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GREAT article :clap:
 

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Discussion Starter · #4 ·
Amazing article. I wish there was a way to get everyone to actually read it...
Well Warren Brown has a loyal following of WP readers in the D.C. metro area plus a great radio show, but this isn't exactly cartown USA.
 

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That's a good read!
 

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I agree. If only more Americans would read articles like this and question their motives.
 

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There's a chance that this article gets picked up by other papers. This is why I keep telling family members and friends to buy American if they are buying something new. It's important.
 

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Excellent article, Count me in as a lifelong American car buyer ( in the future after college) and also a big advocate of buying American. I don't want the Auto industry to turn into what a lot of other industries are today ( electronics).
 

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Does anyone believe in capitalism anymore? It seems to have gone out of style very quickly.

The Detroit automakers are in dire straits because they mismanaged their businesses for decades. Should taxpayers now pay for these bad business practises?

If we are going to embrace socialism, at least let's be honest and say so.

Warren Brown says:

"But here are GM, Ford and Chrysler asking for a loan, which they are vowing to repay."

Of course the automakers are going to say that. But the odds of the Detroit 3 repaying the loans are slim. That is why normal banks will only lend money to them at very high interest rates. Can I, as an individual, get preferential loan rates from the government too if my business starts to go belly up? I promise I will try to repay the loan too.

If the government is going to be a sugar daddy to every business enterprise that mismanages their affairs then taxpayers had better be prepared to start paying higher taxes, much, much higher taxes.
 

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Discussion Starter · #11 ·
Does anyone believe in capitalism anymore? It seems to have gone out of style very quickly.

The Detroit automakers are in dire straits because they mismanaged their businesses for decades. Should taxpayers now pay for these bad business practises?

If we are going to embrace socialism, at least let's be honest and say so.

Warren Brown says:

"But here are GM, Ford and Chrysler asking for a loan, which they are vowing to repay."

Of course the automakers are going to say that. But the odds of the Detroit 3 repaying the loans are slim. That is why normal banks will only lend money to them at very high interest rates. Can I, as an individual, get preferential loan rates from the government too if my business starts to go belly up? I promise I will try to repay the loan too.

If the government is going to be a sugar daddy to every business enterprise that mismanages their affairs then taxpayers had better be prepared to start paying higher taxes, much, much higher taxes.
The American automaker (especially GM) is a big part of the American economy. If they go belly up they will take a whole lot of people with them. So I guess you would be happy to also say forget about Fannie Mac and Fannie Mae also? They screwed up their finances but the gov't realises that they are too important to the economy to just let them go.
 

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The American automaker (especially GM) is a big part of the American economy. If they go belly up they will take a whole lot of people with them. So I guess you would be happy to also say forget about Fannie Mac and Fannie Mae also? They screwed up their finances but the gov't realises that they are too important to the economy to just let them go.
So a company just because it is big should get preferential treatment from our government while the little guy who works hard and pays his bills gets nothing?

The automakers would probably go through Chapter 11 and emerge stronger. They would hack their debts down to manageable levels and might actually start making consistent profits. This government bailout will only prolong the automakers agony.

The government should not be picking winners and losers in the economy.
 

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Does anyone believe in capitalism anymore? It seems to have gone out of style very quickly.

The Detroit automakers are in dire straits because they mismanaged their businesses for decades. Should taxpayers now pay for these bad business practises?

If we are going to embrace socialism, at least let's be honest and say so.

Warren Brown says:

"But here are GM, Ford and Chrysler asking for a loan, which they are vowing to repay."

Of course the automakers are going to say that. But the odds of the Detroit 3 repaying the loans are slim. That is why normal banks will only lend money to them at very high interest rates. Can I, as an individual, get preferential loan rates from the government too if my business starts to go belly up? I promise I will try to repay the loan too.

If the government is going to be a sugar daddy to every business enterprise that mismanages their affairs then taxpayers had better be prepared to start paying higher taxes, much, much higher taxes.
Capitalism is great when everyone plays by the same rules, but everyone doesn't. Just look around at the subsidies various countries heap upon their firms, of any sort.

Then also look at the fact that only the US has no universal healthcare, which saddles the domestics with a massive problem not evident with the competition. And with people living longer, the liabilities GM et al have to deal with continue unabated.

Universal healthcare would do wonders for many US businesses. Well, maybe not for insurance, but for the ones that we care about here it would be a godsend. Better than any loan.
 

