Why the big three bailout is a BAD idea

[Drazzil]

You may or may not know this but the big three's failure is but a symptom of a larger problem, our main export is debt and our manufacturing jobs have been outsourced and offshored since the beginning of the seventies. Since then we have been proping up our standard of living by running up debt on credit cards and mortgaging our houses to pay on the credit cards. The main problem with the world economy and ours in general is that the US economy is what drives the world economy, and we, the American "consumer" have been constantly consuming, the same goods we used to produce in the seventies. Since then there has been an ever more business and corporate friendly atmosphere allowing businesses and corporations that used to manufacture in the US to offshore, and outsource and any other sanitized term the idiot CEO's can invent for screwing the American worker.

And we as a society have been dumb enough to allow it to happen, we allowed the media, the watchdog of democracy to be consolidated into three major conglemerates, owned by three people, they lull us into a sense of complacency, or as I like to call it, "Mass market apathy" They tell the people that it is normal for two people to have to work to make ends meet, that it is usual to be in debt up to our eyeballs, and that Universal healthcare is "simply untenable". Big media has told us that our shrinking standard of living is "business as usual" and because of "globalization" but carefully avoiding that the top one percent lobbied for these changes in the first place. Mass market media has told us that shipping our jobs to foreign countries that are anti democratic is normal and healthy and "good for the American consumer" but that wanting healthcare and a living wage is "Socialism" or "Communism"

And we as Americans, stupid sheep that we are, have eaten it all up hook line and sinker. We have gone out and bought every single doodad that marketing has told us will make our lives complete. We buy the same crap that US factories used to produce thirty years ago, and do it on the credit cards, even mortagaging our houses to do so. We faithfully consume the goods we no longer produce, to put money in the CEO's pockets all while watching our dwindling fortunes, health and standard of living.

This recent financial crisis has been the result of the mortage industries and the credit card industries playing a rope a dope with the American consumer. The credit card industries have extended credit cards to people they know can no longer meet minimum payments, and the mortage industries has allowed the same person to take out ever more creative loans on their homes, knowing that people will lose their homes five years down the line.

The banking industry did its part to screw America by forclosing in great whacking boatloads, never seeing that they would not be able to get a hundred and fifty grand for the same house they loaned the homeowner five hundred thousand for. The great ponzi scheme of American credit collapsed as consumers could no longer borrow money on their credit cards or homes, the people who could not see beyond their third quarter reports were buried under bad debt that they extended.

Enter the great financial collapse of 08. The same people who created this mess, who singlehandedly crushed the middle class under debt and outsourced American jobs and took their homes now wants a "bail out" The same people who mouthed "personal responsibility" to the same people whose lives they ruined in the name of "free market capitalism" now tell us that they are "too large to fail" and come to the slimebag politicans hat outstretched looking to the same Americans who they screwed since the seventies.

The Republicans and the democrats alike for their part, were more then glad to throw a trillion dollars into the failed schemes of the wall street bankers due to the lobbiests and the whole crooked and corrupt apperatus, one last hurrah, one final grab for the till before the next set of crooks enters office.

The way things are right now, at least from where I am standing, have no chance under Barack Obama, or as he is repeatedly been called "The centrist" I have a word for that, Corporate Democrat. If the American financial system were to be saved, rather then bailing out Wall Street, we would have had to bail out "Main street" and started a public works program not seen since the days of FDR. Not a jump start for Wall Street, or the big three, rather a helping hand for the drowning middle class. Instead, we hear about how Mr. Obama has appointed former "Clintonistas" If the American people wanted a Clinton government, they would have voted for Hillary.
The same politican who called Clinton a corporate democrat and more of the same trips over himself to stack his cabinet with Clinton and Bush administrators. "Change we can believe in" indeed.

"How does all of this relate to the Big Three?" you ask Well, I am getting to that. The big three is basically a microcosm, or small representation of our whole political system. Corrupt to the core, disgustingly inefficient and disgustingly myopic and fatally selfish. The only way to get real change is much as one would treat a condemned building: Tear it down to the foundation and build anew.

