Victory! republican finally do some good

[dinaluvsApple]

as a canadian im very pleased with this outcome.
i was getting very tired of these unskilled union slobs earning as much as what nurses, police officers and firefighters make and being the leeches that brought down these 3 companies.
i hope they dug a nice and cozy grave because they'll be sleeping in it for quite some time.


http://www.cnbc.com/id/28183485

WASHINGTON- A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.

[.Andy]

i was getting very tired of these unskilled union slobs earning as much as what nurses, police officers and firefighters make and being the leeches that brought down these 3 companies.
Is this really what bought down the auto companies?

[Surely]

I hope you're right dude.

The stock market is supposed to tumble tomorrow- the Nikkei is already down 7%.

Besides, the White House is just going to give some of that TARP money to the auto industry instead.

I agree that they don't deserve a handout, but a loan with conditions would save many jobs and an important North AMerican industry.

[drichards]

You don't feel that a skilled union worker who is responsible for assembling, checking, sourcing, and otherwise making sure your car or cars around you are put together in a safe manner should be paid a good wage? And do you have any idea how many Canadiens and Americans livelihoods are dependent on these three companies? This is bigger than a few dollars. Do some thinking before you shoot your mouth off.

[Blue Velvet]

Why should union members take a pay cut after they only just negotiated pay awards with the big three last year that matched salaries with plants overseas?

And until recently, the big three were doing fine. So why blame the unions all of a sudden? Because that would play into Republican political hands wouldn't it and mess with base Democratic support.

Don't drink the kool-aid.

[synth3tik]

I sure hope you are referring to the labor union bosses and not the auto workers themselves.

75% of the problem is bad management, and 25% is export/import laws backed by the labor union.

Why should union members take a pay cut after they only just negotiated pay awards with the big three last year that matched salaries with plants overseas?

And until recently, the big three were doing fine. So why blame the unions all of a sudden? Because that would play into Republican political hands wouldn't it and mess with base Democratic support.

Don't drink the kool-aid.

The auto union does a lot of lobbying and has gotten a lot of import/export laws on the books. To the point that there are rather popular model Ford cars that we have never seen in the US.

A friend who worked in labor laws explained it to me better then I can to others.

[leekohler]

You don't feel that a skilled union worker who is responsible for assembling, checking, sourcing, and otherwise making sure your car or cars around you are put together in a safe manner should be paid a good wage? And do you have any idea how many Canadiens and Americans livelihoods are dependent on these three companies? This is bigger than a few dollars. Do some thinking before you shoot your mouth off.

Bingo. I feel safer if someone who builds the trains, planes and autos I ride in are paid well.

[dinaluvsApple]

You don't feel that a skilled union worker who is responsible for assembling, checking, sourcing, and otherwise making sure your car or cars around you are put together in a safe manner should be paid a good wage? And do you have any idea how many Canadiens and Americans livelihoods are dependent on these three companies? This is bigger than a few dollars. Do some thinking before you shoot your mouth off.

first of all these companies arent gonna go bankrupt.
they will enter chapter 11 and union will be dissolved, and wages will be reinstated to match competitors in the same state.
why should somebody in kentucky make more building ford(example) than building a Honda?

once the union is dissolved, i will fully support money being loaned to them to restructure and revamp their lines.

Why should union members take a pay cut after they only just negotiated pay awards with the big three last year that matched salaries with plants overseas?

And until recently, the big three were doing fine. So why blame the unions all of a sudden? Because that would play into Republican political hands wouldn't it and mess with base Democratic support.

Don't drink the kool-aid.

plants overseas?
u mean those in europe where they mostly(not all euro countries) have socialized healthcare and old age care dont the company isnt as burned as it in the states, where the avrg domestic car has $1400 attched to it in legacy cost to pay for workers who retired like 30 years ago.

[quagmire]

first of all these companies arent gonna go bankrupt.
they will enter chapter 11 and union will be dissolved, and wages will be reinstated to match competitors in the same state.
why should somebody in kentucky make more building ford(example) than building a Honda?

once the union is dissolved, i will fully support money being loaned to them to restructure and revamp their lines.

From what I hear, unless the gov't supports them in Chap 11, GM will quickly tumble into Chap 7.

Bingo. I feel safer if someone who builds the trains, planes and autos I ride in are paid well.

Since everyone here loves to say Toyota and Honda make wonderful vehicles, their workers get paid less, but still pump out good products. So why is the UAW against cutting their wages to those levels( which are decent wages as well as Toyota and Honda are fighting to keep the UAW out of their factories).

[gotzero]

Let's see how smart they feel when they have to give something like $50-100B to AIG to pay for GMs CDS contracts.

It did not make sense on the surface, but the bailout was a bargain. The republican party also just killed themselves in the eyes of the "working man". I wish they would have done this before the election...

[Blue Velvet]

This is all part of the same wingnut meme that minorities destroyed the economy, and that ACORN and FreddieandFannie dug the hole... now it's the unions. Because to admit otherwise would destroy conservatism, and they know it.

It’s crucial to get the history right, writes a Nobel-laureate economist, identifying five key mistakes—under Reagan, Clinton, and Bush II—and one national delusion.

The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal. Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud, “I have found a flaw.” Congressman Henry Waxman pushed him, responding, “In other words, you found that your view of the world, your ideology, was not right; it was not working.” “Absolutely, precisely,” Greenspan said. The embrace by America—and much of the rest of the world—of this flawed economic philosophy made it inevitable that we would eventually arrive at the place we are today.

JOSEPH E. STIGLITZ

http://www.vanityfair.com/magazine/2009/01/stiglitz200901?currentPage=1

[dinaluvsApple]

You don't feel that a skilled union worker who is responsible for assembling, checking, sourcing, and otherwise making sure your car or cars around you are put together in a safe manner should be paid a good wage? And do you have any idea how many Canadiens and Americans livelihoods are dependent on these three companies? This is bigger than a few dollars. Do some thinking before you shoot your mouth off.

i live in ontario, so i know how important the auto industry is to people here.
im very well aware of the trickle down effect through parts makers.

but there is a difference between a good wage(grossly overpaid union slobs)
and a market wage similar to what other companies making the same product(at a superior quality i might add) get paid.

From what I hear, unless the gov't supports them in Chap 11, GM will quickly tumble into Chap 7.

i can guarantee you once the union comes crawling back from their slime hole and acts reasonable the republicans will support the loans.

Is this really what bought down the auto companies?

yes it is.
GM, Ford and Chyrsler, even though i hate their products, were forced into producing suvs and trucks and gas guzzlers, because of labour costs that made it unaffordable to build economy cars like the civic.

[Blue Velvet]

but there is a difference between a good wage(grossly overpaid union slobs) and a market wage similar to what other companies making the same product(at a superior quality i might add) get paid.

For instance?

Let's start with the fact that it's not $70 per hour in wages. According to Kristin Dziczek of the Center for Automative Research--who was my primary source for the figures you are about to read--average wages for workers at Chrysler, Ford, and General Motors were just $28 per hour as of 2007. That works out to a little less than $60,000 a year in gross income--hardly outrageous, particularly when you consider the physical demands of automobile assembly work and the skills most workers must acquire over the course of their careers.

