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On March 05 2009 12:03 SmoKing2012 wrote:Show nested quote +On March 05 2009 07:30 Hans-Titan wrote:Letting the US auto industry die might be good in theoretical economics, but from a practical, sane perspective the auto industry can't just be let to die. Whilst I agree that bailing out bad companies is unwise, we need to remember 2-3 million people depend on these companies to survive. Having a couple million more unemployed isn't a viable option for neither long or short-term growth, as well as it would be a widely unpopular decision just to let them die. Allow me to propose a hypothetical scenario. Suppose 2-3 million people are employed by a firm and their job is to spin around in circles in the desert for twelve hours a day. The firm had enough customers to sustain its workforce, but suddenly hard economic times hit and citizens decide it's no longer a good use of their money to pay people to spin in circles. Should the general public still be forced to support this industry through a bailout, so that the 2-3 million workers do not become unemployed?
Rofl, that is a ridiculous hypothetical. Obviously the auto industry is down because no one else has any money. Sales are down by as much as 50% but not by 100%, meaning that with reform sustainability is still possible. So you say let 3 million people loose their jobs subsequently costing countless others their jobs, I say keep them afloat, but mandate reform.
If the economy rebounded back to its highest point, the auto industry would be perfect, but of course that's not going to happen, so downsizing is needed. The auto industry didn't start this crisis, they contributed to it, but clearly not as much as banking/housing, which is where we should be focusing our attention. While we our trying to fix banking, I don't see a point of killing our own economy further by letting a company that could easily get back to sustainability completely fall apart.
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Before you guys make an assumption, maybe you should check this out
http://www.chimpsternation.com/forum?c=showthread&ThreadID=3405
Althought it isn't the big 3 thats doing this, i would expect them to be just as worse as Toyotas sales because:
NEW YORK – General Motors sold fewer cars globally than Toyota last year, as the Japanese automaker passed the Detroit company for the first time.
GM says it sold 8.356 million cars and trucks in 2008, falling about 616,000 vehicles short of Toyota's total of 8.972 million.
General Motors Corp. posted an 11 percent drop for the year, while Toyota's sales fell 4 percent.
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Rofl, that is a ridiculous hypothetical. Obviously the auto industry is down because no one else has any money. Sales are down by as much as 50% but not by 100%, meaning that with reform sustainability is still possible. So you say let 3 million people loose their jobs subsequently costing countless others their jobs, I say keep them afloat, but mandate reform.
If the auto industry can stay afloat by downsizing, why bail them out? Why not just let them downsize? Demand for their cars isn't zero, but consumers are sending a strong price signal to the automakers that they are too big. They don't need a bailout to downsize.
. While we our trying to fix banking, I don't see a point of killing our own economy further by letting a company that could easily get back to sustainability completely fall apart.
Forcing resources from productive sectors of the economy (private savings + consumption) in to unproductive sectors (auto-makers that are producing more cars than people demand for too high a cost) will hurt the economy far more than not forcing people to support industries that are hemmoraging money.
The idea that we should support failing industries so that people don't lose their jobs is another manifestation of the
Broken Window Fallacy.
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I am constantly amazed by how many people keep rallying against the automobile industry bailouts when they cost a mere fraction of the bank bailouts. At least the car manufacturers were producing tangible goods. You people seriously need to learn how to prioritize.
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United States22883 Posts
On March 05 2009 12:03 SmoKing2012 wrote:Show nested quote +On March 05 2009 07:30 Hans-Titan wrote:Letting the US auto industry die might be good in theoretical economics, but from a practical, sane perspective the auto industry can't just be let to die. Whilst I agree that bailing out bad companies is unwise, we need to remember 2-3 million people depend on these companies to survive. Having a couple million more unemployed isn't a viable option for neither long or short-term growth, as well as it would be a widely unpopular decision just to let them die. Allow me to propose a hypothetical scenario. Suppose 2-3 million people are employed by a firm and their job is to spin around in circles in the desert for twelve hours a day. The firm had enough customers to sustain its workforce, but suddenly hard economic times hit and citizens decide it's no longer a good use of their money to pay people to spin in circles. Should the general public still be forced to support this industry through a bailout, so that the 2-3 million workers do not become unemployed?
All the auto companies are currently losing money, but the competitors (Toyota and Honda) have been getting help from their government for years.
It's also cheaper to keep companies with those jobs afloat than it would be to create 2-3 million new jobs. A large bureaucracy will need to be put in place for the "new CCC" and that'll take time to develop, and will have large institutional costs.
On March 05 2009 08:25 KaasZerg wrote:
There would be more jobs created/saved if it was not put into those companies. This simply isn't true.
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I love Chrysler Crossfire. =)
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Underwhelmed, i like your post.
On March 05 2009 14:04 Underwhelmed wrote:
I am constantly amazed by how many people keep rallying against the automobile industry bailouts when they cost a mere fraction of the bank bailouts. At least the car manufacturers were producing tangible goods. You people seriously need to learn how to prioritize.
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On March 05 2009 14:04 Underwhelmed wrote:
I am constantly amazed by how many people keep rallying against the automobile industry bailouts when they cost a mere fraction of the bank bailouts. At least the car manufacturers were producing tangible goods. You people seriously need to learn how to prioritize.
I think it's funny when people value "tangible" things over abstract ideas because they don't understand them.
