Banks/Lenders and now the possibility of the auto-makers. AIG wamts more.
What do you think of the bail-outs and why.
Sue
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Banks/Lenders and now the possibility of the auto-makers. AIG wamts more.
What do you think of the bail-outs and why.
Sue
Probably necessary. Will probably cost much more than necessary. Will undoubtedly be completely forgotten by the time we get into this situation again.
j
Do I understand this correctly that you mean that the State helps companies economically and sometimes buys stocks in it and even takes over the companies in times of crisis?
If so I think it's good, or rather, necessary. I believe it's the only way the auto industry for instance in america can survive without canning most of the workers. The state helping out companies in times of crisis is one of its purposes i believe. It would cost the americans much more if the companies went bankrupt or lost significantly than if the state would help the companies to get on there feet again.
This is nothing uncommon, I dont know in america but I suppose the americans are more sceptical to these sort of things. Mainly because of the negative view americans have on the state and the almost laizze faire capitalist ideals that are present.
In Europe however there is another tradition that is not that hostile to these sorts of things. I guess it's due to the strong position of mainly socialdemocrats, both historically and now.
Nobody wants a financial crisis but when it comes it is better that the state takes some responsability, if they don't the consequences will be more devastating to the companies, the employees, the state, economy and the people in general.
Well, I'm all for getting return on investment, especially when it's done with tax-payers money. If (and that's a big IF) the bailout will not only be repaid, but possibly turn a profit, then yeah, I believe it's a good thing. If on the other hand the bailouts are done with public money for private gain (and not public gain), then I believe this is the largest and most blatant form of cronyism I've ever seen.
Only time will tell, I guess.:shrug:
Mark
I am flat-out against it. the whole "too big to fail" paradigm blurs the line between gov't and private sectors, and dangerously so. if a company sucks at doing business, they need to go out of business, period. i am a big free market advocate, and so i see this as the opposite of helpful.
if anyone loses their entire retirement, then it's their own fault for investing poorly. it's called diversification, and if you aren't already doing it, call your broker right this second and correct that mistake.
I'm in the same boat as Jockeys. If it was my company that was going under because of mismanagement, the government isn't going to come bail me out. Why should the big boys get special treatment? Anyone can see that their business model sucks. As my dad would say, sounds like a personal problem.
Again and again, they come to the brink of bankruptcy and act like it just happened. The foreign automakers have none of these problems, their vehicles are cheaper, and many of them ship (or used to) from their home country. If they can't sell American vehicles made in North America to Americans for profit without price gouging, something is obviously wrong. The Big 3 could all go down and this country would be just fine. All our cars would still run, there would still be inventory to be sold, and plenty of foreign cars to fill the gap where our fellow Americans didn't have the integrity to stand. Then, someone with a dream and a plan would come in and revive what used to be the American Spirit in the auto industry. I don't understand why everyone thinks life will suffer because these mega corporations with bad business plans go down.
Ironically, the downfall of the American auto-industry could have been prevented had they learned from communism. The industry had the idea that "bigger is better" and rode the horse until it dropped, and then until it died and then until it decomposed. Only then did the big 3 decide to go smaller, but it's too late without a big government bailout. As you can see, once a business gets too big, it loses flexibility and then bad things start happening.
Corporate welfare is bad policy. Always. As an advocate of ordered liberty the one thing that scares me more than the Almighty State is Big Business. Their insidious comings and goings always bode ill for the common man. A real wolf in sheep's clothing.
What happens if the companies still can't turn a profit and default on the bailout loans? :shrug:
Quote:
Originally Posted by Whiggamore
Dont stop now! Preach it brother! Personally I believe the capitalists own/control the government and they are eating us up.
A public debt is a private treasure!... Nicholas Biddle
It's just proof that the 'Free Market' ain't actually free for everyone. GM should be let crumble to make way for the next wave in a free market, but they don't let that happen. I'll bet their corporate lobby still works fine.