More important, and contrary to what you may have heard, the wages aren't that much bigger than what Honda, Toyota, and other foreign manufacturers pay employees in their U.S. factories. While we can't be sure precisely how much those workers make, because the companies don't make the information public, the best estimates suggests the corresponding 2007 figure for these "transplants"--as the foreign-owned factories are known--was somewhere between $20 and $26 per hour, and most likely around $24 or $25. That would put average worker's annual salary at $52,000 a year.

http://www.tnr.com/politics/story.html?id=1026e955-541c-4aa6-bcf2-56dfc3323682

[dinaluvsApple]

For instance?



http://www.tnr.com/politics/story.html?id=1026e955-541c-4aa6-bcf2-56dfc3323682



http://www.npr.org/news/specials/gmvstoyota/


Profitability per Vehicle
Source: 2005 Harbour Report
GM:
Loses $2,331 per vehicle
Toyota:
Makes $1,488 per vehicle


Average Hourly Salary for Non-Skilled, Assembly Line Worker
Source: Center for Automotive Research
GM:
$31.35/hour
NOTE: Includes idle workers still on payroll and those on protected status.
Toyota:
$27/hour
NOTE: Includes year-end bonus.

that protected status refers to the lowlifes in the job bank playing tetris while still making their wages.

Health Care Costs per Vehicle in 2004
Source: 2005 Harbour Report & A.T. Kearny Inc.
GM:
$1,525
Toyota:
$201

once u factor in these additional costs, that how you end up with the $70 per hour.

Average Labor Cost per U.S. Hourly Worker
Source: GM & Toyota
GM:
$73.73
Toyota:
$48

[drichards]

but there is a difference between a good wage(grossly overpaid union slobs)
and a market wage similar to what other companies making the same product(at a superior quality i might add) get paid.

Superior quality? JDpower might disagree.
Continuing to call the workers grossly overpaid union slobs isn't going to reflect well on you. What do you do for a living, and why do you feel it your right to be detrimental to another man's quality of person? That union worker has a family to support, and is damn proud of what he does.

[Sun Baked]

From what I hear, unless the gov't supports them in Chap 11, GM will quickly tumble into Chap 7.

One goes down they all do, if GM files bankruptcy and slow payment to their suppliers -- those suppliers will switch to COD or also file bankruptcy.

Since the big three tend to share suppliers these days, it may cause a big ripple in the entire US auto industry.

Simply changing the terms on the Ford suppliers can mean a major cash crisis for them and may cause their bankruptcy.

---

Lack of parts or lack or cash aren't very good when you are hurting, and may mean even popular models may end up in short supply.

[Blue Velvet]

But then what's the source of that $70 hourly figure? It didn't come out of thin air. Analysts came up with it by including the cost of all employer-provided benefits--namely, health insurance and pensions--and then dividing by the number of workers. The result, they found, was that benefits for Big Three cost about $42 per hour, per employee. Add that to the wages--again, $28 per hour--and you get the $70 figure. Voila.

Except ... notice something weird about this calculation? It's not as if each active worker is getting health benefits and pensions worth $42 per hour. That would come to nearly twice his or her wages. (Talk about gold-plated coverage!) Instead, each active worker is getting benefits equal only to a fraction of that--probably around $10 per hour, according to estimates from the International Motor Vehicle Program. The number only gets to $70 an hour if you include the cost of benefits for retirees--in other words, the cost of benefits for other people. One of the few people to grasp this was Portfolio.com's Felix Salmon. As he noted yesterday, the claim that workers are getting $70 an hour in compensation is just "not true."


Notice how, in this article, I've constantly referred to 2007 figures? There's a good reason. In 2007, the Big Three signed a breakthrough contract with the United Auto Workers (UAW) designed, once and for all, to eliminate the compensation gap between domestic and foreign automakers in the U.S.

The agreement sought to do so, first, by creating a private trust for financing future retiree benefits--effectively removing that burden from the companies' books. The auto companies agreed to deposit start-up money in the fund; after that, however, it would be up to the unions to manage the money. And it was widely understood that, given the realities of investment returns and health care economics, over time retiree health benefits would likely become less generous.

In addition, management and labor agreed to change health benefits for all workers, active or retired, so that the coverage looked more like the policies most people have today, complete with co-payments and deductibles. The new UAW agreement also changed the salary structure, by creating a two-tiered wage system. Under this new arrangement, the salary scale for newly hired workers would be lower than the salary scale for existing workers.

One can debate the propriety and wisdom of these steps; two-tiered wage structures, in particular, raise various ethical concerns. But one thing is certain: It was a radical change that promised to make Detroit far more competitive. If carried out as planned, by 2010--the final year of this existing contract--total compensation for the average UAW worker would actually be less than total compensation for the average non-unionized worker at a transplant factory. The only problem is that it will be several years before these gains show up on the bottom line--years the industry probably won't have if it doesn't get financial assistance from the government.


These agreements were already in place. Yet, somehow the bottom collapsed out of the economy and all of a sudden, it's the unions fault? Give me a break.

[gotzero]

As goofed up as the UAW is, this was not a union problem. No one should be any angrier at the UAW today then they were a year or two ago.

first of all these companies arent gonna go bankrupt.
they will enter chapter 11 and union will be dissolved, and wages will be reinstated to match competitors in the same state.
why should somebody in kentucky make more building ford(example) than building a Honda?

once the union is dissolved, i will fully support money being loaned to them to restructure and revamp their lines.

Would you buy something expensive that regularly could need repairs/parts from a bankrupt company? Also, as I mentioned above, it is a layer cake. GM goes under, and suddenly AIG owes tens of billions of dollars to CDS holders. Suppliers go under, unemployment flies up, etc.

[drichards]

Health Care Costs per Vehicle in 2004
Source: 2005 Harbour Report & A.T. Kearny Inc.
GM:
$1,525
Toyota:
$201

General Motors and the other American companies have a significant retired worker population to provide healthcare for that the Japanese and Koreans do not have in America because they haven't been building cars here for over fifty years. The proliferation of Asian vehicle manufacturing in the US began in the late 70s and didn't pick up much until the early 90s. GM has union contracts to uphold, and they should. But you OP seem to think its all the union's fault, and its not. If the US had social healthcare, the situation would be improved, but its not an argument to get into.

[dinaluvsApple]

As goofed up as the UAW is, this was not a union problem. No one should be any angrier at the UAW today then they were a year or two ago.



Would you buy something expensive that regularly could need repairs/parts from a bankrupt company? Also, as I mentioned above, it is a layer cake. GM goes under, and suddenly AIG owes tens of billions of dollars to CDS holders. Suppliers go under, unemployment flies up, etc.

Chapter 11.

Numerous airlines were in Ch11 and people still flew on them. How many times was UAUA in chapter 11? Did those people lose their jobs? Did people stop flying United?