The same corrupt system that endlessly screws the average American has is sowing the seeds of its own demise, or as I like to call it "Making deposits in the bank of pain" The same bloated politicans and CEO's who heap debt on the American taxpayer, then take away his or her ability to pay that debt through outsourcing, then cluck their tougnes at the same American and shake their head sadly when they and their family are thrown out on the street make one fatal assumption: That the people of the United States of America have an infinite capacity for being screwed and infinite stupidity not to recognise who is doing the screwing. When things finally get bad enough to where people finally realize that they and their families are on the street, homeless, jobless, peniless, sick and in debt they will ask "How did I get here?" Americans will realize what has happened over the last thirty years and they will be ANGRY, they will have nothing left and if they want to survive they will have but one imperitive, and one choice. To revolt.

So yeah. I am glad when I see these politicans screw the American people, and no, I dont think the big three should be bailed out, let the system fail and let something new be constructed in its place. Its about goddamn time.

MODS: If this post is inappropiate or too political, feel free to delete it.

[Scottw]

http://img369.imageshack.us/img369/6012/bailoutyk2.jpg

[VirtualSmitty]

Originally posted by Poker
Here are a few other things we ask you NOT to do here at Cigar Asylum:

No threads that are political or religious in nature will be allowed.

:tu Lighten up, it's Friday :ss

[Da Klugs]

http://img369.imageshack.us/img369/6012/bailoutyk2.jpg

Nice.

I think we need to help try and save the Auto industry here in the US.

We being:

Consumers - We buy US cars .. because the bailout money should go as a tax credit or rebate check directly to the car buyer for cars sold by the big 3 that are assembled here on the next 10 million cars sold (around 2 years of historical sales). $ 10,000 per car on the first 2,500,000 sold, $ 7,500 per car on the next 2.5, $ 5000 on the next 2.5 and $ 2500 on the last $ 2.5. It's a fifty billion dollars and it goes to whoever buys the damn cars not the workers, executives etc. Direct benefit and 100% bang for the buck guaranteed.

Auto company workers - Everyone takes a % reduction in pay and benefits, workers, retirees, executives etc. Whatever the number is to make them competitive. Say 30%. If they say no friggin way... well then do it your way without any of the rest of our's money. The long term viability depends upon leveling the playing field with the competition. Otherwise this is just the first sip at the public trough.

Banks - Either loan money at reasonable rates to those that are credit worthy to buy cars, homes, etc. or we are taking our bailout money back.

[Tombstone]

Yep, when you ask people what they think about politicians they usually say they are liars and crooks. But for some reason people also think that politicians should solve all of their needs. The last person i want to manage my money is our politicians!!!!!!!! Limited Government=Good:c:c

[Ace$nyper]

While a lot of this is fact, it leaves out a lot and is pretty darn biased an article.
Since we have a no politics rule if I feel this is true or not I won't get into.

[tchariya]

I saw an interesting tidbit about American brands vs. Foreign brands.

It had been researched that American brands primarily assembled and used parts primarily from foreign soils while Foreign brands assembled and used parts primarily from American soil.

Conclusion: Foreign brands are more american than american brands.

here is a link to the article: http://www.cnn.com/2008/US/12/12/american.cars/index.html

[Tombstone]

Nice.

I think we need to help try and save the Auto industry here in the US.

We being:

Consumers - We buy US cars .. because the bailout money should go as a tax credit or rebate check directly to the car buyer for cars sold by the big 3 that are assembled here on the next 10 million cars sold (around 2 years of historical sales). $ 10,000 per car on the first 2,500,000 sold, $ 7,500 per car on the next 2.5, $ 5000 on the next 2.5 and $ 2500 on the last $ 2.5. It's a fifty billion dollars and it goes to whoever buys the damn cars not the workers, executives etc. Direct benefit and 100% bang for the buck guaranteed.

