JohnL

The Economy, And Why It's Taking So Long to Fix It

--There have been half a dozen government programs to stem foreclosures and help stabilize the housing market. But too much help would falsely subsidize prices once again, and prolong the problem.--

So a little help only prolongs the problem a little?

--For the most part, bubbles need to work themselves out.--

For the most part? You mean we should try to keep them a little inflated?

I'm struggling to follow this line of thinking.

Let GM Fail

And pulling those bailout dollars out of the pockets of other businesses and households could launch some other string of dominoes with equally disastrous effects. This money isn't growing on some tree - it's coming from other, viable members of our economy. There is no free lunch. Just people trying to steal each other's lunch.


On Nov 18 02:22 AM User 263844 wrote:

> If GM failed, it would cause a domino effect unseen in America since
> the 1930's.

Let GM Fail

You should be clear on one thing: most of us who oppose a bailout for the auto industry are just as upset about the bailouts for the banks. We are against ALL bailouts and other distortions of the free market. These distortions (tarriffs, bailouts, govt. guarantees, subsidies, tax breaks, quotas, artificial interest rates, etc.) are what got this economy so messed up in the first place. It's looking like Frankenstein's monster.

And by the way, "greed" is just a pejorative for "the pursuit of profits" - which I believe is the motivator for both the capitalist and the union worker alike.


On Nov 17 11:14 PM eisenhowergal wrote:

> It's obvious that the reason we see the GOP so adamant about letting
> GM fail..as opposed to the financial institutions (not to mention
> the bonuses the CEOs get for completely ruining their companies)
> is that the autoworkers are unionized and the financial workers (unfortunately
> for them) are not. The GOP would happily do anything to cause workers
> lose their union rights. If anything, this financial crisis brings
> even greater attention to the fact that we need unions in place to
> protect workers' rights..now more than ever! The Greed is Good crowd
> will never let up..so we can't, either!

Let GM Fail

For all of the GM fans going on proudly about their market share and vehicle quality: it is apparently not enough or your management and union leaders would not be demanding a bail-out. Every company does some things well and some things not so well. On balance, you've got too many of the latter. Thus the $3 share price. This is not about the new Malibu or JDPowers metrics. It's about, on balance, building too many vehicles for the true market and not giving customers their money's worth. GM is one of the marginal producers in a shrinking market. A "bridge loan" won't change those facts.

Mr. West does a great job of pointing out how years of easy money and other distortions of the marketplace allowed it to go on. Now, there is no money left in the Treasury to keep the game going. Game over. Unfortunately for us all.


On Nov 17 04:45 PM AmericanVOR wrote:

> "I'll post this a thousand times if I have to!"

Why the U.S. Automakers Should Get a Bailout

If there was much chance of "repayment with interest" then there would be willing investors to lend that money. Unfortunately, everyone that was approached took a pass. So now Detroit turns their sights on forcing a "loan" out of the unwilling. Their "muscle" in D.C. stands ready to shake down the victims (taxpayers) for a $25B sub-prime loan. And wasn't it the making of bad loans that got us into this mess in the first place? When will people learn that we're not running a charity here? It's called an economy and it only works (i.e. innovates, generates profits, employs people) when resources are transferred from those that mess up to those that satisfy customer wants. It also helps if individual industries and the muscle in Washington keep their hands out of our wallets.


On Nov 17 12:54 AM DavidR wrote:

> Wow, the people I share oxygen with really dissapoint me. OK, lets
> allow the US auto industry to dissappear. LOL. Most of the 3.1 Million
> newly unemployed will have to let their houses go into forclosure.
> They won't have an income to buy new Honda's and Toyotas, so those
> two companys might as well go down the tubes as well. We're talking
> about a LOAN to the Automakers to bridge a recession. We're talking
> about repayment with interest. Trust me, the last thing you want
> is the government taking an ownership stake in the companies (can
> you remember British Leyland?) Just a loan. Shesh. Not like most
> of you people never took out a loan?

GM Bailout Would Be Agony for Taxpayers

Lazaris,

I totally agree that the UAW leadership had accomplices. Senior management was truly incompetent and the board and investors were asleep at the wheel to pay the execs for such poor performance. The three groups must share responsibility for this sorry state of affairs and all three should share in the consequences. The current shareholders should get zero. The senior executives should be fired. And the auto industry that emerges will not pay so much for executives or workers. The old model clearly was not viable.

But I am part of a fourth group: the nearly 300 million americans that never benefitted from, or had any say in, the industry's stupidity, yet are being told we will help the other three groups out of their jam. Believe me: I truly empathize with the financial pain about to be endured by many auto workers and retirees, but this country cannot be allowed to descend into a socialist hell where the competent have to constanty bail-out the incompetent. If we do that, you can kiss more than the Big 3 good-bye; you can do that to this entire country.


On Nov 16 04:33 PM Lazaris wrote:

>
> Hey John,
> Do you think that after the UAW takes over the retiree health care,
> the wages go down to $14.00, and some benefits are taken away, that
> the price of that vehicle will go down one dime? Do you really think
> that a penny of all that cost savings is going to be passed on to
> the consumer? Dream on, all that cost savings will just go to more
> CEO pay and bonuses to management and to shareholders.
> But you will sure be happy to see those autoworkers take that huge
> pay cut won't you?
>
> On Nov 16 02:18 PM JohnL wrote:

GM Bailout Would Be Agony for Taxpayers

Hey lazaris,

Let me get this straight: the UAW pushes up wages for their members, fights against right-to-work laws, wants a weaker dollar, tarriffs and other trade barriers to hinder the import of foreign cars. All resulting in higher costs for the cars that the rest of us Americans buy. And this has been going on for decades. Now, when the whole scam stops working, you want the rest of us to bail you out? And you have the nerve to claim that your union wages have somehow helped us all? Does believing that twisted logic help you sleep at night?

Thanks, but I can't afford any more of your help.

Why the U.S. Automakers Should Get a Bailout

The author states that, deserving or not, we must do what’s best for most of America. What's best for most Americans is to not have those billions ripped ruthlessly from their pockets. If you believe in free markets, you have to believe that those billions should be in the hands of competent businessmen making investments to build products that people will buy. The market seems to be saying that we don't need 20m new cars per year. Are we listening? Rather, somewhere there's the next Bill Gates, who won't get the capital he needs because it's being used to prop up the incompetents in Detroit. Allowing him to succeed is what used to be best for America.