ZenLunatic

If it comforts people out there, I do think there is help coming to the auto industry. As much as I am against it, it most likely will happen. Given the track record and what has been said, it seems very likely. It seems likely that the government helping more industries in trouble. We are still reacting to fear instead of sound thought and principles. I dont think it will take too long when the people of America realize the mistakes we made and are making when things really fall apart much worse than now.

We are on a fast track to socialism. Maybe a revolution will occur in our future to recover our freedoms. I know I will be up for it.

If you want to see some truly terrified faces, come and hang out here in Detroit. The line workers, the engineers, the secretaries, everyone is scared. Not only that, but the service industry people are just as worried. Everyone is walking on eggshells.

 

There's also the fact that if these companies go bankrupt you can forget about Detroit ever becoming a vibrant city. It'll make the 1980s look like Disneyland.

They have great reason to be. Even with blank check bailouts, there is gonna be huge layoffs and consolidating. There is a fate of Detriot that is no stopping now. There is always hope that we can rebuild. It must first fall so we can rebuild. GM stocks below $3, lowest since the early years of going public. So... we invest $50billion+ in companies not worth a fraction of that?

I agree with a lot of what you are saying. As I've said, the worst thing that can happen in capitalism is when companies believe (rightly or wrongly, mind you) that they are too big to fail. And I don't think the auto industry is the same as the banks.

 

I didn't mean to suggest that the government should step in and run the auto industry -- just that a "bailout" for the auto industry doesn't have to be a quick injection of $25BN with nothing else. There are options between the two extremes (nothing vs. a blank check). One of the reasons that I voted for Obama is that I think he will be smart and careful about what he considers. There is a dangerous precedent here. But there is also opportunity here. Netiher extreme and neither ideology is the answer.

If there was an option between the 2 that makes sense I would consider it, but none is out there. It seems to be money first, then lets see what we can do. Then it could be too late. You cant throw money into something without a good plan. Look at AIG. I dont believe we do nothing, but nothing is better than a blank check or what is out there now. Doing nothing is the best option at this point.

I voted for Obama too. I think when it comes to world views including wars and also the environment, he is great. When it comes to the economy, I think he's more of the same. He's no different than what any other politican worried about politics instead of the future of our country. He's really only looking ahead maybe a year or two with his plans and ideas.

I'll freely admit that I know almost nothing about how the US auto industry works, but aren't the unions just as much to blame?

Thats a big component too that can be fixed through total restructuring.

Thank you.

11:11 is a special time.

ZL - I bolded the text above that I'd like to focus on. No one can predict what the ripple effect would have been, and to say in a throwaway line that it would be "horribe" misses the point. I will say it again: EVERYTHING in this country is funded with debt. Absolutely everything. From companies funding payroll with short term financing, to every car ever purchased, to every college tuition, to supermarkets stocking their shelves by pledging inventory as collateral. If credit dried up, "horrible" wouldnt even begin to describe what the fallout would have been. It doesn't take a conspiracy theorist to come up with almost unthinkable images of what this country would look like with banks failing and credit disappearing and insurance companies (like AIG) failing. Are you prepared to stand in line to buy food because your supermarket can't stock it's shelves any more? Think about it how wide ranging the fallout would be. Everything -- EVERYTHING -- in this country is debt financed. It's not preferrable but it's reality. We simply could not have weathered the storm without doing anything.

 

Government's responsibility is to protect the people. By acting, I think that we are now "lucky enough" to be forced to suffer through a bad recession or depression with unemployment rates skyrocketing. If the government did nothing, we will never know what would have happened, but your arguments are aided tremendously by this. It bears repeating that even a Republican administration knew that it had no choice and acted. Hank Paulson is Goldman Sachs-bred. Do you think he was raised on corporate welfare ideology? There was no choice here. It had to be done.

The bold is what is the problem with America. My point is we cant keep living on debt. Its not the way an economy can continue to function. My point is that what you say will happen regardless. Deal with it now or make it alot worse by spending more money. I am prepared to deal with anything that the depression brings because its the way it has to be to get better. We need this massive correction to happen. Why keep propping up this fake economy based on bad business models? We're trying to fix something with old fashioned thinking that got us into this situation.