X
I agree, Comrade. These capitalist swine and their running dogs will exploit the workers if we let them.Quote:
Originally Posted by nun2sharp
Fortunately, we don't have to let them. We can vote them out.
Like all of you, I really hate this bailout. I just don't see the alternative. If we let the big guys go under, the little guys won't be able to get the credit they need to operate their businesses. Many will go under. More people will lose their jobs, their homes, and their savings. The potential ripple effect is terrifying.
This is why government needs to step in. It's not that the economy won't find a balance on its own. It will -- eventually. It's just that the suffering of the working people in the meantime will be horrific. This is the essence of Keynesian economics.
Once we get to our feet again, we should institute judicious rules and regulations that prevent these bastards from doing this again. I'm not ready to give up on the free market. There's nothing like it for driving prosperity. You just have to protect it from itself from time to time -- and protect us from it.
j
I believe in a free market as well as most, but I do not see it as free, I see it as manipulated. While you and I trust in it for our daily bread, someone else is making plans for your loaf.
If they let the auto industry die, what large manufacturing industries does the US have left. Nothing is made in the US any more other than cars. The auto industry. starting with Henry Ford, is what grew the middle class, unfortunately I don't see anything else that could take the auto industries place.
Until nafta and GATT we had all sorts of industry in the US and we usually had a strong economy. You have to produce something to create wealth, we no longer create wealth, we consume. It does not matter how much fake money they inflate the economy with, until we produce we are ruined. With the present trade agreements the only way we can compete with our trading partner(s) (China) is to live at their economic level or lower, several generations of your family living off dog and rice in a 12 ft by 12 ft room. When I was in Asia thats the way it was done, they are used to it and I guess that we will be used to it soon enough.
Remember Ross Perot and his description of that giant sucking sound you hear? That was the sound of jobs leaving the US. The guy was a nut but he happened to be a nut who was right!!!
I hate to be the bearer of bad news, what has been lost is not coming back anytime soon which is all the more reason to protect what is left like the auto industry. Trade treaties maybe one reason, another is the American drive to make the fast buck. Prime example the LCD screen was invented in the US, how many do you think are produced in the US? The Americans did the R&D then sold it, to foreign countries to produce, it's like cutting up the goose that lays the golden egg.
Why not outsource production to the slave labor market, just because 500,000 men died to end slavery here is no reason why we cant take advantage of it over there. I could not agree more with the goose analogy. But the jobs will come back, when we are willing to crawl on our bellies and beg for the favor of working. The management style of late 19th century Corporate America is now the same management style of Corporate Earth. Dont fool yourself the big boys deserve every penny you earn! Thats the way it was then and that is what they are getting ready to achieve now.
I think we agree. The US didn't get rid of slavery they just found a better way, a cheaper way, take the work to the slaves. This way you don't have to fed, house and take care of them.
I disagree- we still have the aircraft industry, which is HUGE and still run by a lot of small businesses. Besides, the American auto industry will be like a phoenix. It'll go down in flames only to rise again, better than ever.Quote:
Originally Posted by Hutch
Only if they do it the way Henry Ford used to do it in tough times, he used to cut the crap out of management, he realized his money was made on the floor.Quote:
Originally Posted by Quick Orange
Defense contractor - Wikipedia, the free encyclopediaQuote:
Originally Posted by Hutch
yeah, my industry is only a paltry 150 billion a year. America is still very, VERY good at making one thing. we've been the best since our infancy as a nation, and we've dominated the global market for more than the last century, and it won't be changing anytime soon.
Did you know that Alliant Tech Systems(ATK) the small arms ammunition contractor in the U.S. is outsourcing for American ammunition needs. Not only are they running the small arms manufacturing plant that produces ammunition for our ground forces, the are also buying ammunition from other countries such as; S. Korea, Sweden, Brazil, Israel and others. Is it because we cant keep up with demand(no) its because they can get it cheaper elsewhere, Jockey dont be surprised when they outsource you.
nun2sharp-> i'm not worried. it is currently a felony to outsource even a single piece of the thing I am working on right now. I'm not surprised about atk at all, they are widely regarded as the bottom of the barrel, and are the laughingstock of the whole industry.