Auto company workers - Everyone takes a % reduction in pay and benefits, workers, retirees, executives etc. Whatever the number is to make them competitive. Say 30%. If they say no friggin way... well then do it your way without any of the rest of our's money. The long term viability depends upon leveling the playing field with the competition. Otherwise this is just the first sip at the public trough.

Banks - Either loan money at reasonable rates to those that are credit worthy to buy cars or we are taking our bailout money back.

Screw buying American...buy QUALITY. Ford and GM make inferior products...period (the CEO's from Ford and GM admitted this the other day). FYI there are other vehicle manufactures in the US besides the big 3 such as Honda, Toyota, Mercedes, Hyundai.

[tchariya]

Other tidbits of info to gleam from the above article...

it takes 2x as many engineers to develop a American badged vehicle vs. non-american vehicle.

It costs more to employ an American laborer than a laborer in other countries (compariing dollars to dollars and extra compensation for benefits).

USA is not known for its efficiency. There are so many levels of management and managed groups that bog down American efficiency.

[Tombstone]

Other tidbits of info to gleam from the above article...

it takes 2x as many engineers to develop a American badged vehicle vs. non-american vehicle.

It costs more to employ an American laborer than a laborer in other countries (compariing dollars to dollars and extra compensation for benefits).

USA is not known for its efficiency. There are so many levels of management and managed groups that bog down American efficiency.

Don't forget taxes.

[Tombstone]

Nationalizing the auto companies, and other companies, means bigger deficits -- and those mean less liberty for all of us.

[KidRock]

Move to Michigan then tell me if the bailout is a bad idea.



Signed,


Senior in college

[Tombstone]

Move to Michigan then tell me if the bailout is a bad idea.



Signed,


Senior in college

Why don't you move out of a state that punishes success (higher taxes)? Michigan is reaping what they have sown. For many years they have elected idiots that have perverted the way that the free market should flow.

[Da Klugs]

Screw buying American...buy QUALITY. Ford and GM make inferior products...period (the CEO's from Ford and GM admitted this the other day). FYI there are other vehicle manufactures in the US besides the big 3 such as Honda, Toyota, Mercedes, Hyundai.

Cost differential = big part of quality differences. Take the cost differential away, narrow the quality differences.

[Drazzil]

What I posted above isin't an article, its something I banged together in fifteen minutes or so, note the lack of in depth examination of the average American's role in this fiasco. Thomas Jefferson said something along the lines of:

"Our government isin't a representative of everyone, just those who participate"

We as Americans, well most of us have been content to let ourselves be lulled into a trap of complacency by those who would rob, cheat and steal their way through not only our wallets, but also through our civil liberties. Like an unchecked cancer the threat of special intrests threatens to kill our grand experiment into democracy, we are like a great liner sailing into an iceburg, and not many are the voices who would warn us of it. We are content to let madmen sail us straight into a disaster, in the name of short term gain, then we are content to let those same madmen load cash into lifeboats and set sail leaving us to drown, that ladies and gentlemen is the bailout.

We are perfectly happy to let our politicans point fingers and blame eachother and replace one set of corrupt men with another, like shuffling deck chairs on the Titanic.

With any sort of bailout we are mortaging not just our futures, but the futures of our children, and grandchildren. We are not the beneficiaries of this bailout, but rather we have been victimized twice. To put it into simple terms, it would be like coming home to find your home cleaned out, and then ten minutes later, having the robber show up in a suit and tie to ask for your bank account number, and having obtained this then asking for your childrens addresses so he can do the same to them.

To say I am angry at the whole system right now, would be an understatement.

[tchariya]

Move to Michigan then tell me if the bailout is a bad idea.



Signed,


Senior in college

At least you can still smoke in most public places up there...like casinos and bars.

[Tombstone]

Cost differential = big part of quality differences. Take the cost differential away, narrow the quality differences.

