You don’t suppose Michigan could respond by, oh I don’t know… CHANGING the laws? Maybe be a little more business friendly? They’ve got a lot of empty commercial real-estate in Detroit - how about declaring a tax holiday on it, exempting employers who move into the city from union rules, and in general changing their economic climate so that they are attractive to business?
In a global economy (or even a large national one), you don’t have the luxury of laying excessive burden on local business in the interest of what you believe is economic ‘fairness’. You’ll simply run off all your corporations. That is what happened to Michigan. It’s a very expensive place to do business, so business doesn’t get done there any more. Rather than bailing out such foolhardiness, they needs to change.
I remember when I was doing the trade-show rounds with my company - at the time, the trade show business was abandoning New York and New Jersey with lightning speed, and setting up in places like Atlanta. Why? Because the unions priced themselves out of the business. I remember working the numbers on a trade show I was going to attend - the stupid union rules that forbade me from carrying my own equipment into the show made it almost twice as expensive to attend that show than others. So I set up my display at other shows. There were also horror stories about kickbacks and shakedown operations - you had to grease the right palms, or your $5,000 computer might ‘accidentally’ fall off the truck and be damaged.
It got so bad in the 1990’s that the Javits Center closed down for large parts of the year because they couldn’t attract any shows. There were stories of tradeshow exhibitors being intimidated and hassled for things like plugging their own lamp into a socket - the job of an electrician at $50 per plug.
You can set up whatever onerous rules you like, and demand as high a salary as you want, but Detroit is now learning what happens when you can’t force people to pay it.
There’s no way you can consider ME upper class. I don’t have a mansion, but a modest house with one functional bathroom. My newest car is 30 years old. The only jet I own is the shower in my bath, when the water pressure is high enough to not be a trickle. But I pay a helofalot of taxes, and I don’t get to say where that money goes. Am I overburdened? I sure think so. Making ends meet is my highest priority, and yes, the government (not just federal) is bleeding me dry.
No way you can twist my statements into support for George Bush, either I or II. No way I support USA taxpayers policing other countries. No way I support private industry gobbling at the pig trough of tax dollars to reconstruct Iraq or any other pet Bush foreign project. No way the USA courts, empowered to support the US Constitution, can be bastardized to adjudicate some other political or legal system.
Changing the laws is one thing, changing those governed by them is quite another. I have no love for unions, and I think their cause would be better served by organizing labor in other countries, rather than by obsessing about it here. Change the laws all you want, but it will take at least a generation or more before folks in Michigan will lose their love of unions, even if those plants close. And the economic drag on the nation caused by the rampant unemployment in that region will hinder the growth of the US the entire time.
Bailout or no, things will change. It is merely a question of how. Killing one or more of the Big Three during the current economic downturn will make things worse, not better.
Big deal. Because of their large size, status, and cultural events, New York and New Jersey will always be able to command a premium in things like the trade show circuit. I’m sure as more and more conventions moved into places like Atlanta, the prices in those places rose as well. Laws of supply and demand affect everything sooner or later.
You don’t think similar things happen in non-union areas? I’ve got a buddy who spent several decades in the beer distribution business in the Nashville area (which is strongly anti-union, BTW), he’s related stories to me of having to pay graft and kickbacks for things as simple as plugging in a neon sign, because somebody in the local codes office, or some other busybody, wanted a little extra money.
Detroit is not the only automotive center that is suffering, however. Car makers in Europe (and not just the US owned puppets) are asking for financial help from their governments, and Chinese government is throwing money at their domestic automakers. Even the Japanese are said to be considering the idea. Economists are saying that the US financial problems are only now starting to seriously ripple through the global economy, what happens when the rest of the world starts feeling the full effects? The foreclosure rate for folks without subprime mortgages is starting to climb in the US, which is a bigger threat to our economy than the subprime losses are. If a building is on fire with people trapped inside, the firemen don’t stand around outside because they’re concerned that the building isn’t up to codes. They rush in, fight the fire and get the people out. Once the fire’s been extinguished and the people are saved, then they look at what caused the fire and who to punish for what happened.
Good thing you don’t live in Europe, then. Where taxes and wages are higher.
Who said I was trying to claim you were supportive of Bush’s policies? I was merely pointing out that your statement of us not being able to privatize the police and the military was wrong. One would hope that people have seen the error of such efforts, but I am not optimistic. Too many people are clinging to the idealized libertarian society (which is as utterly impossible to have as is an idealized socialist/communist one) for me to think that.
Small government is an excellent idea, and in many ways doable, but we can never trim the government down to the size it was when this nation demands it. The simple fact that the size of the country today (both in terms of land and population) is so much greater, as opposed to what it was in 1789, prohibit this. As do technological and economic concerns. What this nation should do, and is not, is toss aside strict ideology and look at what we can do to ensure that the government is providing the best foundation for growth of this nation. Until that day comes (and it isn’t even on the horizon at this moment), we will never achieve the greatness of which we are capable.
Where the heck do those college kids in their basements get the actual news on their websites? Most of the times, if you follow the links, it leads back to a newspaper’s web site in the end. Without the newspapers, who will do the actual reporting?
Should we bail out industries like, for example, VCR manufacturers, when the product is no longer sought after?
A new product is on the market: The DVD player.
Let’s say that the VCR production line has a very strong union. The union refuses any type of concession despite the fact that VCRs are no longer selling and the company may go out of business without changing it’s business model.
Would it make sense to bail out VCR makers and allow them to continue making their product? If we don’t, the tape manufacturers would suffer, the tape distributors would suffer, all the industries that manufacture components for the VCR would suffer. The VCR repair shops would close down. We’d be punishing thousands for the poor business sense of a few on top.
