Dems urge bailout of auto industry

“http://news.yahoo.com/s/ap/20081108/...ush_automakers

I bet on Sunday there is a secret, massive infusion of cash to the auto industry giants. Paulson, Bernanke and the rest of the crooks have already gone far past the 700 billion bailout figure and it is more like 900 billion they will be giving away. Soon to be a trillion dollars. All this extra money is being slipped under the table to everyone that have their hands out and we the people don't have any say-so about it. Spending more and more and more without the taxpayer knowing it. Isn't that called 'tyranny? There seems to be no end to the black hole that the feds throw all this money into to help their own in the big good-ole-boys-club, while very little is done for the common folk. What makes me madder than a hornet is there absolutely nothing I can do about it. The Feds are economically raping the taxper, and we can only stand idly by while all the powers to be take their turn raping us and we are powerless ...... The auto giants made their own bed ..... let them sleep in it.

The Democrats wanted change ...this is it ..... a change to even a bigger mess, bigger problems and an economy spiriling out of control even faster.”

“the government isn't giving anything away. it's buying "distressed mortgages" to prevent the credit default-swap market from caving in. the government already bailed out AIG because if AIG had failed so would all it's swaps and the chain reaction would have collapsed a great many financial institutions.

same would be true with a "bailout" of an auto maker like gm. the government wouldn't be giving away money to gm, it would be buying stock in gm in exchange for capitol. the government would become a shareholder, and probably a pretty significant one.

personally, i wouldn't put my money in gm stock nor would i invest in mortgage-backed securities or "distressed" mortgages. if i won't put my money there why should the government?

people borrowed money they couldn't pay back and banks were greedy and loaned money to people they should have never loaned money to. america bet on the house assuming the house couldn't fail... but americans spent against the equity in their homes and lived beyond their means until the "piggy bank" ran dry.”

“Trouble is we're in fully-fledged disaster prevention mode.

What do they say, 2.5 million jobs linked to the US auto manufacturers. We may as well just abandon the cities they're in.

If you think the US has any future in building the cars of the future then put the money in - if not then we may as well give up.

For the first time in years I think GM and Ford are starting to produce decent cars, ironically enough - Chrysler seems to have lost its way.”

“If you think the US has any future in building the cars...

i do not.”

“said another way, why should i buy stock in a company and pay for decades of decadence, self-delusional thinking, the greed of unions, and gross mismanagement. the auto industry was sleeping when it's overseas competitors reverse-engineered and shut down their operations. they won because they wanted it more. we lost. period.
last edited: 11/08/08 3:33:32 PM”

“Another brain-donor thread.”

“once the government owns a part of GM or ford they will never be able to stop pumping money into that company and/or giving them huge tax breaks. They will protect there investment with good money after bad until its all turns bad and disappears,”

“Well either you want the jobs and the money that goes with them in America, or you want them overseas.

I think the comparisons made with Lehman Brothers is also pretty good.

We'll pat ourselves on the back when we don't bail them out and then up paying more in the long term.

For me it's not a question of 'why should I bail them out' - it's a question of what are the consequences and implications of each choice.”

“the jobs will stay in America. many of the cars they sell here are built here”

“perhaps the future of america isn't manufacturing. those jobs that we are saving may not be the jobs we need to keep america strong in global markets. rather than buy out a rotten manufacturing base i would prefer spend the money on the people that have those jobs to get them working in other more strategic markets. why not invest the money in helping americans find new jobs competitive in a the world market rather than dump money into the pockets of fat-cats who have already failed these same people?”

“I kind of agree with you Yogi - I think the trouble is that we can't afford them all to go under at the same time, which is looking increasingly likely. Maybe Ford will emerge as the only survivor.

So what sort of jobs are you thinking we'll create Yogi? For me cars are one of the few manufactured products that a first world economy can produce in competition with cheap labor.

And there will be some jobs here Hyway - but they will be lower paying, and there will be far fewer of them. And hundreds of billions of dollars will flow overseas.

You may think lower paying is somehow good, but then don't wonder why your average American isn't getting any better off.”

“�Another brain-donor thread.�
Tllt
6:15:15 PM
11/08/08

Even Y2 is being civil.

It's too bad tilt had to bring his hate into the thread.”

“who cares? let them decide.

from the US census:

New information from the U.S. Census Bureau reinforces the value of a college education: workers 18 and over with a bachelor�s degree earn an average of $51,206 a year, while those with a high school diploma earn $27,915. Workers with an advanced degree make an average of $74,602, and those without a high school diploma average $18,734.

reform the education system so people can actually AFFORD a college degree (recognize that education is the key to america's future) and invest in getting people through the system.

i would MUCH rather spend the money on making college more accessable and affordable than dumping money down the black-hole of a manufacturing market we lost a long time ago.”

“But you have to have the overall economic strength in a country for them to have the available jobs to fill.

A fundamental problem with the American economy at the is that it's not generating these jobs.

People have been finding jobs, but typically for far less money, which is why the median income has declined in real terms.

So come on Yogi - where does the future of the US economy lie?”

“And yes, i think education is the key - but there's problem here and now. Education now may pay off in 20+ years, but what do we do in the meantime.”