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On March 05 2009 12:03 SmoKing2012 wrote:Show nested quote +On March 05 2009 07:30 Hans-Titan wrote:Letting the US auto industry die might be good in theoretical economics, but from a practical, sane perspective the auto industry can't just be let to die. Whilst I agree that bailing out bad companies is unwise, we need to remember 2-3 million people depend on these companies to survive. Having a couple million more unemployed isn't a viable option for neither long or short-term growth, as well as it would be a widely unpopular decision just to let them die. Allow me to propose a hypothetical scenario. Suppose 2-3 million people are employed by a firm and their job is to spin around in circles in the desert for twelve hours a day. The firm had enough customers to sustain its workforce, but suddenly hard economic times hit and citizens decide it's no longer a good use of their money to pay people to spin in circles. Should the general public still be forced to support this industry through a bailout, so that the 2-3 million workers do not become unemployed?
This post says everything that needs to be said.
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On March 05 2009 15:03 ahrara_ wrote:
I think it's funny when people value "tangible" things over abstract ideas because they don't understand them.
Here's a question for you then: I invest in the stock of company A, and its share price goes up. Being the good investor I am, I decide to sell my stock and reap a profit. How much wealth has been generated by my actions?
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I don't know about you guys but I hope AIG goes down. I initially supported the bail out as AIG is too big and too important to go down but as I see how these bastards are using the bail out money for compensation and retention bonuses plus ridiculous resort parties my opinion has turned around. Let the auto industry survive but please let AIG go down! We are just delaying the inevitable.
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here let me sum up all of the bailouts:
government gives [x] individual [y] amount of money.
[x] individual does whatever the fuck with [y] that he/she wants to.
and thats why the bailouts are massive bullshit. they're just a con. there are some people who still don't see that ?
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On March 06 2009 14:54 travis wrote:
here let me sum up all of the bailouts:
government gives [x] individual [y] amount of money.
[x] individual does whatever the fuck with [y] that he/she wants to.
and thats why the bailouts are massive bullshit. they're just a con. there are some people who still don't see that ?
lol
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On March 05 2009 14:04 Underwhelmed wrote:
I am constantly amazed by how many people keep rallying against the automobile industry bailouts when they cost a mere fraction of the bank bailouts. At least the car manufacturers were producing tangible goods. You people seriously need to learn how to prioritize.
probably because the bank bailouts exist in the past and there is no point in rallying against something that has already happened
though I agree with what you are trying to say I guess
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United States22883 Posts
Thank you for this. I've been saying it for so long, Nippon Steel just cut production by like 40%, so Toyota and Honda do NOT want American suppliers to have problems.
I don't buy the 2-3 million job loss estimate either. Those are based on a single indirect connection to the American companies, if you follow the corollaries to their end, you'll find that Toyota, Honda, research institutions (especially in the areas of "green" technology), universities, etc. will be firing people. Part supply costs go up, transportation costs go up, cost of everything that gets transported goes up, etc.
BTW, if AIG goes down the rest will likely go down. They've got direct ties with a lot of other big banks (Geitner is unwilling to disclose what they are because people will pull out investments.)
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On March 06 2009 15:16 Jibba wrote:
I don't buy the 2-3 million job loss estimate either. Those are based on a single indirect connection to the American companies, if you follow the corollaries to their end, you'll find that Toyota, Honda, research institutions (especially in the areas of "green" technology), universities, etc. will be firing people. Part supply costs go up, transportation costs go up, cost of everything that gets transported goes up, etc.
Plus the fact that Chapter 11 doesn't mean 2-3 million people get instantly fired. It's called restructuring for a reason, and it is under a government arm. A government arm that doesn't have to sell votes at that.
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United States22883 Posts
It depends on how it all goes down. I know they've got Fiat's investment, but I would be surprised if Chrysler is around after all that. GM would be restructured, maybe taking parts of Chrysler, and I have no idea how Ford would stand if that all happens. Is it possible that by the time they ask for federal funding, it'll be too late? The Feds are in a spending mood right now, they won't be a year from now.
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On March 05 2009 08:25 KaasZerg wrote:
There would be more jobs created/saved if it was not put into those companies. More jobs and more productivity and return of investment per dollar.
Bail outs don't stop the bleeding in bad companies. A simple assembly line worker shouldn't make more than minimum wage or about 1600 dollars max. It takes the same amout of skills as flipping burgers.
The problem is an assembly line worker is a full-time blue collar employee. 9-5, working day in and day out, 5 days a week. 40 hours a week for a paycheck. Most of them will never make it out of the plant. Be it education, motivation, or whatever, they're for the most part lifers.
The people flipping burgers for the most part are high-school or college aged kids who are part-timing to make some cash to live on while they get their education, or are biding their time while they search for a job fresh out of school.
I agree that an assembly line worker shouldn't be rolling in riches - it's blue collar work - but they need to be able to make a living. Minimum wage for 40 hours a week, in case you haven't noticed, is no where close to being able to make any kind of living, unless you enjoy spending all of your money on bills, bills and more bills.
Travis pointed out the flaws of bailouts. I don't agree with them myself, but then again, I'm just one person, and it's not going to change. Some regulation of these would be nice.
I'd like to turn the attention to the welfare system instead. You want to see something that needs reform, look at that. Yes, there are people who legitimately need welfare to get buy for one reason or another, but there is a greater amount of people who abuse the welfare system and do not deserve the welfare checks they get. These are the kind of people who settle in in a trailer park in a crappy single-wide, don't get a job, go out and buy all the newest and greatest things, and continue to live this lifestyle until they die. They never actually contribute to society or do anything to improve their lives, they just take the government money and take hard-earned taxpayer dollars to live off of. For clarity, I don't have anything against trailer parks or single-wides - I lived in one for 13 years of my life - but I have something against the people who live the lifestyle I just described while I watch a lesser amount of society doing things the right way and working to earn their living.
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