America is like someone that just maxed out their credit limit on their card. The foreigners are the lenders and we are asking them for an increase on credit limit. This has been going on for along time now and things arent changing except the credit we ask for keeps getting bigger. What happens when the lenders cut us off? It will happen. Then we print ourselves into massive inflation and destroy the dollar. Thats alot worse than what can happen in a bad recession.

Not about doing nothing, but doing the right thing. Save and produce is the solution. Spending and consuming is the problem.

ZenL - I am arguing with you over in the election thread. I can't argue with you in two places.

 

EDIT: Also, everything that I am reading suggests that Chrysler will go under. And I will take a stab at arguing here too: there's no reason why the government couldn't provide a bailout while insisting on certain changes. Either requiring Ford and GM to merge, or replace leadership, or mandate changes in products, etc. We can argue another time about whether we want the government to do things like that (or even if they'd be any good at it), but it's not like the government has to write a check and sit on the sidelines while the companies continue to run themselves into the ground.

 

EDIT2: it would be easier for the govt to let Chrysler go under (politically) because it's a private company...

Lets move the auto industry bailout talk here, cause I think it's a more specific topic.

I think as citizens, we should be know how the govt is spending our money and as of now, we have nothing more than us bailing them out. I'm not hearing anything from the govt about plans of retool or restructuring. All I'm hearing is that we need to inject them with $25- $50 billion fast. Where are the conditions?? And I dont feel its the job of the govt to run a car company and thats what we need. A good business man to restructure the business and industry. Let the market take care of that.

I think GM is in the most time sensitive struggle so they will probably the first to go.

In short, it's going to suck big-time for everyone ... but I don't think government money is going to prevent the collapse of the industry, so I can't say I favor any kind of taxpayer-funded "rescue" plan.

That's pretty much it. It's a waste of money to prop up these bad companies.

What people need to see is that its not the end of the US auto industry but the end of the Big 3 which was run very poorly. Its the restructuring of the US auto industry. New business models and leader that work and make money. Dont you want an efficient US car company that can compete with the foreign names?

I am concerned about the hundreds of thousand of people employeed by the big 3. Not sure in what capacity we should help but it seems unfair to bail out Fannie, Freddie, AIG and not the car industry. Either all or nothing right?

The question to you is where do you draw the line? What is all? What is about the credit card, airline, and other companies? Who deserves how much and where will the money come from?

And I never was into saving the banks.

More arguements on this issue:

So they are destined for failure. Should we help them out? And if we do, in what capacity?

You gotta take that these three companies employee a huge amount themselves and also support the a big part of our manufacturing industry to boot. Failure in these companies do mean a gigantic change. The problem is they are out of money and without more, they will die soon. It makes sense we do something, but what is that something.

Lets start off with American cars suck. After my first GM car, my second being a Honda, I never bought another US car again. The image and reputation is out there that US cars are far behind in quality from foreign cars. This isnt something you can change easily especially not with a govt bailout. It will take a major overhaul and much tested time to gain back some trust. So much so, I think its better to completely start a new company. Let's let these failed business models die and the leaders of the companies to suffer their fate of bad business. This should open the door for new business leaders to learn from their mistakes and make a workable company. There will be suffering during the failure and rebuilding, but it is survivable. If we use any money on the auto industry, it should be to help people through this process and help facilitate it.

What we can't do is throw billions at the auto industry and say fix yourself and hope that they change. At the very least, I think some heads should roll from the top of these companies. Maybe new leadership can do it, but I'd like to know major changes are taking place if we put money into them.

Chicago burb company I work for is hiring engineers and manager type positions also DB admin.

The darker the berry, the sweeter the juice.

I hear you Norbs. My mini-rant was directed more at ZenLunatic since he's often complaining about the bailout. I understand your point about the auto industry -- you don't want to reward perpetual failures. At the same time, it's a similar argument that was made about the banks -- they got themselves into this mess by being shortsighted and risky. I agree. The problem is that we've now got a situation where this country is so dependent on the banks that we couldn't let them fail. I dont know much about the auto industry, but Edie's opinion strikes me as pretty much right on the money.

 

Like I said, I don't have any answers. But I am confident that Obama can approach the situation sensibly and carefully. There is a real moral hazard problem here (ie, you never want a business in a capitalism-based economy thinking/knowing its too big to fail -- that's when they take outsized risks), not to mention, Zen's fair point about inflation. I just think that the Ron Pauls of the world (and ZenLunatics of the world) can call for no more bailouts because it's the sexy thing to do. It's also just not based in reality.