General Motors and the other American companies have a significant retired worker population to provide healthcare for that the Japanese and Koreans do not have in America because they haven't been building cars here for over fifty years. The proliferation of Asian vehicle manufacturing in the US began in the late 70s and didn't pick up much until the early 90s. GM has union contracts to uphold, and they should. But you OP seem to think its all the union's fault, and its not. If the US had social healthcare, the situation would be improved, but its not an argument to get into.

im just pointing out, what led to all this.

i do agree big mistakes were made at the top with the biggest being agreeing to all the greedy demands from the unions.
This isn't the Chrysler bailout of the late 70s when they could still compete. Fact is the auto manufacturers today are welfare organizations that only makes cars on the side.

[gotzero]

Chapter 11.

Numerous airlines were in Ch11 and people still flew on them. How many times was UAUA in chapter 11? Did those people lose their jobs? Did people stop flying United?

I do not really view that as a direct comparison. A car is a "durable good", and one thing I do believe the automakers about is the fact that people will be reluctant to buy something as big as a car from a bankrupt company, reorganizing or not. Flying on a bankrupt airline would be like riding a Caprice Classic taxi. There is a big difference between renting space and buying the car.

United was not profitable for a number of reasons, but their bankruptcy operations were analogous to their normal ones. The same cannot be said for a durable goods company. You are thinking about the ticket and you should be thinking about the plane. Imagine if Boeing went bankrupt instead of United. Would you want to buy a $100M plane from them if parts and support might not be available in the future?

[rhsgolfer33]

As a Republican that actually has an understanding of economics I think this is terrible. What we really need right now is a major company in our economy to file for bankruptcy and cut thousands of jobs, yeah, thats great for the economy. The Republicans that cut this down should be ousted as soon as possible. Allowing these companies to fail will not only harm the economy in terms of jobs but will decrease the governments tax revenue as well (just what we need with a 11 Trillion dollar national debt, less revenue).

Its funny that you think people building Fords make more than people building Honda's, they make about the same per hour; all that $70 an hour figure includes tons of pension and healthcare expense for retired workers that Honda doesn't have.

I dislike labor unions extremely, but saying the labor union caused all this is ludicrous. The labor union played a part, but lack of innovation and failing to diversify their vehicles are what caused this, the union was a small contributing factor; if anything it was the automakers lack of backbone in fighting the union that contributed a portion to higher costs. dinaluvsApple, you're living in a delusional world fed by too much Bill O'Reilly and Rush, try thinking for yourself for a change, you'll realize those guys have little value other than for humor.

[.Andy]

Fact is the auto manufacturers today are welfare organizations that only makes cars on the side.
Down with blue collar workers :mad:

[drichards]

The union's job is to secure a living wage and adequate retirement benefits for its members. And the union is not the problem. These companies may be called mis-managed. They may be accused of making poor decisions on what vehicles to build and not build. They killed the electric car and built Hummers.

But I'll let you in on a little secret.

We wanted Hummers. We wanted Escalades, we wanted F150's, we wanted SuperCrew extended bed giant pickups. The Ford F150 was the best selling vehicle in America for over twenty years. And when Ford, GM, and Chrysler asked focus groups what they wanted, they delivered. The Americans are jabbed about the small car quality, about midsize fuel efficiency, and so on. But until 2007, nobody cared.

This whole situation everything is in is based on the downfall of credit from an over extension of home and auto loans to underqualified people who defaulted on their mortgage and car payments. This caused a mild recession and devaluation of the dollar, which caused prices of goods to change, and later caused consumer spending to change in a negative fashion.

It caused panic. Which caused the bank crash, which turned to the bailout, which punished the entire world economy. And now gas is down and you might still have a job so you might feel like things are on the up and up. But credit is still trashed, futures of everything are being shorted, and the turmoil has just begun.

[drichards]

Down with blue collar workers :mad:

That is a really saddening attitude.

[Blue Velvet]

This whole situation everything is in is based on the downfall of credit from an over extension of home and auto loans to underqualified people who defaulted on their mortgage and car payments.

If it was only that then the situation wouldn't be so bad... it was the deregulation that enabled banking to bundle all that debt and then trade it on the global market as assets. All worthless paper.

[.Andy]

That is a really saddening attitude.
It's an absolutely horrible attitude. And unfortunately appears incredibly pervasive amongst posters with certain political ideologies.

[Cromulent]

It's an absolutely horrible attitude. And unfortunately appears incredibly pervasive amongst posters with certain political ideologies.

I don't think it is any particular political ideology. Even extreme fascists understand the necessity of keeping the working classes employed and reasonably happy.

This is just short sighted idiotic rhetoric from someone who is failing to see the bigger picture. The fact that the US senate has rejected this bailout has now condemned the American public to pay far more in helping those who will inevitably lose their jobs to find new work or to pay them welfare.

[CalBoy]

This is not good news at all.

As someone else mentioned, this measure was an ounce of prevention, and we don't exactly have a pound of cure lying around these days.

Bush and Paulson can still use TARP money, but seeing as how Bush is determined to leave the White House à la Sherman leaving Atlanta, I don't think he's going to be very receptive.

[Blue Velvet]

Thing is... this is just a taste of things to come. Republicans will dig in and become obstructionists. There's no political reason for them help solve the problems they've created. Look at the state of the country, the war, the economy.

They laid a massive steaming turd in the hat before passing it to Obama and want nothing more to run against him in 2008 saying that nothing has been fixed. Just a bunch of venal feckers who trashed the joint and are already blaming the new tenants.

Oh, and things could get worse. Much worse.


It's quite unsettling to talk to members of Barack Obama's transition teams these days, especially those who are helping with the economics portfolio. Without going into details, the sense I get from them is that they are very worried that the economy will get a lot worse before it gets better. Not just worse... a lot worse. As in -- double digit unemployment without the wiggle factors. Huge declines in aggregate demand. Significant, persistent deficits. That's one reason why the Obama administration seems to be open to listening to every economist with an idea and is stocking the staff with the leading lights of the field. In one sense, the general level of concern among Obama advisers and transition staffers is reassuring; they get the magnitude of the problems, and they're not going to assume that, just because the bottom has never dropped out before -- certainly not in the lifetimes of most people doing policy these days, the bottom will never drop out.

Where the discussion isn't going, at least in public, (or the PR level), is the possibility that the first foreign policy crisis the administration will face will be the complete economic collapse of a large, unstable nation. To be sure, Pakistan is nearly broke, and U.S. policy makers seem to be aware of that; but a worldwide demand crisis could lead to social unrest in countries like Indonesia and Malaysia, Singapore, the Ukraine, Japan, Turkey or Egypt (which is facing an internal political crisis of epic proportions already). The U.S. won't have the resources to, say, engineer the rescue of the peso again, or intervene in Asia as in 1997.

The public rhetoric from Team Obama seems to treat history as having ended in early October, which is understandable; the priority right now is on the liquidity crisis, the structure of government and the peopling of the administration and the domestic economy.

http://marcambinder.theatlantic.com/archives/2008/12/its_quite_unsettling_to_talk.php

[Cromulent]

Looks like everyone will be getting a very real history lesson on 1929 - 1932 soon.