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Capitalism is great when everyone plays by the same rules, but everyone doesn't. Just look around at the subsidies various countries heap upon their firms, of any sort.

Then also look at the fact that only the US has no universal healthcare, which saddles the domestics with a massive problem not evident with the competition. And with people living longer, the liabilities GM et al have to deal with continue unabated.

Universal healthcare would do wonders for many US businesses. Well, maybe not for insurance, but for the ones that we care about here it would be a godsend. Better than any loan.
Boeing thrives without the US having universal healthcare. As does Apple, Microsoft, WalMart, HP, Motorola, etc.. It is only because of mismanagement that GM, Ford and Chrysler are hobbled by crippling healthcare costs.

These bailouts are crony capitalism at its worst. Profitable companies in the US get no special treatment from the government, only badly managed auto companies qualify for the preferential bailout paid for by taxpayers (who also don't have universal healthcare).
 

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Boeing thrives without the US having universal healthcare. As does Apple, Microsoft, WalMart, HP, Motorola, etc.. It is only because of mismanagement that GM, Ford and Chrysler are hobbled by crippling healthcare costs.

These bailouts are crony capitalism at its worst. Profitable companies in the US get no special treatment from the government, only badly managed auto companies qualify for the preferential bailout paid for by taxpayers (who also don't have universal healthcare).
The US military provides subsidies to Boeing. They've got a lock on a huge market. Look at the stink when the Pentagon went with Airbus for the tanker. Boeing doesn't even HAVE a tanker, yet a stink was raised. So don't use Boeing as an example.

You can't use Microsoft. They are a de facto monopoly. And monopolies simply don't follow the normal rules of capitalism.

Apple survived courtesy of fanatical fans, not because they had products worth owning. Were it not for the iMac and iPod they'd be long gone. Think back at how close to closing up shop Apple was. It is the huge profits computer companies make that allows them to make mistake after mistake with little punishment. That and the incidental cost of starting a new product, which is trivial. Build a badly designed computer, minor cost. Build a bad platform, you're out 4 years or more and a LOT of money. Plus, the chip makers talk to the software vendors ALL the time. You think OPEC calls up GM to warn them about future oil production numbers?

I can go into a long diatribe about software and hardware. I've been in the industry more than 30 years. It sucks. The software sucks. The hardware sucks. It was better in the 80s than it is now. Today, what we have is horrendous. Sure, the computers are faster but all that does is hide how atrocious everything running on said hardware is. Do I think the iPod sucks? Yes. And I own 4 of them. But they're the best that's out there. Like the Mac. I have one on my desktop. I use it because it's a Unix machine. The sad part is, it's the same Unix I used 25+ years ago! Sure, it's got pretty colours and graphics, but underneath it's the same. And it sucks at being a computer hooked up to a network. Unix wasn't designed to do that, and it seriously shows. But we keep adding layer upon layer of suckitude only to wonder why everything's getting worse.

And I do wonder why you think ONLY the auto industry qualifies. What about the banks (repeatedly), Wall Street (repeatedly), the US airlines, and I'm sure there are a lot of others. Didn't Lockheed get a bailout back in the 70s?

If we throw in government subsidies and preferential contracts (which are anti capitalism) you see a lot of bailouts masquerading as something else. What about subsidies for sugar farmers in the US? Those make little sense, especially since a subsidy is nothing more than an ongoing bailout.

If you look deep enough, what you find is the US bails out just about everything -- except the auto industry. And yet, the auto industry is both the most visible, the most maligned, and the largest employer in the US. Remember, just because it's not called a bailout doesn't mean it isn't the same thing. Ongoing subsidies, preferential supplier contracts, etc. are all nothing more than bailouts. A bailout is one time, the others are ongoing. The latter can cost way more, but are usually utterly ignored by the media. Not as flashy, it seems.

And if GM was French or German, you think those governments would sit idly by? No. Look no further than Airbus to see how the Europeans handle things. And I also doubt the German media pissed all over Mercedes when their quality dipped the way the US media has been on GM et al's cases for the past few decades. Sure, GM et al screwed up, but you'd think you'd give them kudos for when they did good. Nope. A sucker gets an even break, but not GM, Ford, or Chrysler. It reminds me of that old joke that our ex-PM Paul Martin said once. "If I walked on water the media would report the story the next day with the headline: 'Paul Martin Can't Swim!'". Sigh.