I understand your equation. But the truth of the matter is Toyota and Honda produce the same style/concept cars that Ford and GM do at the same cost to the consumer. That is why they are gaining marketshare.:2

[Da Klugs]

I understand your equation. But the truth of the matter is Toyota and Honda produce the same style/concept cars that Ford and GM do at the same cost to the consumer. That is why they are gaining marketshare.:2

Agreed. Wages are good here. Corporate profits are taxed at 35% and those would be nice to have here as well. :) No easy answers, mine were based upon the assumption that they are getting the money. As currently proposed, it ends up like the financial bailout, no direct benefits, no real resolution to the underlying problems.

[Cigary]

http://img369.imageshack.us/img369/6012/bailoutyk2.jpg
Funny as hell and sadly very true!

Nice.

I think we need to help try and save the Auto industry here in the US.

We being:

Consumers - We buy US cars .. because the bailout money should go as a tax credit or rebate check directly to the car buyer for cars sold by the big 3 that are assembled here on the next 10 million cars sold (around 2 years of historical sales). $ 10,000 per car on the first 2,500,000 sold, $ 7,500 per car on the next 2.5, $ 5000 on the next 2.5 and $ 2500 on the last $ 2.5. It's a fifty billion dollars and it goes to whoever buys the damn cars not the workers, executives etc. Direct benefit and 100% bang for the buck guaranteed.

Auto company workers - Everyone takes a % reduction in pay and benefits, workers, retirees, executives etc. Whatever the number is to make them competitive. Say 30%. If they say no friggin way... well then do it your way without any of the rest of our's money. The long term viability depends upon leveling the playing field with the competition. Otherwise this is just the first sip at the public trough.

Banks - Either loan money at reasonable rates to those that are credit worthy to buy cars, homes, etc. or we are taking our bailout money back.
I agree with this 100%!

What I posted above isin't an article, its something I banged together in fifteen minutes or so, note the lack of in depth examination of the average American's role in this fiasco. Thomas Jefferson said something along the lines of:

"Our government isin't a representative of everyone, just those who participate"

We as Americans, well most of us have been content to let ourselves be lulled into a trap of complacency by those who would rob, cheat and steal their way through not only our wallets, but also through our civil liberties. Like an unchecked cancer the threat of special intrests threatens to kill our grand experiment into democracy, we are like a great liner sailing into an iceburg, and not many are the voices who would warn us of it. We are content to let madmen sail us straight into a disaster, in the name of short term gain, then we are content to let those same madmen load cash into lifeboats and set sail leaving us to drown, that ladies and gentlemen is the bailout.

We are perfectly happy to let our politicans point fingers and blame eachother and replace one set of corrupt men with another, like shuffling deck chairs on the Titanic.

With any sort of bailout we are mortaging not just our futures, but the futures of our children, and grandchildren. We are not the beneficiaries of this bailout, but rather we have been victimized twice. To put it into simple terms, it would be like coming home to find your home cleaned out, and then ten minutes later, having the robber show up in a suit and tie to ask for your bank account number, and having obtained this then asking for your childrens addresses so he can do the same to them.

To say I am angry at the whole system right now, would be an understatement.

To say that I am growing more apathetic daily is an understatement. We, the middle class are systematically being downsized one class until it will either be the lower or upper class, period. By the time the gov't takes enough of our money thru these bailouts we will owe more money in our lifetime as it was estimated ( $25,000 per adult ) for all of the proposed bailouts. This is on top of what we already pay in our usual taxes. That is unacceptable,,,until we fight back with our votes this kind of $hit will continue. Anybody else had enough?

[piperman]

Does anyone think that the union has any affect on this, I mean who pays a person 38 buck an hour to tighten four bolts.

[houdini]

I own a business....Can I get a bailout if I mismanage and drive it to the ground?

NO BAILOUT - NO WAY.

[Da Klugs]

Does anyone think that the union has any affect on this, I mean who pays a person 38 buck an hour to tighten four bolts.