But the public doesn’t want VCRs any more. We bail out the makers and there are thousands of VCRs manufactured that no one wants to buy.
Am I wrong in comparing the American auto product to the VCR?
I’ve done an informal poll of folks I know - not one would buy a Ford or GM product even if there is a bail out.
I’m not unsympathetic to those who will lose their jobs if there’s no bail out, but I feel as though it’s just putting off the inevitable unless the product changes drastically.
I see the big 3 as I see VCR makers. Am I totally off base?
Press releases. This is especially true of the “fandom news sites” (TV, movies, music, DVDs, video games, science fiction, comic books, etc) that are started by the college crowd. Getting the news requires little more than the ability to hit refresh on the press release database pages.
For real news (like the economy or government or other serious topics), sites like CNN will never go away.
Trust me, the news industry would move along just fine without newspapers.
What gets me is the extent to which newspapers and TV news rely on press releases. Every time you turn around there’s some press-release-driven story on plastic surgery or similar drivel. We need the press to keep an eye on business and government, but I don’t feel confident we have a workable model to get that paid for as dead-tree newspapers go into decline.
Oh for God’s sake. The Chinese reference was rhetorical. I thought that was obvious. The point was that we don’t want to have to depend on someone else for our war needs.
And I’ll say again, how much of your salary or wealth do you wish to contribute towards propping up obsolete industries in the off chance that we might need them to start a war? How much is it worth to you?
Steel is a far better analogy. Global steel consumption continues to rise - but the legacy producers in the US and Europe died on their arse decades ago. Why? Because they didn’t invest in cost-reducing technology and they didn’t invest in supplying the kind of steels their customers wanted. Instead they kept on armies of low-tech workers making high-cost steel in uneconomic places. Pretty much the same story with coal.
GM/Chrysler look to be turning into the British Leyland of the 21st Century. Bummer.
I submit that the 700 billion dollars is rapidly becoming the new Godwin’s Law. In this case it’s pretty obvious to infer that the person Tao is replying to was not in favor of the banking bailout, so why bring that up? (Unless they are and misspoke.)
from:motor-trade-insider.com
*The new car sales figures for November 2008 are in. Judge for yourself the current state of the motor industry in this country…
New car registrations fell 36.8% in November to 100,333 units.
Year-to-date volume is down 10.7% to 2,023,104 units.
Diesel market share achieved record high of 47.0% in November.
Private market particularly weak in November, down 45.1%.*
If the production lines continue with business as usual, there will be a glut of new cars manufactured with no one to buy them. I feel that many of the cars manufactured by the big 3 “are mostly obsolete”.
The buggy whip and horse carriage industrial complex collapsed when the automobile started to become popular and nobody did anything to save them. Actually I believe some of the horse coach manufacturers began to make automobiles although I’m not sure many were very successful at it.
I think there is a lot of hyperbole here. GM has been around of 100 years and after 5 months of bad sales they are ready to throw in the towel? That doesn’t make any sense. Economic downturns happen all the time and large companies have to be prepared for them. If they can’t borrow the money they need to have enough cash to survive. What has GM been spending their billions of dollars a year on? Certainly not developing world class cars and trucks to compete with the Japanese and Germans. BTW I dont’ see Toyota, Honda or Mercedes asking for a bailout… do you?
It’s strange how Ford, which as I understand it also makes cars and trucks, isn’t on the verge of bankruptcy like GM and Ford. Is the economic downturn not impacting Ford? No, Ford is just in a better financial situation to weather the storm than the others.
If everyone who is worried about GM going under just went out a purchased a GM car then they wouldn’t be talking about bankruptcy. I find is ironic that all of the Prius owning folks are so concerned about GM and Chrysler going out of business…
Studebaker springs to mind. Many of the various coachbuilders started out life as building horse coaches and not car coaches. Of course, most of those companies weren’t multi-national corporations, but small, family run businesses, and their unemployed workers could be easily absorbed by the booming automotive industry. Kind of hard to do that now.
GMs not been all that financially stable for quite some time, now. The current economic crisis might well turn out to be the nail in the coffin for at least one or more of the Big Three. Both the Japanese and German governments are considering stimulous packages which would help their auto industries, so while Toyota, Honda, and Mercedes aren’t asking for direct cash infusions (yet), they’re certainly saying they could use a boost. Bear in mind that the automotive industry as a whole has a problem with overcapacity, and has had so since before the current meltdown. Projections for new automobile sales are currently sitting at almost half what they were a few years ago. That’s a huge loss to try and absorb all at once.
Ford’s currently in better shape than the other Big Three because they managed to secure large loans before this happened (which they needed because it looked like they were going to go under while GM and Chrysler were “fine”). Those loans get called in, or turn out to be not enough, then they’re screwed.
Problem is: People aren’t buying cars! Not domestic, not imported. Toyota’s sales have plunged 50% in recent weeks, and the other foreign makers have seen similar drops. The vehicles they are selling are almost all being offered with some kind of financial incentive to get them off the lot, which eats into the profit margins. My mother recently retired from a Honda dealership, and according to her, inventory levels of unsold cars at the dealership were higher than they’d ever been in the thirty years she worked for the place.
Damn straight. If only a few high-cost, uneconomic, value-destroying producers would go bust. That would clear out the overcapacity and allow those companies who can make decent cars efficiently to earn an economic return. Instead we’re heading for the same state the airlines are in - an entire industry of zombies, lurching from loss to loss to bankruptcy to resturcturing to more losses, with the odd quarter of profitability every now and again.