[drichards]

If it was only that then the situation wouldn't be so bad... it was the deregulation that enabled banking to bundle all that debt and then trade it on the global market as assets. All worthless paper.Well yes, but your point and my point are directly tied to each other, and if we'd like to go back further, we can point toward the debt-based society and the decision to stop backing US currency in gold. Backing it in nukes and balls isn't working anymore.

[FrankieTDouglas]

u mean those in europe where they mostly(not all euro countries) have socialized healthcare and old age care dont the company isnt as burned as it in the states, where the avrg domestic car has $1400 attched to it in legacy cost to pay for workers who retired like 30 years ago.

I have trouble understanding the gibberish here, but I believe you're referring to people like my father, who worked for GM for nearly 30 years as an electrician before being able to retire. Now he lives off the retirement checks they send him. Are you saying he should not be receiving that money after working so long?

[itcheroni]

Thing is... this is just a taste of things to come. Republicans will dig in and become obstructionists. There's no political reason for them help solve the problems they've created. Look at the state of the country, the war, the economy.

They laid a massive steaming turd in the hat before passing it to Obama and want nothing more to run against him in 2008 saying that nothing has been fixed. Just a bunch of venal feckers who trashed the joint and are already blaming the new tenants.

Oh, and things could get worse. Much worse.

I'm quite liberal and backed Obama since Iowa, after realizing America might vote for him, but I have to disagree with your characterization of Republicans in regards to the economy.

From my understanding, mortgage-backed securities, the toxic assets bringing down the financial industry, became popular due to the Fed's absurdly low interest rate after the dotcom bust. Most global investors, who usually bought T-bills, wanted better options. 1% was not a reasonable rate and certainly not caused by market forces. Greenspan made the interest rate that low to stave off the mild recession until after the 2004 election, helping Bush get reelected. It was a purely political move with a profound effect on the free market. You had the deregulation of the housing market but you also had a perversely low interest rate from the Fed. I don't think the free market is as much to blame as I've been hearing.

As far bailouts, I think people need to keep in mind that America has no money. America is completely broke. Every dollar America comes up will either be borrowed or printed. And every dollar that is printed will lead to further inflation. So when evaluating whether or not to bail out companies, it is choosing the lesser of two evils; unemployment vs. inflation.

I'm not an economist, but the Austrians make sense on this one and I'm scared, very scared that they might be right. They're 2 for 2 so far. They warned of the S&P crash and the housing bubble. Their strongest belief is that the dollar will crash hard and the US will experience hyper-inflation. The fear is that our solution, to throw money at these problems, will multiply the problem and be our downfall.

My heart wants to believe that these bailouts will help rather than hurt. But my head is uneasy.

[Peace]

yes it is.
GM, Ford and Chyrsler, even though i hate their products, were forced into producing suvs and trucks and gas guzzlers, because of labour costs that made it unaffordable to build economy cars like the civic.


How does labor costs dictate what auto's are manufactured ? One would think the major cost would be re-tooling the plants with new equipment. Something that's not human and doesn't get a wage.

I understand the UAW is pretty bloated but to blame GM for not making fuel efficient cars on employees is really passing the buck from management responsibilities.

[Blue Velvet]

From my understanding, mortgage-backed securities, the toxic assets bringing down the financial industry, became popular due to the Fed's absurdly low interest rate after the dotcom bust.

Those securities would never have existed and been so malleable if massive deregulation hadn't occurred in the first place, taking the financial industry's word at face value. Face it, the objectivist's dream lies in tatters; a decades-long experiment in radical economics that has bought us to the present day. Those on the right have nothing further of value to add to the current debate; they merely offer more of the same.

[itcheroni]

Those securities would never have existed and been so malleable if massive deregulation hadn't occurred in the first place, taking the financial industry's word at face value.

What you're saying is completely true. I just don't think the free market is as culpable as I've been hearing. The free market isn't free when it's manipulated for political ends. And, for argument sake, there's no way we can know if a purely free market system would have had the same result. A number of factors combined to create a perfect sh**storm.

IMO, the best thing would be to get rid of the Federal Reserve. Why should a private bank decide our interest rates and have sole power to print our money?

[Blue Velvet]

What you're saying is completely true. I just don't think the free market is as culpable as I've been hearing. The free market isn't free when it's manipulated for political ends.


Fact: There is no such thing as the free market. We have regulations on safety, ingredients, price fixing... you name it. In a pure free market, all the dice are loaded in favour of the producer, not the consumer. In a purely free market, producers would be free to pollute, free to ignore standards, free to monopolise.

The Anglo-Saxon Tory-Republican notion free market mantra is a complete myth propagated by those who it rewards and that myth appeals to those of ideological purity and simplicity, which ignores the interconnectedness of all economic activity.

It's instructive to note that of all EU countries, the UK is said to be the currently worst-hit by this economic crisis; an economy that has largely followed the same lines. Blair's government was much the same as Clintons', tinkering around the edge of neo-liberal policy while Germany was laughing quietly...

[CalBoy]

Thing is... this is just a taste of things to come. Republicans will dig in and become obstructionists. There's no political reason for them help solve the problems they've created. Look at the state of the country, the war, the economy.

Of course if they take this stance, then they're setting themselves up for another 1936-style election.

Not that I would necessarily mind, but I'd much prefer the economy to not go there again. Hopefully the Republicans are willing to read their own electoral history and not get in the way of the economy's recovery.
And, for argument sake, there's no way we can know if a purely free market system would have had the same result.

It would likely be worse. Let's not forget that our current problem is due to the result of a variety of "laissez-faire is best" policies.

IMO, the best thing would be to get rid of the Federal Reserve. Why should a private bank decide our interest rates and have sole power to print our money?

The Federal Reserve isn't private, it's quasi-public. More importantly, all of its key leaders are appointed by the President and confirmed by the Senate.

Besides, the Fed can't "print" money.

Aside from that, the Fed's independence gives it immunity from political pressure. Would we really want interest rates to fall just because an election is around the corner?

[rdowns]

Chapter 11.

Numerous airlines were in Ch11 and people still flew on them. How many times was UAUA in chapter 11? Did those people lose their jobs? Did people stop flying United?


I'm sorry but I find this to be an incredibly stupid analogy. If I buy a ticket on a bankrupt airline, what do I stand to lose? A few hundred bucks if it isn't honored. BFD.

Just because many people flew on a bankrupt airline doesn't mean they were happy with it; many have no choice in airlines when they travel. If you don't live in a major city, you may have only one choice in an airline to get you where you need to be.

Now to buying a car from a company in bankruptcy. What's the risk there? Well, let's say you buy a $25,000 car. Will the three year warranty be honored or will the company be gone? Will parts be available or will the parts suppliers also be taken down? If the dealer is also taken down, will I have access to a competent service facility? What is the resale value of my car? Will competitive financing be available for a car in this situation?

Please tell me how a risk of a few hundred dollars is on par with the risk of $25,000.

[Thomas Veil]

Why should union members take a pay cut after they only just negotiated pay awards with the big three last year that matched salaries with plants overseas?

And until recently, the big three were doing fine. So why blame the unions all of a sudden? Because that would play into Republican political hands wouldn't it and mess with base Democratic support.