“Union auto workers are over valued. They will continue losing jobs up there until their salary comes down to the value of their service”

“Uh huh, and there service will continue to go down in value since the value of the average American is declining.”

“I spoke too soon.”

“gimme gimme gimme gimme gimme

I hate America, yet I mooch off it anyways

-y2”

“The US auto industry is has-been. I've been saying for years it needs to shut down, and in doing so free up a good many workers that could segway(sp) into the construction and farming industries.

We could call it the Great Adios.”

“Ha! � And the coward changes back to his other troll name.”

“20 years? wtf are you talking about?

goods and services...

the future of the us economy doesn't lie in goods... it lies in services. our current tax structure is based on the assumption that we have a manufacturing economy (we tax workers wages). our ability to compete worldwide for manufacturing has slumped to a point where i don't believe this is a valid assumption anymore. we need to shift our assumption that we can compete worldwide for dominance in manufacturing (a commodity market) and move towards one driven by services.

i worked food service when i went into college. i filled out a 1040EZ form for years and barely paid any taxes. i paid my own way the first year and a half and got government grants the rest. four years later i got a job working in a lab that paid 3x what i made in food service. 20 years later my job pays 10x what i made in food service and i pay many, MANY times more in taxes each year than i made as TOTAL INCOME at my first job. the government made a GREAT investment in giving me that grant money. it has paid off for both me AND the government many times over.

we need to make more investments like this and less "buying up" of rotten, decrepit and mismanaged assets in an attempt to prop up a system that failed a long time ago.”

“In fact, I pay many more times the money in taxes each year than what the government gave me in grant money to educate me.”

“Ah, I'm a little torn on the whole thing really.

Cars would seem to be one of the high-value things that can continue to be manufactured here - but that doesn't mean we should be pouring subsidies into it.

I think they have started turning things around, but got slammed by things outside their control.

Trouble is there is an immediate problem now, and replacing 2.5 million jobs will be a huge task - when there is the potential to limit the damage and turn these companies around.

And the economy will take time to generate these jobs, if it at all. We've not created many jobs in the past eight years.

What will likely happen is that these people will find jobs, as others have done to jobs lost overseas in the past - only the chances are they will be lower-paid - taking more money outside the US.

Oh an education - the real benefits of investing in education come further down the road, when the kids entering school today reach their 20s and 30s. Educating adults will help, but that's a band aid and isn't likely to generate much economic impact.

A service economy isn't going to work for America in the long-term, as it doesn't really generate much, and leaves the country incredibly vulnerable to recessions.

I think the advantage to locally produced goods will come back around, as energy and transportations costs rise, and as wages increase overseas.

I think there is a future for GM and Ford, but GM in particular needs streamlining on all fronts - reducing the number of brands and the vast array of products.

I think Ford is a lot further down the line in terms of sorting out its business.

Chrysler are screwed.”

“It appears John Dingell and Carl Levin weren't helping them after all, fighting lower CAFE standards over the years. � (Now Dingell is supporting a carbon tax? � WTF? � LOL)

People say the gov't did get the money back from the Chrysler bailout. � I wonder if that was 'with interest'.

”

“Bail them out ONLY after they sign a NONASCARNOTE.”

“ok y2... look at the list of the fortune 500

http://money.cnn.com/magazines/fortune/fortune500/2008/full_list/

I'll paste the top 20 below. The first # is their 2008 revenue. The second is their profits.

the top performers are clearly the services companies. more companies in the fortune 500 are services companies than in the last two decades. there are some notable exeptions but be careful... companies like GE have huge services branches that account for a lot of that profit you see. they were smart and diversified their business so they are not so dependant on the tight manufacturing segment.

so while you may not think that a services economy is where it's at, empirical results of 20 years of economic development would claim otherwise.

...notice how in the top 20 of the fortune 500 that only the AUTO MANUFACTURERS are the ones losing money (GM is falling apart). of course in the full fortune 500 there are exceptions, but it's easy to see that it's the services portion of the economy that's growing and in fact thriving DESPITE the fact that we run our economy like we are time warped into the world war ii manufacturing era.

1 Wal-Mart Stores 378,799.0 12,731.0
2 Exxon Mobil 372,824.0 40,610.0
3 Chevron 210,783.0 18,688.0
4 General Motors 182,347.0 -38,732.0
5 ConocoPhillips 178,558.0 11,891.0
6 General Electric 176,656.0 22,208.0
7 Ford Motor 172,468.0 -2,723.0
8 Citigroup 159,229.0 3,617.0
9 Bank of America Corp. 119,190.0 14,982.0
10 AT&T 118,928.0 11,951.0
11 Berkshire Hathaway 118,245.0 13,213.0
12 J.P. Morgan Chase & Co. 116,353.0 15,365.0
13 American International Group 110,064.0 6,200.0
14 Hewlett-Packard 104,286.0 7,264.0
15 International Business Machines 98,786.0 10,418.0
16 Valero Energy 96,758.0 5,234.0
17 Verizon Communications 93,775.0 5,521.0
18 McKesson 93,574.0 913.0
19 Cardinal Health 88,363.9 1,931.1
20 Goldman Sachs Group 87,968.0 11,599.0 ”

“I think you maybe need to look at that list against Yogi. There's a mix of different types of companies there.