Think about it. What would be more helpful to the long term health of the US? Bailing out Wall Street's greed or providing loans to GM, Ford, and Chrysler to ensure millions of manufacturing jobs stay in the United States? Who do you think actually learned a lesson from their past mistakes? Wall Street or Detroit? Who goes running to the Fed at the first opportunity? Wall Street or Detroit. I think you know the answer to that.

And I won't get started on the whole lumber thing that the US and Canada got into a while back. Wherein the US bailed out the US lumber industry via illegal tariffs. Especially egregious since Canadian lumber was cheaper because our dollar was at 60 cents at the time.
 

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So a company just because it is big should get preferential treatment from our government while the little guy who works hard and pays his bills gets nothing?

The automakers would probably go through Chapter 11 and emerge stronger. They would hack their debts down to manageable levels and might actually start making consistent profits. This government bailout will only prolong the automakers agony.

The government should not be picking winners and losers in the economy.
Who are the current banking and Wall Street bailouts helping? Not the little guy. (Ironically, universal healthcare would help "the little guy" WAY more than the big companies since it would eliminate stress and fear and costs to the very people who can least afford the stress, fear, and costs of the current healthcare system in the US.)

As for Chapter 11, think about it for a while. If GM goes through Chapter 11 they'll eliminate their pensions and healthcare obligations or so seriously restructure them as to eliminate them for the most part. That will hurt hundreds of thousands of "little guys". And, to add insult to injury, other companies would follow suit resulting in millions of Americans losing their healthcare, pensions, and other benefits. If you think it's bad now, just wait.

And without all those people with pensions and jobs making reasonable wages there won't be many folks buying stuff. GM going into Chapter 11 would send shockwaves through the US economy. It would probably plunge the US into a depression and would probably result in millions of jobs lost overnight. It would be ugly.

Instead, GM wants a loan to weather the storm. They're promising to pay it back. Everyone says GM is lacking product. To bring out product GM needs capital. Without capital they can't bring out the new vehicles fast enough. It's a vicious Catch-22.

Just remember, everything's interconnected but some things are MORE interconnected than others. The auto industry is heavily interconnected, way more than the mortgage companies are. We can survive bad mortgages -- we did in the 80s, the 30s, and we'll do so again. But if the industrial heartland disappears, kiss the economy goodbye.
 

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The US military provides subsidies to Boeing.
Military contracts are not subsidies.

You can't use Microsoft. They are a de facto monopoly. And monopolies simply don't follow the normal rules of capitalism.
Microsoft is a natural monopoly which is far differenet then a government mandated monopoly. Either way, they aren't asking for taxpayer's money to stay in business.

Apple survived courtesy of fanatical fans, not because they had products worth owning. Were it not for the iMac and iPod they'd be long gone.
"Courtesy of fanatical fans"? That's called loyal customers. Something Detroit automakers have fewer of every year.

Think back at how close to closing up shop Apple was.
Doesn't matter. Apple didn't close up shop. And if they had had to, they wouldn't have received billions in undeserved dollars of taxpayers money.

And if GM was French or German, you think those governments would sit idly by? No. Look no further than Airbus to see how the Europeans handle things.
I don't live in France or Germany. So why should what they do be relevant here?

A sucker gets an even break, but not GM, Ford, or Chrysler. It reminds me of that old joke that our ex-PM Paul Martin said once.
Oh not the pity angle. GM, Ford and Chrysler have had over 30 years to get their act together. How much longer do they need? Another 30? And why should taxpayers have to pay for their past incompetence?

Think about it. What would be more helpful to the long term health of the US? Bailing out Wall Street's greed or providing loans to GM, Ford, and Chrysler to ensure millions of manufacturing jobs stay in the United States?
Diverting billions of taxpayers dollars to industries that are a drag on the economy is not beneficial. If necessary, automakers can go the Chapter 11 route to get their finacial affairs in order. This costs taxpayers nothing and will likely restore automakers to health far quicker then handouts will.
 

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Who are the current banking and Wall Street bailouts helping? Not the little guy.
I don't agree with those either.

As for Chapter 11, think about it for a while. If GM goes through Chapter 11 they'll eliminate their pensions and healthcare obligations or so seriously restructure them as to eliminate them for the most part. That will hurt hundreds of thousands of "little guys".
GM's problems aren't my problems. As a publicly traded company, their financial affairs are their responsibility only. They have no special claim on taxpayers money.

GM going into Chapter 11 would send shockwaves through the US economy. It would probably plunge the US into a depression and would probably result in millions of jobs lost overnight. It would be ugly.
If GM went the Chapter 11 route, the sun would still shine and GM would continue making vehicles. They would restructure under the protections that Chapter 11 offers them. And without cost to taxpayers.