Another 150 billion reasons per year why the country is in the shape it is.
Yes the defense industry is a cash cow that has been ripping off the tax payers for years.
The US aircraft industry now basically consists of one Boeing.
Many of the automotive manufactures and suppliers are also defense industry suppliers, with quantities and margins too low to sustain many of the companies.
BTW, I worked for them for 4yrs at the lake city plant, just so you know. Mark De Young once told us at ameeting that they did not have to make ammunition there that they could get it anywhere. At that same meeting he told us that they could get monkeys to do our jobs. I believed him, they had a monkey doing his.
c'mon hutch, how do you really feel? don't hold back :DQuote:
Originally Posted by Hutch
I wouldn't say the defense industry is ripping anyone off. we make excellent products that save lives, and the research we do (which is a huge part of our budget) eventually gets declassified and used in the private sector, thus helping everyone.
In order to raise money for the government, they must retain your confidence, your trust. To do that, they cannot run the printing presses or destroy your money. Instead, they have to let the deflation and depression run its course.
Bottom line: It's preposterous to believe that Washington can save every failing individual, company, country and government on this planet.
It's naive to believe that government gimmicks or tricks — manipulating the currency, writing new laws, changing the banking structure — will be a match for billions of consumers in revolt, millions of investors desperate to sell and thousands of banks pulling in their horns.
The government cannot repeal the law of gravity or stop investors from dumping their assets.
It cannot turn back the clock or reverse decades of financial sins.
It cannot win the battle against depression.
It cannot stop the Dow or S&P from losing half their value from current levels, if not more.
It cannot stop the collapse in real estate, commodities, and corporate bonds.
So act promptly now to liquidate or hedge your holdings, build cash and make sure the cash is safe.
Quote:
Originally Posted by Hutch
You know there's much more to the industry than just building passenger planes, right? Besides GE and Pratt & Whitney for engines, there are the military aircraft manufacturers. Besides even all that, you have the companies that manufacture many of the parts that go into those planes. Furthermore, there are the repairs that go into those. I've personally repaired Canadair's jets. I think there's a lot more out there that we just tend to forget about;)
Yes there are a couple of military aircraft mfgs. left, and yes there are whole industries which support them, but compared to the automotive industry along with its support industries it is very small, this is not to say it is not important. On that same note look at the shape of the aircraft industry it is a mere shadow of itself from say 30, 20 or even 10 years ago. Boeing is in a perpetual state of financial difficulty.
I really have a lot of mixed emotions regarding the Big 3. Emotions have no place in thinking about financial issues but it's hard to ignore them. I grew up in Detroit until age 7 and then the suburmbs of Detroit in a litle 900 sq.ft. bungalow in a blue collor sub. Dad was the odd one making the fire department a career after a short emplyment with Chrysler.
Everyone worked for one of the big 3 or a related industry like Fisher Body. Exery Christmas we went to the Ford Rotunda, every summer Greenfield Village or the Rotunda to ride the 'Test Track' I can't hardly think of my childhood without something of the auto heritage seeping in. Like Moms black 57 two door Ford, a boyfriends 67 Chevy. Dad brought home an Edsel which we didn't keep, also a push button transmission on a Plymouth (I think?). I learned to drive a Ford Fairlane and about gave Dad permaent whip-lash. I toured all the plants in school. It permeated life like the stonevutters in a movie years ago.
If you or I mismanage our finances, who will reward us for being irresponsible? I know if I were to bounce a check the Bank charges me a penalty, they don't offer me a $100 reward. I think there has to be strings attached or boundaries for the companys who receive tax paye rfunds. Let the CEO's underwrite the cost of their junkets.
Sue
If you or I mismanage our finances we aren't responsible for the job loss of millions of people nor the impact that has on the economy, this little folksy thing of comparing the financial industry or the automotive industry to ones personal finances is not an accurate analogy.