Don't drink the kool-aid.You should work in my office. We are all either liberals or independents who lean left, and everyone but me is bashing the auto workers for making "so much" money. The prevailing (i.e., condescending) attitude is that union workers make way too much, especially considering that "all" they do is tighten bolts.

Personally, I find this frustrating and infuriating (not to mention surprising from so-called liberals). To me it smacks of jealousy of some of the last few non-professional workers in America who are actually making a decent living wage. I suppose they'd rather auto workers make $8/hr. Yeah, that'd be a great stimulus to the economy.

If people wanna blame somebody in the American auto industry, blame the stinkin' executives who acted like we'd have cheap gas forever and just kept on building fuel-guzzling trucks and SUVs. Blame government for not getting more involved and insisting that auto makers manufacture competetive, fuel-efficient cars.

And even this isn't the reason the auto companies are in the position they're in right now. Toyota and Mercedes report that shipments of their autos are piling up on the shores of our country, because their inventory isn't selling. The plain fact of the matter is that nobody in their right mind is gonna take out a large loan to buy an expensive durable good like a car, when the economy is shedding jobs like crazy and nobody knows if they're gonna be working next week.

BTW, whatever happened to the Senate being the sensible, deliberate part of our bicameral legislative branch?

[gotzero]

TARP funds are being used. The republican senators just got their bluff called.

They are going to take a huge character beating for a position that did not even last twelve hours before being taken care of by someone who understands that A*B*C was going to cost a lot more than a bailout...

[rdowns]

I'm watching a press conference, Gettelfinger of the UAW is speaking and he released an email he was given (to and from fields deleted). In essence, it was from Republicans urging their caucus to not support the bill as it was simply the Dems paying back organized labor for the Obama victory. I think we see how the next 4 years are going to be.

I wish these damn politicians (from both sides) would friggin' wake up and realize we're in some real deep ***** and put aside their damn politics and work toward solutions.

[dinaluvsApple]

Don't blame capitalism for these problems. Socialism - and GREEDY socialism are to blame. The credit crisis in the states is a direct result of social engineering where some believed that home should be affordable for all! So, owning a home becomes a right, not something that you work towards. Hence sub-prime mortgages - and then banks left with $200k mortgages on homes now worth $50k. So the bank is essentially bankrupted by a government requirement that they provide low-interest loans to low income, high risk earners. Thats socialism, not capitalism.

The losses by the Big3 have more to do with cost structure than markets. The percentage cost for health care, union costs (high wages), pensions, etc are way too high - and the Big3 have NO control over these costs. A few years ago, GM was allocating $3500 per vehicle sold to cover future health care costs for retirees. Thats over 10% of the cost of most of the vehicles they sold. SO, the competition can sell an equivalent vehicle for say $2000 less or at the same price and make $2000 more.

The problems we are experiencing today are a result of overtaxation (imefficient redistribution of wealth by governments), too many unions negatively impacting ROI for corporations, too many social programs (handouts for parades, multiculturalism, make work projects, etc) that add nothing to the country's GDP, too many people expecting to retire at 50 (but not having any of their own savings).

If the government (US and Canada) want to do something to stimulate the economy, tax breaks are the only way. Remove ALL taxes from ALL vehicles (imports/Toyota/Honda included), and let the consumer decide iof GM should survive.

All these jobs will not disappear if GM goes bankrupt. They will receive creditor protection restructure their costs, close some plants, and emerge better and more efficient. If they fail after that - its because of capitalism (consumers didn't find value in their product). If they fail now, its because of socialism

[leekohler]

Don't blame capitalism for these problems. Socialism - and GREEDY socialism are to blame. The credit crisis in the states is a direct result of social engineering where some believed that home should be affordable for all! So, owning a home becomes a right, not something that you work towards. Hence sub-prime mortgages - and then banks left with $200k mortgages on homes now worth $50k. So the bank is essentially bankrupted by a government requirement that they provide low-interest loans to low income, high risk earners. Thats socialism, not capitalism.

The losses by the Big3 have more to do with cost structure than markets. The percentage cost for health care, union costs (high wages), pensions, etc are way too high - and the Big3 have NO control over these costs. A few years ago, GM was allocating $3500 per vehicle sold to cover future health care costs for retirees. Thats over 10% of the cost of most of the vehicles they sold. SO, the competition can sell an equivalent vehicle for say $2000 less or at the same price and make $2000 more.

The problems we are experiencing today are a result of overtaxation (imefficient redistribution of wealth by governments), too many unions negatively impacting ROI for corporations, too many social programs (handouts for parades, multiculturalism, make work projects, etc) that add nothing to the country's GDP, too many people expecting to retire at 50 (but not having any of their own savings).

If the government (US and Canada) want to do something to stimulate the economy, tax breaks are the only way. Remove ALL taxes from ALL vehicles (imports/Toyota/Honda included), and let the consumer decide iof GM should survive.

All these jobs will not disappear if GM goes bankrupt. They will receive creditor protection restructure their costs, close some plants, and emerge better and more efficient. If they fail after that - its because of capitalism (consumers didn't find value in their product). If they fail now, its because of socialism

Yeah, decent living wages suck and so does health care for retirees. Those things are just terrible! :rolleyes::mad:

Your post is so oversimplified it's amazing. It sounds like you got it from The Rush Limbaugh show. A lot of very knowledgeable posters here have explained things in great detail to you regarding the current situation. Did you read any of it?

[takao]

I'm watching a press conference, Gettelfinger of the UAW is speaking and he released an email he was given (to and from fields deleted). In essence, it was from Republicans urging their caucus to not support the bill as it was simply the Dems paying back organized labor for the Obama victory. I think we see how the next 4 years are going to be.

I wish these damn politicians (from both sides) would friggin' wake up and realize we're in some real deep ***** and put aside their damn politics and work toward solutions.

they sure have to .. because i just read in in article about GM/Opel that it is expected that without help Gm might be bankrupt shortly before or shortly after christmas

and if i look at my calender "shortly before christmas means monday + 1 week which means if no solution is made next week GM is done

[gotzero]

1. Don't blame capitalism for these problems. Socialism - and GREEDY socialism are to blame. The credit crisis in the states is a direct result of social engineering where some believed that home should be affordable for all! So, owning a home becomes a right, not something that you work towards. Hence sub-prime mortgages - and then banks left with $200k mortgages on homes now worth $50k. So the bank is essentially bankrupted by a government requirement that they provide low-interest loans to low income, high risk earners. Thats socialism, not capitalism.

2. The losses by the Big3 have more to do with cost structure than markets. The percentage cost for health care, union costs (high wages), pensions, etc are way too high - and the Big3 have NO control over these costs. A few years ago, GM was allocating $3500 per vehicle sold to cover future health care costs for retirees. Thats over 10% of the cost of most of the vehicles they sold. SO, the competition can sell an equivalent vehicle for say $2000 less or at the same price and make $2000 more.

3. The problems we are experiencing today are a result of overtaxation (imefficient redistribution of wealth by governments), too many unions negatively impacting ROI for corporations, too many social programs (handouts for parades, multiculturalism, make work projects, etc) that add nothing to the country's GDP, too many people expecting to retire at 50 (but not having any of their own savings).