Isn't that a days work for government plumbers? :D US Autoworker jobs fall far less into that category now than 25 years ago. The issue isn't that they don't work hard. Visit a plant sometime. The issue is that alternatives (Honda, Toyota, etc) offer more bang for the buck/quality etc. because they can produce better vehicles at a lower cost. A recipe for extinction unless something changes. What has to change is the retirement costs, wage costs, benefits and work rules. The last contract guaranteed continuing to pay workers when their plant closed fer Christ sake. All the things the unions have fought for and won for 40 years. They won!!! Unfortunately there has to be a viable business entity to pay them. It all flushes unless they (management, Labor and Retirees) agree to something sustainable.... a significant percentage less than now. Otherwise, any money given only for stalls the inevitable and they all eventually lose.

[Ace$nyper]

I own a business....Can I get a bailout if I mismanage and drive it to the ground?

NO BAILOUT - NO WAY.

Same but it's tempting to try.

Dear Unkie Sam, so I've been boozed up in Costa rica for past 7 months, um can I get a few mil

it was a marketing error and i swear if it wasn't for the failing econ it would have worked.

[maddman]

A bail out as it sits is one big money pit if they dont restructure then to heck with them if the UAW is unwilling well get rid of them.

[AD720]

What is important to keep in mind, IMO, is that this a problem with further reaching impact than just the assebley line employees of Ford or GM. The tire manufactures, seat belts, air filters, nuts and bolts, salesmen, rental fleet companies...the list goes on and on. All of those companies and their employees would be effected by even one of the major automobile manufactures going under.

I want to be clear that I am not in favor of a "blank check" for the big three. There has to be some kind of restructuring.

I read that the average per/hour pay for a Ford employee is something like $70. And the average per/hour pay for a Toyota employee is something like $35. And I would be so bold as to say that many people would say that Toyota makes a superior vehicle. It seems pretty short sighted that people are not willing to give up a slice of the bread to be able to keep the rest of the loaf.

What it comes down to, to drastically over simplify things, is whether "we" (the royal we) bail out the auto industry now by restructuring the companies and turning them into something that is financially viable and continues to employ thousands of American workers or let the companies go under and put those thousands of workers out of work. And I would have to imagine that a large majority of those workers would need support from the government, in the form of unemployment or welfare or whatever.

The end result is going to be the same, money out of the goverment till. But one path to that is constructive. One is not.

All the "they F**Ked up" talk is totally accurate. Bad decisions were made that impacted the company. But that is done and no amount of finger pointing is going to solve the problem. The only thing to do is look forward and figure out a fix.

My :2, not that anyone asked.

[stitch]

When things finally get bad enough to where people finally realize that they and their families are on the street, homeless, jobless, peniless, sick and in debt they will ask "How did I get here?" Americans will realize what has happened over the last thirty years and they will be ANGRY, they will have nothing left and if they want to survive they will have but one imperitive, and one choice. To revolt.

It's Far past Damn time for this ... But I don't think enough Americans have the will or the Backbone for it ... Let us hope.

[HK3-]

Does anyone think that the union has any affect on this, I mean who pays a person 38 buck an hour to tighten four bolts.


Who pays a president who blows smoke and then has been back-peddling since he was elected.

Yes, the UAW needs to take a little cut.

[Tombstone]

It's Far past Damn time for this ... But I don't think enough Americans have the will or the Backbone for it ... Let us hope.

Revolution!!!!! :c

[Genetic Defect]

and how many billions were used to bail out freddie and fannie

[ChicagoWhiteSox]

Let them go down. What good will it do to bail them out? Will they restructure their business? Who knows.

[gettysburgfreak]

I will never ever buy an American made car. I am sick and tired of CEO's that make a **** load of money while they make crappy ass cars and then have the balls to ask for money to help their asses. Maybe if they actually made cars that were decent and didnt have salaires that could buy a small country, they wouldnt be in this mess. You don't see great car makers such as Audi, BMW, or Mercedes having problems.