The automotive industry accounts for hundreds of thousands of jobs (maybe millions), tens and hundreds of billions of dollars of GDP, and the economic well-being of whole regions.
With judicious economic incentive, and perhaps some economic assistance for a bit, this portion of the economy can not only be saved; it can help lead the way into an energy future that gets away from foreign imports, brings energy jobs back to this country, and takes a huge first step toward reversing global warming.
What do you think? Help the auto industry out, or let 'em crash. Your choice.
(Tick-tick-tick-tick-tick)
j
crash. if a ceo runs a company into the ground, jobs will always be lost. how big does the company have to be before the taxpayers have to cover his ass? where do we draw the line?Quote:
Originally Posted by Nord Jim
in my opinion, the american auto industry hasn't been competitive in my lifetime... i think it's been going on momentum alone. the world changes and people want different stuff, and so companies die and new ones are born. the only difference here is the number of people employed.
if detroit dies, it will suck for a lot of people. i'm in no way denying that. it truly will. but those industries haven't been globally competitive in decades. they WILL die, eventually, and be replaced. it's the natural order of things. dragging it out and making the death slower (on the taxpayers' dime!) solves nothing, it's only a stalling tactic.
if a company can't succeed on it's own merits (after the first couple of years it's running) then i see no reason to artificially keep it alive.
pull the plug and let it die with a little dignity.
So I guess we'll buy the cars that free us from foreign oil from the Koreans? I'll put you down as okay with that.Quote:
Originally Posted by jockeys
j
The cattle are just coming in from the pasture and are lining up at the trough. There will be no end to this. The govt will just keep printing more money and borrowing more from China. One day the devil will have his due and all these foreign investors will make demands we won't be able to meet.
Instead of foreign hoards sacking this country like what happened to Rome we'll just have a giant distressed country sale.
I agree with the premise, the example is flawed as far as the damage, but will add this: While my bank account won't ruin millions of lives, my attitude of poor fiscal health is the same symptom of the disease we see writ large across the nation. Where, indeed, do we draw the line? The bailout is a gimmick used to pacify and castigate, capriciously doled out to those whom the Fed considers worthy, and in order to help us maintain confidence in their shell game. The fall of the mighty institutions would be a horrible thing. Propping them up on the rotted shell of money on credit is only going to make that fall worse when it does come. Come it will. Everything, everything always comes back around (except for that guy that owes me 20 bucks). I would prefer to see the government (I can't believe I'm saying it but it's true) take the money and simply buy the houses and give them to the homeowners, rather than a cyclical "loan" of up to 733 billion that will perpetually be spent, with the credit limit raised as needed, by a government that cannot manage its own house. The piper will present his bill, and the longer we stave it off, the worse it will be when it comes due.Quote:
Originally Posted by Hutch
aha! a false dichotomy, eh?Quote:
Originally Posted by Nord Jim
False Dichotomy
there are plenty of non-Korean cars in the world. heck, there are plenty of good non-american cars made right here in america! (honda, for instance)
i gotta admit, oversimplifying my position sure does make me look bad, though. nice try.
/enjoys this spirited, yet gentlemanly debate
I used "Korean" to mean "Non-American."Quote:
Originally Posted by jockeys
So how about this?
So I guess we'll buy the cars that free us from foreign oil from non-American sources?
And for the ones we actually manufacture here, we'll ship the profits to Osaka.
Better?
j
I won't argue about the aircraft industry any more. It may not be as big as the automotive industry, but it's at least growing and not deeply in the red. Check the numbers- you'll see it's on the rise. Even Boeing is far outpacing Airbus.
Jim, I say let it crash. All the pieces of the automotive puzzle will still be available, and some enterprising investor will come along and restart the process. There will be a temporary loss of work, but how is it any different from the strikes? The newly reborn marques will rehire the people that lost their jobs by necessity, and things will be back to normal. All they have to do is what the Japanese did (interesting reading for anyone interested).