4. If the government (US and Canada) want to do something to stimulate the economy, tax breaks are the only way. Remove ALL taxes from ALL vehicles (imports/Toyota/Honda included), and let the consumer decide iof GM should survive.

5. All these jobs will not disappear if GM goes bankrupt. They will receive creditor protection restructure their costs, close some plants, and emerge better and more efficient. If they fail after that - its because of capitalism (consumers didn't find value in their product). If they fail now, its because of socialism

Numbers above added by me.

1. This is simply not true. Subprime mortgage lending was popularized by deregulation that allowed originators to sell off mortgages. The people creating the loans only had to worry about them long enough to securitize them, so teaser rates became the fashion.

2. Even if the numbers are accurate, they are already sunken costs, and most of the costs will not be taken care of by bankruptcy.

3 and 4. This is not possible. I really do not know how else to say it. It is like fighting the declaration that unicorns are real. There is only a small fringe of people that understand economics that believe for a moment that lowering taxes produces any kind of significant/permanent/long term growth that does not have consequences later (in my opinion, we are seeing the consequences of the Bush tax cuts now). Look how well the neo-con argument worked in the states over the last 8 years. Why do you think the US is in a governmental (industry problems are separate) financial crisis?

5. As said before, a durable goods manufacturer cannot go bankrupt and survive. Paulson via Bush (who I view as a radical conservative as far as economic principles) is rushing in to save GM. This does not seem like the normal behavior of someone that believes the automakers could survive bankruptcy.

[Beric]

If there's a depression going on, then we all know how well FDR's policies worked. They only prolonged the Great Depression by 10 years.

I notice certain people in these forums get rather ruffled when they see their precious unions in danger. We wouldn't want to lose our biggest supporters, would we? While unions were a good idea originally, the amount of political power unions wield in this country today is staggering. The California Teacher's Union, in Cali were I live, for example, makes it impossible let good teachers get higher pay and for bad teachers to be fired. Everyone has to have the same wage and be treated "equal" regardless of true capabilities.

Unions are just too powerful, and don't really help workers anymore. But why should Democrats care? When they eliminate the worker's right to a private vote on whether or not to unionize, then every union boss in this country can have a solid block of Democratic voters. Unions are deeply intrenched politically, and it's hard for someone with a wide perspective to see their real good for anyone today, along with plenty of bad.

It sounds like you got it from The Rush Limbaugh show.

The ultimate insult for a liberal, eh? Sounds like you got your line from MSNBC.

[rdowns]

I notice certain people in these forums get rather ruffled when they see their precious unions in danger. We wouldn't want to lose our biggest supporters, would we? While unions were a good idea originally, the amount of political power unions wield in this country today is staggering. The California Teacher's Union, in Cali were I live, for example, makes it impossible let good teachers get higher pay and for bad teachers to be fired. Everyone has to have the same wage and be treated "equal" regardless of true capabilities.

Unions are just too powerful, and don't really help workers anymore. But why should Democrats care? When they eliminate the worker's right to a private vote on whether or not to unionize, then every union boss in this country can have a solid block of Democratic voters. Unions are deeply intrenched politically, and it's hard for someone with a wide perspective to see their real good for anyone today, along with plenty of bad.



I don't know where you're getting this form. I'm not a fan of unions (for some of the reasons you cite) but I haven't seen anyone in here defending the unions other than to correct the mis-information that is rampant about the UAW in these threads. And believe me, I'm no fan of them with provisions like paying workers for idle factories.

[dinaluvsApple]

If there's a depression going on, then we all know how well FDR's policies worked. They only prolonged the Great Depression by 10 years.

I notice certain people in these forums get rather ruffled when they see their precious unions in danger. We wouldn't want to lose our biggest supporters, would we? While unions were a good idea originally, the amount of political power unions wield in this country today is staggering. The California Teacher's Union, in Cali were I live, for example, makes it impossible let good teachers get higher pay and for bad teachers to be fired. Everyone has to have the same wage and be treated "equal" regardless of true capabilities.

Unions are just too powerful, and don't really help workers anymore. But why should Democrats care? When they eliminate the worker's right to a private vote on whether or not to unionize, then every union boss in this country can have a solid block of Democratic voters. Unions are deeply intrenched politically, and it's hard for someone with a wide perspective to see their real good for anyone today, along with plenty of bad.



The ultimate insult for a liberal, eh? Sounds like you got your line from MSNBC.

but beric, these auto workers, they are such skilled people and should have no problem finding jobs because of their vast experience, qualifications and post graduate degrees. surely there is a huge market demand for their services.





oh wait.....

[danny_w]

It looks like the Senate just shot themselves in the foot on this issue. They had a chance to pass a loan package that had some real constraints and oversight built into it. Now it looks like Bush may well sidestep them all and take the money out of the $700Bln financial fund, and they won't get the constraints and oversight that they would have gotten with the Senate bill. I may not fully agree with the loans and rewarding the Big 3 for failure, but at this point I don't think our economy could withstand the collapse of GM, Chrysler, and Ford (and if just GM goes then the others will almost assuredly follow) so I don't see that inaction is a viable option.

[leekohler]

The ultimate insult for a liberal, eh? Sounds like you got your line from MSNBC.

And once again, all you can do is throw labels around. :rolleyes:

[CalBoy]

Unions are just too powerful, and don't really help workers anymore.

I'd say they help workers plenty by helping them negotiate higher salaries and better retirement benefits. It's no secret that union workers make more than non-union workers. That's a clear benefit for the standard worker.

But why should Democrats care? When they eliminate the worker's right to a private vote on whether or not to unionize, then every union boss in this country can have a solid block of Democratic voters. Unions are deeply intrenched politically, and it's hard for someone with a wide perspective to see their real good for anyone today, along with plenty of bad.

We could say the same about Republicans and business interests, both of which are as deeply intrenched as Democrats and labor. The difference? Business is much more organized and uniform across the board to the point where they can hold back changes in workers' rights/protections. Unions help to balance the odds, even if only a little.

Considering the pay ratio of executives and the average worker today relative to the past, I'd say the unions are pretty much losing (and as a result, so are the nearly 200 million workers in this country).

[leekohler]

I

Considering the pay ratio of executives and the average worker today relative to the past, I'd say the unions are pretty much losing (and as a result, so are the nearly 200 million workers in this country).


And look how well that's worked out for workers. :mad:

[RamblinWreck]

http://buffalobeast.com/133/bigthree.jpg

Sorry....I couldn't resist.

[KingYaba]

Now to buying a car from a company in bankruptcy. What's the risk there? Well, let's say you buy a $25,000 car. Will the three year warranty be honored or will the company be gone? Will parts be available or will the parts suppliers also be taken down? If the dealer is also taken down, will I have access to a competent service facility? What is the resale value of my car? Will competitive financing be available for a car in this situation?

There will be parts and there are third party warranties. There are thousands of shops who service GM and Ford vehicles on top of their Japanese, Korean and European counterparts. Those aren't disappearing over night.

Financing? Those cars will be priced to sell...

