans... we will
> not have any clarity on who if anyone will survive.
>
> STIMULOUS PLAN: the inept excuses for stimulous plans we are seeing
> is clearly causing the market to go down, not up.
>
> GOOD NEWS: the fact that the few retail buyers left in Amerca are
> shopping at Amazon to avoid sales taxes does not give me confidence,
> while the majority of brick and mortar retailers are dropping all
> around us.
>
> MARKET BOTTOM: yes some analysts are now saying we have hit bottom.
> about the same number who have said this each month for the past
> 18 months.
>
> I'll go ahead and sty in cash for now.
>