And it's no surprise that the big auto makers are struggling - that's why this thread is here - so I'm not entirely sure what the point is.

A balanced economy is far more stable than one over-reliant on on sector.

So Yogi - what do you think the costs and consequences of letting them fail are?”

“And are they the 2008 numbers? I would wonder how the financial firms would be faring in terms of profit and loss in the next forbes list.”

“gm screwed itself in the credit default-swap market. they were arrogant when they had a lot of cash and covered their eyes when the bottom fell out. they should file chapter 11 and take their chances like the steel companies and airlines did. they should use the time to give the unions a wake-up call (they need to do the math... 100% of zero is zero), close and consolidate plants, and for sure restructure their retiree benefits that match that of a company 3 times the size of GM. if they fail to emerge from chapter 11 then and ONLY then would i consider buying into this rotten-to-the-core market.”

“The thought is that this won't work for GM though - that it's game over if they do that, as people won't buy cars from a company that's going under.”

“The seeds for this latest auto maker disaster were sown many years ago.

Around 1950 when the auto makers were flush with a young workforce and booming sales they signed on with the benefits that are killing them now.

The U.A.W.'s Reuther and others had lobbied for national health care to take the burden of health care out of the equation of contract negotiations but industry leaders would have no part of it.

In the years immediately following WWII the auto worker force was almost entirely made up of people in their twenties.
Young people have almost no use for health insurance and none of these people were going to be retiring until the '80s so the auto makers didn't need any help from "big government".

The "urging" for a bailout seems to have been precipitated by the auto makers themselves.”

“ahh, I see they are failing because we don't have national health care. So national health care will be free as the air and no one will have to pay for it and the car companies will be able to make electric cars that few people want to buy?”

“i read somewhere that gm spends $52M/year on prilosec (generic now -but- "nexium" is basically the same thing) -and- that it spends more than $1B/year on prescription drugs overall.

yeah... i would LOVE to see the government buy into THAT... picking up the tab for those 1.25 million people enrolled in its health plan. nice.”

“i wanna know who the hell hacked spirit's account”

“she is having fun. i can see that grin on her face she makes when she tells a joke. lol!”

“she must be cutting and pasting, because i dont think ive ever seen her put together that many complete sentences with grammar and spelling that good”

“;) that was my thought too”

““i read somewhere that gm spends $52M/year on prilosec (generic now -but- "nexium" is basically the same thing) -and- that it spends more than $1B/year on prescription drugs overall.

yeah... i would LOVE to see the government buy into THAT... picking up the tab for those 1.25 million people enrolled in its health plan. nice.”
Yogisan
5:24:25 PM
11/09/08

Well who tf do you think is going to be picking up the tab for a substantial chunk of those drug costs if GM goes under? What about all those that work for GM now, what about those that work in jobs with benefits that serve the workers in the towns and cities dominated by GM - what about those local businesses that will go under, what about the parts makers, the people administering the benefits for GM, the people managing the 401k plans.

You see that Forbes figure - $182 bn, plus the losses, plus the Ford $172 bn - you're essentially pulling that out of the local economies wherever these businesses are based - then pull the plug on the local dealerships, the ones advertising on local TV, and in local newspapers.



Although I was reading today that GM is about to scrap healthcare benefits for its retirees anyway.”

“Rewarding bad work with safety nets and cash is stupid. The government will rob them of the very thing they need the most, to learn to be more competitive.”

“They'll learn when they go out of business?

Everyone will learn when the US no longer manufactures cars?

The people working for them will learn when their job goes overseas?
last edited: 11/09/08 7:26:09 PM”

“If they can't make a product that is competitive then so be it. Let them drown.

Corporate welfare is the worst kind because they assume all profits and we tax payers assume all risk.”

“Yep - lets turn this recession into a great depression.”

“Y2 wants corporate welfare.

He'll be shopping at Wal-Mart now.”

“y2 wants state ownership of all business. I can't see his belief system leading to any other alternative”

“No Hyway - it sickens me to the core that because of your belief system which we've seen in action over the past eight years that the government has to bail companies out or see us all face real devastating economic consequences.”

“Like the US gov owes a noncitizen a job......”

“y2 wants corporate welfare.

y2 wants corporate welfare.

y2 wants corporate welfare.

y2 wants corporate welfare.

y2 wants corporate welfare.”

“the dumber he gets, the older he gets”

“Independent of what you think about bailing out GM, we are still a world manufacturing superpower. In spite of of the manufacturing we have lost to Asia and Mexico, manufacturing is still huge in the US. You can't look a the fortune 500 and get a good picture. The small and medium size manufacturing companies are probably the backbone of manufacturing in the US.

So, do you spend tax payers money to pay unemployment benefits (with lots of extensions!) to 1.25 million workers? Or lend GM some cash? Or strategically retrain the displaced workforce?

Sadly, we don't have the leadership on either side of the aisle that understand manufacturing, environmental, and safety issues in this country. NAFTA and GATT proved that.”