[itcheroni]

Fact: There is no such thing as the free market. We have regulations on safety, ingredients, price fixing... you name it. In a pure free market, all the dice are loaded in favour of the producer, not the consumer. In a purely free market, producers would be free to pollute, free to ignore standards, free to monopolise.

The Anglo-Saxon Tory-Republican notion free market mantra is a complete myth propagated by those who it rewards and that myth appeals to those of ideological purity and simplicity, which ignores the interconnectedness of all economic activity.

It's instructive to note that of all EU countries, the UK is said to be the currently worst-hit by this economic crisis; an economy that has largely followed the same lines. Blair's government was much the same as Clintons', tinkering around the edge of neo-liberal policy while Germany was laughing quietly...

I suppose what I meant to say was that there is no country even close to being free. I wouldn't want a completely free market either but a minimally intrusive government doesn't exist either. The US used to be minimally intrusive but now we are very far from it.

Some economists who support free market, laissez-faire systems are the very ones who warned about the housing bubble.

http://www.youtube.com/watch?v=2I0QN-FYkpw

[itcheroni]

It would likely be worse. Let's not forget that our current problem is due to the result of a variety of "laissez-faire is best" policies.

The Federal Reserve isn't private, it's quasi-public. More importantly, all of its key leaders are appointed by the President and confirmed by the Senate.

Besides, the Fed can't "print" money.

Aside from that, the Fed's independence gives it immunity from political pressure. Would we really want interest rates to fall just because an election is around the corner?

Who prints the money then?

Our current problems are due to a combination of factors, and I think it's wrong to blame just one aspect. It's true that be would not have mortgage-backed securities sucking us into a hole right now if not for huge deregulation in the housing market. That deregulation combined with Greenspan's move to lower the interest rate to a ridiculous low in order to get Bush reelected in 2004. The tech bubble had burst and the small recession we had should have been bigger but Bush didn't want it happening before the election. All the money that used to go into T-bills went searching for another source of investment and found one in mortgage-backed securities. And wasn't deregulation in the housing market also backed heavily by Dems? They supported the idea of everyone being able to own a home.

[CalBoy]

Who prints the money then?

The Bureau of Engraving and Printing.

The Fed can choose to undertake more deposits from the market (they can also coerce banks to do this), which would lead to more or less money in the market depending on the action taken.

In truth it is Congress which "prints" money because it can bond out endlessly.

And wasn't deregulation in the housing market also backed heavily by Dems? They supported the idea of everyone being able to own a home.

Both parties backed the repeal of Glass-Steagall in the 1990s; they had both assumed it had outlived its usefulness. In truth though, many things went wrong for our current situation to have happened. The underlying trend in all of them, however, was the notion that laissez-faire would take care of us all. Will we learn our lesson this time, or is this going to happen in another 80 years?

[leekohler]

Will we learn our lesson this time, or is this going to happen in another 80 years?

No- the Republicans will be obstructionists to avoid looking bad. We won't learn a thing. They'll also start an investigation to see if Obama is getting BJs in the White House. Think I'm wrong? Just wait. They already can't believe he's a natural born citizen. If you think that's ridiculous, strap yourself in. It's going to be a long ride.

[CalBoy]

No- the Republicans will be obstructionists to avoid looking bad. We won't learn a thing. They'll also start an investigation to see if Obama is getting BJs in the White House. Think I'm wrong? Just wait. They already can't believe he's a natural born citizen. If you think that's ridiculous, strap yourself in. It's going to be a long ride.

Oh I know it Lee. They're already trying to link Obama to the governor of Illinois, even though he was clearly recorded on tape as saying that Obama wouldn't do a thing for him, and to "****** him."

But of course we should let the news cycle be dominated by this, not the fact that thousands of jobs keep disappearing. :rolleyes:

[leekohler]

Oh I know it Lee. They're already trying to link Obama to the governor of Illinois, even though he was clearly recorded on tape as saying that Obama wouldn't do a thing for him, and to "****** him."

But of course we should let the news cycle be dominated by this, not the fact that thousands of jobs keep disappearing. :rolleyes:

Well of course. Nothing will come of that, because nothing is there. But they'll keep going. Never mind the fact that they cried foul every time someone wanted Bush investigated for legitimate reasons. :rolleyes:

And in the meantime, the economy will continue to tank. I really hope people pay attention to their dirty tricks for a change.

[Blue Velvet]

18 Republican senators voted for a $700 billion bank bailout, but against a $14 billion package to keep the car industry from collapsing.

And yet the premise of this absurd and ideologically short-sighted thread would like us to believe that they're heros, every one of them.

The revisionism and twisting of facts is much the same as we've seen over the last eight years. The notion that low income earners and multiculturalism somehow caused the collapse of the global economy is the biggest line of hooey from the people that can't bear to acknowledge who has been in control for the last eight years, let alone accept responsibility for the state of things.

You’ll hear some on the right point to certain actions by the government itself—such as the Community Reinvestment Act, which requires banks to make mortgage money available in low-income neighborhoods. (Defaults on C.R.A. lending were actually much lower than on other lending.) There has been much finger-pointing at Fannie Mae and Freddie Mac, the two huge mortgage lenders, which were originally government-owned. But in fact they came late to the subprime game, and their problem was similar to that of the private sector: their C.E.O.’s had the same perverse incentive to indulge in gambling.

http://www.vanityfair.com/magazine/2009/01/stiglitz200901?currentPage=1


And let's not forget the cost of being in Iraq, the total of which is in the trillions... and for what? There's no hiding from the fact the last eight years have been an utter disaster. And now all of a sudden it's the unions fault? This shows the paucity of ideas in conservatism; the kneejerk reaction is to move to the right. Well, that was soundly rejected in November.

[leekohler]

And let's not forget the cost of being in Iraq, the total of which is in the trillions... and for what? There's no hiding from the fact the last eight years have been an utter disaster. And now all of a sudden it's the unions fault? This shows the paucity of ideas in conservatism; the kneejerk reaction is to move to the right. Well, that was soundly rejected in November.

Not to be nasty, but what it really shows is the short memories and lack of intelligence amongst much of our population.

[itcheroni]

The Bureau of Engraving and Printing.

I'm confused. I wasn't talking about who literally prints our money.



The Fed can choose to undertake more deposits from the market (they can also coerce banks to do this), which would lead to more or less money in the market depending on the action taken.

In truth it is Congress which "prints" money because it can bond out endlessly.


Both parties backed the repeal of Glass-Steagall in the 1990s; they had both assumed it had outlived its usefulness. In truth though, many things went wrong for our current situation to have happened. The underlying trend in all of them, however, was the notion that laissez-faire would take care of us all. Will we learn our lesson this time, or is this going to happen in another 80 years?


If the Gov required disclosure in the credit default swap market and the banks couldn't sell their mortgages immediately after issuing them, this wouldn't have happened either. It's not all or none; a happy medium makes a good economy, except my happy medium leans more towards the laissez-faire side. Every economic crash has been a cause of both the free market and government policies working together.

[Blue Velvet]

More of this 'victory', this approach to government from people who don't believe in government. Which begs the question why they run in the first place...