 

Also, ZenLunatic, while I have (and continue to) grant your point about the problems this may cause for the dollar, I still think that, in the end, the dollar has no reasonable competitor. The dollar is the world's currency. China is not going to start investing in the yen or the euro. Can that change? Sure. That's why we need to be careful. But we are not near that event yet. And if the economy collapses because we don't "bailout" the banks, as you suggest, there ain't gonna be anyone interested in buying dollars then either.

Okay, to get back to this. I understand your fears of what will happen if these giant business fail. There will be big consequences but you start to manage that instead of fixing failed business models because there is too much corruption and culture that is sometimes unfixable. Sometimes you gotta break things down completely to start from a sound foundation. The markets are still there. Someone will pick up the pieces of these failed business and create better models and start business that work and profit. Our efforts should be to facilitate rebuilding sound models. I understand the ripple effect the non-bailouts would mean, its gonna be really horrible, but it is what is needed because propping up this fake horrible economy will just lead to a worse crash in the future. The idea that there are companies to big too fail is wrong, it should never be. Thats what needs correcting. We will survive, it will be tough but be worth it when we have a free country and economy. Go back to the Constitution.

China just announced nearly $600 billion in stimulis for mainly infrastructure. This is China investing in themselves and trying to create more domestic demand while building their country. This is China's way of starting the trend of breaking away from depending on our economy and becoming more self-reliant. This is one of the countries we as Americans rely on for financing our stimulis and bailout programs. Instead of giving us money they are growing themselves. Watch them propel themselves past us. Watch as other countries learn from them.

Then where will we get our money from? Printing Press????? That's the first sure sign we are doomed.

I dont have the answers either, but this is what I see. Sorry for the bad outlook but until I see the government acting better, this is what I see.

NO MORE STIMILUS OR BAILOUTS!!!

Obama's position is pretty clear that he will continue crazy government spending. He wants another stimulis and also a bailout for the auto industry. You think Bush got us in trouble with spending. Get ready for bigger government debt. The question is how much will the rest of the world lend us and where will all the rest of the money come from???? How can we pay them back??

How can we solve the problem of spending with more spending? Where is the plan to start saving and producing????

I remember job hunting and it sucked every bit as you are saying. Especially with this economy, jobs hunting will not get any easier. The processs does suck but thats what is out there. You have to put your name and application out there as much as you can. Go through all the painstaking processes. It is a numbers game. Dont give up. Good luck.

Blastin' AC/DC - Back In Black for Obama

We're gonna turn the US Map BLUE this year. Just like in 64.

My biggest beef with Obama is that he is a White Sox fan. How tragic is that? My only comfort is that he is not much into baseball anyways.

We did.

YAY for us!!! We WIN!!!

So who won?

DOW back up to 9000. The volatility is just nuts. You have to be a total professional/gambler if you're gonna trade in this market. There is so much yet to be unravelled, I dont think you can predict anything at this point. 2009 will be incredibly interesting.

Obama will be the known as the president of the next depression.

Rocks

Toys in the Attic

Live Bootleg

 

Are my favorite Aerosmith albims

Yes, also check out Gems, and the Classics Live 1 and 2.

What does full release mean to you?

people who have more money than they can ever spend are making money on this current collapse. Its not about money its about power.

I think most people who have tons of money are down bigtime right now because everything is down bigtime. People are making money in the short-term through fluctuations, but thats all just money circulating. If you dont have money in the markets or have a mortgage, you have the most to gain here because you can get in at very low prices now and probably even better soon to come. Plus, you didnt lose any money. The big money lost at this point is in housing and stock market.

Power is about money in this case, so how can it be not about money?

October 22, 2008

A Missed Opportunity

by John Browne

Most Americans have come to accept the simple truth that we have eroded our national wealth by consuming far more than we produce. With this understanding taking hold, and with the severity of the financial crisis spreading, government has an opportunity to radically change course to put the nation on a different economic path. But rather than making a meaningful turn, all our politicians can do is put their foot on the accelerator.

We have been told repeatedly by our leaders that consumer spending is the life force of our economy. With our industrial base all but gone, personal consumption now accounts for 72 percent of GDP. As a result, politicians simply won