[Genetic Defect]

I will never ever buy an American made car. I am sick and tired of CEO's that make a **** load of money while they make crappy ass cars and then have the balls to ask for money to help their asses. Maybe if they actually made cars that were decent and didnt have salaires that could buy a small country, they wouldnt be in this mess. You don't see great car makers such as Audi, BMW, or Mercedes having problems.

VW has issues, all manufactures makes lemons

[Rockestone]

Unions=Bad for Business .

[floydpink]

I'm a little foggy on all the facts, but I understood this to be a low interest LOAN that the automakers will pay back. How, I don't know as less and less people seem to want to drive American cars.

I'm hypocritical as I frown on Japanese motorcycles, but have 2 Japanese automobiles in my garage that are leased and will be traded in for more Japanese cars when the lease is up.

Last Ford I had blew through 3 trannies before hitting 100k miles. My Japanese trucks and wife's car never need more than an oil change.

[Genetic Defect]

Unions=Bad for Business .

Battle of the Overpass.

[gettysburgfreak]

VW has issues, all manufactures makes lemons


Yea but you don't see any of them asking their governments to bail their asses out.

[BigFrank]

When the big three go bankrupt and end up being purchased by foreign companies, people will sing a different tune.

[Genetic Defect]

When the big three go bankrupt and end up being purchased by foreign companies, people will sing a different tune.

I couldn't carry a tune in a bucket

[piperman]

What is important to keep in mind, IMO, is that this a problem with further reaching impact than just the assebley line employees of Ford or GM. The tire manufactures, seat belts, air filters, nuts and bolts, salesmen, rental fleet companies...the list goes on and on. All of those companies and their employees would be effected by even one of the major automobile manufactures going under.

.

True a lot of people will lose there jobs, companies wont make the money they use too. But the others Toyota, Honda, etc based here in the US. will now have to produce more which creates more jobs, still need tires, nuts, bolt, parts more sales people the list goes on.

The big three need to decide what is more important to them staying in business or restructure like lower wages better cars. Thats all

[Genetic Defect]

and the circle continued

[macpappy]

Bottom line. The problem has always been greed and a battle between factions for the division of profits. The top tier management of the "big 3" all believed that the companies owed them multi-million dollars a year for being in charge. The union leaders have high paying jobs and power because they believe the workers owe it to them for all they do. The union employee believe he should be paid more and given more to compensate him for the all the work he does to help the company turn a profit.

So what happens?

The employee tells the union (years ago), the company is making all these profits and we get none of them. The union says, "Go on strike. We'll force the Big 3 to pay you more and give you more. Just keep me in power and by the way, give me a cut of what you make because you owe it to me and I can use that money to buy influence. The Big 3, recognizing that without workers they have no product to sell says, "Ok. We agree to your demands." And to keep from decreasing their profits, they make cuts in production that reduces quality while raising the cost of the final product to cover the increase in wages and benefits to the employees.

For years it worked like this (IMHO) and the leaders of the Big 3 stayed in power by saying, "Look at the good job we're doing. Our profits are still good." (Like I said, this was years ago.)

Since the company is making all these profits and only the top people are making millions of dollars, the employees decide they need paid more. The unions want to stay in power so they tell the members, we'll get you more money. The business leaders give into union demands and raise prices and decrease quality. The foreign auto industry applauds the moves as they increase the sell of their better quality and often less expensive vehicles.

Bottom line? There is this big wheel and it keeps on turning and turning. But this big wheel has slammed into a freaking mountain and it's being shattered. And all the big heavy pieces are falling on and crushing the rest of the peons in the country.

Now. My oversimplified vision of the banking problems. Politicians forced them to make home loans to people with low incomes who 10 years ago wouldn't have been able to get a loan. The politicians did this to "buy" the votes of the constituents. "Look what I did for you and all the poor people. Vote for me and I will make sure that you get more and we'll make those rich people (anyone making more than you) pay for it."

What happens when they can't make the payments on a $175,000 home on a just above minimum wage salary? They default on the loan. The lender starts losing money and make more loans to temporarily increase their cash flow. Then the new loan recipients can't make their payments.

Another circle. Same results.