I don't think it'll be hard to explain why Senate Republicans had the final say: that's what the Constitution and Senate rules require. How else would we have passed anything?

I do think it'll be hard for Senate Republicans to explain themselves.

They were invited, repeatedly, to participate in more than a week of negotiations with a Republican White House. They declined.

They were asked to provide an alternative bill. They refused.

Finally, one of their members - Senator Corker of Tennessee - participated in a day-long negotiation with Senate Democrats, the UAW, and bondholders. Everyone made major concessions. Democrats gave up efficiency and emissions standards. UAW accepted major benefit cuts and agreed to reduce workers' wages. Bondholders signed off on a serious haircut. But when Senator Corker took the deal back to the Republican Conference, they argued for two hours and ultimately rejected it.

Why? Because they wanted the federal government to forcibly reduce the wages of American workers within the next 12 months.

Heard this morning that President Bush may still use TARP money to rescue the automakers. He reportedly doesn't want to end up as the next Hoover.

http://www.talkingpointsmemo.com/archives/247855.php

[leekohler]

More of this 'victory', this approach to government from people who don't believe in government. Which begs the question why they run in the first place...

Oh yeah- so much for Republicans being for the "free market". "Forcibly reduce wages"? My god, that's frightening! These fools wouldn't even guarantee us that CEOs of the banks we bailed out would see reduction in pay! They're so full of s*** it's stupid.

[bradl]

Chapter 11.

Numerous airlines were in Ch11 and people still flew on them. How many times was UAUA in chapter 11? Did those people lose their jobs? Did people stop flying United?


Actually, they did.

Flight Attendants Union, AOPA, various pilots unions, mechanics union, all of them made serious concessions after 9/11, including job losses, cuts in pay, and reductions in fleet capacity, to keep the airline barely solvent. Some airlines went into Ch. 11, came out, and went back into it again within a 2 - 3 year period (Continental, United, American, Delta, Northwest, Frontier, Sun Country, Champion, ATA.. as a student pilot, I follow the aviation industry rather close).. And that was including with borrowed money from the government. Some airlines, even with those concessions, didn't make it (National, Reno Air, WinAir, Canada 3000, Royal, TWA, Canadian..). Tons of pilots furloughed, revenue lost, massive overhead to still pay, and people stopped flying. If you remember, the only ones that kept flying and actually made a profit in N. America during the time when airlines were under seige (not including now) were Southwest and WestJet, as Westjet followed the Southwest model, and they are STILL making a profit, even now because people flocked to them from their offering of cheaper services in more frequent flights, than others offering of full services on bigger planes less often. Why do you think United, in terms of their bankruptcies and eventual bailout that they dumped their old gas guzzling B737-400s, DC10s, and B727s for a sleeker fleet? American did the same by dropping their MD80s for newer B737-800s. Continental did the same. Mergers all over the place; Southwest pretty much bailing out ATA, who went under anyway. Delta buying out Northwest.


Definitely not a valid comparison here, as there is a hell of a lot that you're not seeing, or don't have knowledge of.

BL.

[Thomas Veil]

If there's a depression going on, then we all know how well FDR's policies worked. They only prolonged the Great Depression by 10 years.Where did you get that from?

but beric, these auto workers, they are such skilled people and should have no problem finding jobs because of their vast experience, qualifications and post graduate degrees. surely there is a huge market demand for their services.





oh wait.....While it's obvious you're being sarcastic, the point you're trying to make is clear as mud. It almost sounds like you're making the liberals' point for them.

[Schtumple]

I really don't understand how Ford and GM are doing so badly in the states when they appear to be happily trundling along here...

Different ideologies I guess...

One side loves the gas guzzling 4x4s
The other makes actual practical vehicles

Fiesta, Escort, Mondeo, Focus, they've had a consistent line up of good cars, designed for real people...

[gotzero]

I really don't understand how Ford and GM are doing so badly in the states when they appear to be happily trundling along here...

Different ideologies I guess...

One side loves the gas guzzling 4x4s
The other makes actual practical vehicles

Fiesta, Escort, Mondeo, Focus, they've had a consistent line up of good cars, designed for real people...

The Ford lineup actually seems pretty desirable outside of the states. They say it is because of emissions standards, but I have a lot of trouble buying that. They could put the US engines in the Euro frames and still have more attractive, more solid cars. I would love to get my hands on a Focus ST!

[hulugu]

One goes down they all do, if GM files bankruptcy and slow payment to their suppliers -- those suppliers will switch to COD or also file bankruptcy.

Since the big three tend to share suppliers these days, it may cause a big ripple in the entire US auto industry.

Simply changing the terms on the Ford suppliers can mean a major cash crisis for them and may cause their bankruptcy.

Lack of parts or lack or cash aren't very good when you are hurting, and may mean even popular models may end up in short supply.

There will be parts and there are third party warranties. There are thousands of shops who service GM and Ford vehicles on top of their Japanese, Korean and European counterparts. Those aren't disappearing over night.

Financing? Those cars will be priced to sell...

As I understand it, the failure of Detroit will cause a ripple-effect that may shut-down many of the parts suppliers, including those who also serve the Transplant companies (Honda, Toyota, etc.). This may have the effect of limiting the supplies of fabric for seats, injection-molded parts for interiors, and other small parts, or increasing prices.

Furthermore, in researching, it appears that both GM and Chrysler can apply for TARP funds because of their relationship to GMAC. The troubled bank is owned by GM and Cerebus who owns Chrysler.
I'm wondering how this might work and what would happen to GMAC—and its loans—if the auto-companies falter.

[joepunk]

LINK (http://thenewshole.msnbc.msn.com/archive/2008/12/12/1713569.aspx)

Countdown has obtained a memo entitled "Action Alert - Auto Bailout," and sent Wednesday at 9:12am, to Senate Republicans. The names of the sender(s) and recipient(s) have been redacted in the copy Countdown obtained. The Los Angeles Times reported that it was circulated among Senate Republicans. The brief memo outlines internal political strategy on the bailout, including the view that defeating the bailout represents a "first shot against organized labor." Senate Republicans blocked passage of the bailout late Thursday night, over its insistence on an immediate union pay cut.

Here's the Memo...

From:
Sent: Wednesday, December 10, 2008 9:12 AM
To:
Subject: Action Alert -- Auto Bailout

Today at noon, Senators Ensign, Shelby, Coburn and DeMint will hold a press conference in the Senate Radio/TV Gallery. They would appreciate our support through messaging and attending the press conference, if possible. The message they want us to deliver is:

1. This is the democrats first opportunity to payoff organized labor after the election. This is a precursor to card check and other items. Republicans should stand firm and take their first shot against organized labor, instead of taking their first blow from it.

2. This rush to judgment is the same thing that happened with the TARP. Members did not have an opportunity to read or digest the legislation and therefore could not understand the consequences of it. We should not rush to pass this because Detroit says the sky is falling.


The sooner you can have press releases and documents like this in the hands of members and the press, the better. Please contact me if you need additional information. Again, the hardest thing for the democrats to do is get 60 votes. If we can hold the Republicans, we can beat this.


Note that the person capitalized the word "Republican" but didn't capitalize "Democrat".