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The apparently dire straits that the big three automakers are facing is a loss of revenue due to dropping sales greatly exacerbated by less availability of credit due to banking mismanagement encouraged by deregulation over the past couple of decades.
The problem is a symptom of a larger “disease”, and not the cause of the disease.
Throwing billions of dollars of taxpayer money at the automakers while their customers remain in large part unable to buy the cars they produce will not increase their sales and thus not solve any problem other than keeping the management from going bust.
Treating the symptoms of any life threatening systemic disease without addressing the causes will result in temporary comfort but the patient will die.
A simple answer just will not do.
The automakers can only be bailed out in a useful manner by retooling and regulating the economy, not by throwing cash at the automakers.
But as usual when we see Washington pols lining up to “bailout” an industry, what we’re really seeing is bought and paid for pols falling all over them selves to rob you and give your money to their criminal friends.
First on Wall Street. Now in Detroit.
Top democrats are in the pockets of the big three automakers with Reid and Pelosi, as usual, leading the charge to relieve you of your bank account. And with their surrogates in the blog world doing their laughable best to convince you that giving the automakers 25 billion dollars of your money is actually good for you.
Giving money to the automakers now , as we are seeing with the banking bailout, without first repairing and regulating to a “sane” economy is purely and simply stealing money from taxpayers who are now unable to buy cars, and giving it to incompetent industry CEO’s who have so run their companies down that they cannot attract enough investors who think their companies are a worthwhile bet to keep their companies afloat. So they turn to their alternative of last resort, and with the help of their friends in congress, will simply hold a gun (the tax code) to your head and force you to invest in them. Without giving you any stake in them.
Which will result in the short and longer term even further depressing the economy and auto sales along with it, and will start a habit of “returning to the well” by automakers to draw ever increasing amounts of money from the automakers own customers.
It would be artificially propping them up at your and your families and your friends and your childrens expense.
General Motors Corporate Chairman Rick Wagoner has his wagon cart before the horse with his suggestions that the economy is dependent on GM and the automakers.
The complete and utter reverse is true, and fortunately at least one democrat has his head screwed on straight.
Sen. Levin: Big three auto CEO’s should resign
Sen. Carl Levin (D-MI), during a Sunday appearance on Meet the Press, assailed the CEO’s of Detroit’s big three auto makers and said they should resign if it meant the government would then provide rescue loans to the failing companies.
Asked by MSNBC’s Tom Brokaw if he had relayed this opinion to General Motors Corporate Chairman Rick Wagoner, Sen. Levin remarked, “I’d be happy to tell Rick Wagoner that he ought to consider resigning if that is the difference between getting this kind of support and not.”
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Let’s get on with it.
Actually trying to solve problems is beyond their skill set.
is the only defense these people have in their plea for GM’s bailout.
As I pointed out in my diary of Saturday night, GM would be bailed out to produce vehicles nobody would buy in anything close to the quantities necessary to make GM a meaningful business rather than as a pet charity of the US government.
And of course it isn’t “taxpayer money” the US will be throwing at GM — it will be more debt dollars, further burdening the foreign banks with the responsibility of propping up the US dollar for fear that their own dollar reserves will plummet in value. The US will never, ever pay off its national debt with “taxpayer money.”
What’s really being wasted here is TIME — as money is at core a claim upon labor power, putting money in the hands of the automakers is a claim that we need to produce a lot of new automobiles, when what we need to produce is a world with stable ecosystems (against the reality of a world which will be catastrophically crippled by abrupt climate change caused in part by car exhaust).
The real challenge of us bloggers is not merely to argue against the bailout, nor for the bailout. Nor is it merely to suggest that minor repairs will fix the economy as a whole. It’s to suggest that the bailout debates themselves are predicated upon a false dilemma which narrows America’s options. Only a thoroughgoing radicalism will change the narrowmindedness which threatens to overwhelm the public sphere debate on bailouts.
All of SE, hell the whole southern half of Michigan’s economy hinges on the Big 3.
Have you any idea how many more foreclosures, failed schools, closed hospitals, closed business etc. would go down if they crash & burn?
No more US made cars?
Think about that.
I think they should bring Iaccoca to the table. You know, the man who took a dollar salary until his company was solvent?
Let them stay if they are willing to take NO salaries, NO bonuses until the rank & file is solvent.
Yeah, retooling to make economically available decent and greener cars instead of pushing luxury bullshit has to be key.
. . . which the United States would be better off without–although it wouldn’t have been dying quite this soon if anybody in the American automotive industry had had the vision to start building and marketing highly fuel-efficient cars 40 years ago. Let the automakers fail, and then spend the $25 billion, or whatever the bailout was going to be, or whatever amount it takes, nationalizing the industry, retooling the assembly lines, and retraining the workers to build the passenger and freight railroad cars of the future.
a small edit to put some under the fold for the front page Edger.
FIRST, SIT DOWN — GRAB A GLASS OF WHATEVER!
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Big Three CEOs Flew Private Jets to Plead for Public Funds
ABC News, November 19, 2008