Instead, GM wants a loan to weather the storm. They're promising to pay it back.
GM is a very high credit risk. The odds of them paying back the loan are poor. So why should we throw good money after bad? Especially when its taxpayers money we're talking about.
 

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Military contracts are not subsidies.
But preferential treatment over foreign suppliers is.

Microsoft is a natural monopoly which is far differenet then a government mandated monopoly. Either way, they aren't asking for taxpayer's money to stay in business.
I won't go here. It's a religious argument.

"Courtesy of fanatical fans"? That's called loyal customers. Something Detroit automakers have fewer of every year.
Blindly loyal, perhaps. Apple was saved by Jobs. Can Apple survive post-Jobs is another question.

Plus, if Apple disappeared, would anyone truly notice or be affected. Not many, I fear.

Doesn't matter. Apple didn't close up shop. And if they had had to, they wouldn't have received billions in undeserved dollars of taxpayers money.
Apple doesn't have the employee base nor the economic impact GM failing would have. There is that difference.

I don't live in France or Germany. So why should what they do be relevant here?
Because what they do for their industry directly affects your industry. It's a global economy. So if Germany provides various subsidies and incentives for their industry it directly affects the manufacturers in the US that are in the same industry.

Want to see direct cause-and-effect, look no further than the rapid rise of Airbus. If it weren't for defense contracts, Boeing would be gone. Many of the other manufacturers are.

Oh not the pity angle. GM, Ford and Chrysler have had over 30 years to get their act together. How much longer do they need? Another 30? And why should taxpayers have to pay for their past incompetence?
I have no idea how long it takes to right a ship of GM's size. Have you done it? I don't think anyone ever has. But we do know it takes a long long time. It's not like Wagoner or Lutz can just say: "Tomorrow we build this car." They have to design it, deal with suppliers, work with unions, update factories, etc. Did they piss a lot of time away? Sure. Then again, we all do that. We refuse to see the writing on the wall.

Remember, hindsight is 20/20. I didn't hear many folks talking about GM having this type of problem in the 80s, which is when they should've listened to Ross Perot, but didn't. They were too successful back then to listen to the voices.

Diverting billions of taxpayers dollars to industries that are a drag on the economy is not beneficial. If necessary, automakers can go the Chapter 11 route to get their finacial affairs in order. This costs taxpayers nothing and will likely restore automakers to health far quicker then handouts will.
Chapter 11 will cost taxpayers a bundle. Who's going to foot the bill for all those unemployed folks? What about the healthcare costs? Pensions? etc.

If GM was small -- like Apple -- and lived in isolation -- like Apple -- then going into Chapter 11 would be no big deal. The effects would be local and minor. If GM goes into Chapter 11 the effects will be massive, and trigger all kinds of additional bankruptcies from additional firms all the way to personal bankruptcies. You could see dozens or hundreds of firms going under and thousands, perhaps hundreds of thousands of people having to declare bankruptcy if their pensions suddenly dried up as the company that had that pension restructured.
 

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Chapter 11 will cost taxpayers a bundle. Who's going to foot the bill for all those unemployed folks? What about the healthcare costs? Pensions? etc.
That's the beauty about Chapter 11, it would cost taxpayers little, if anything. Executives, employees, shareholders, suppliers, etc., would take the brunt of the restructuring. As they should.

If GM was small -- like Apple -- and lived in isolation -- like Apple -- then going into Chapter 11 would be no big deal. The effects would be local and minor. If GM goes into Chapter 11 the effects will be massive, and trigger all kinds of additional bankruptcies from additional firms all the way to personal bankruptcies. You could see dozens or hundreds of firms going under and thousands, perhaps hundreds of thousands of people having to declare bankruptcy if their pensions suddenly dried up as the company that had that pension restructured.
As I said before, if GM went into Chapter 11, the sun would still rise tomorrow and GM would still produce automobiles. Life would go on. And GM might even emerge from Chapter 11 able to compete effectively in today's automotive world.

Likewise, the government doesn't bail out individuals who face bankruptcy so there should not be special treatment for GM or Ford.

The pension plan at GM is already overfunded, so pensions would be fine. Health care would be another matter. But these problems are GM and Ford's problems. I sympathize with them, but I don't believe in giving our tax dollars to bail them out when individuals who go bankrupt every day receive nothing from the government.
 
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