Election 2008

[NDTeve]

GM and Chrysler will not be allowed to fail by the Dems.  They will create money out of thin air and drive the overall economy into hyperinflation before they allow those companies to fail.  Either way people will be furious and the Dems will blame George Bush.

Lets be fair here. Many Repubs were behind these bailouts as well.

[jlbomega]

Lets be fair here. Many Repubs were behind these bailouts as well.

I know, but it further highlights the stupidity of Republicans who decided not to be economic conservatives and became "liberal lite".  The union auto workers vote heavily democrat anyway, so the Republicans don't have much to gain from supporting corporate welfare for the auto industry.

[mean]

I know, but it further highlights the stupidity of Republicans who decided not to be economic conservatives and became "liberal lite".  The union auto workers vote heavily democrat anyway, so the Republicans don't have much to gain from supporting corporate welfare for the auto industry.

Hate to break it to you, but Repubs as we know them today would never allow GM or Chrysler to fail. I'm not even sure the mythological "fiscal conservative" would have, when it came down to choosing between directly screwing a ton of Americans out of jobs or indirectly screwing all Americans by bailing out the corporations.

It's easy for "rogue capitalists" in Congress to vote against bailouts to maintain their fiscal conservative street cred, when they know they're going to pass anyway.

[zlohban]

Neither a pub or dem president can afford to bail out these cash burners. As of today's report GM is burning through 3.1m every HOUR and Ford through 3.5m every hour. Almost a thousand dollar bill a second! POOF Gone!

[Highlander]

Neither a pub or dem president can afford to bail out these cash burners. As of today's report GM is burning through 3.1m every HOUR and Ford through 3.5m every hour. Almost a thousand dollar bill a second! POOF Gone!

I don't understand why Ford and GM are not better competitors.  They had a huge advantage in the SUV market given they were protected by a higher import tax on light trucks than on standard vehicles (although many foriegn companies now manufacture these vehicles in the US too).  I suspect they live and die on SUV sales because of the better profit margin it brings relative to other vehicles.  I suspect we will be bailing out the auto industry because 1 out of 6 jobs in the US are supposedly tied to the industry, an incredibly high proportion.       

[staubio]

I don't understand why Ford and GM are not better competitors.  They had a huge advantage in the SUV market given they were protected by a higher import tax on light trucks than on standard vehicles (although many foriegn companies now manufacture these vehicles in the US too).  I suspect they live and die on SUV sales because of the better profit margin it brings relative to other vehicles.  I suspect we will be bailing out the auto industry because 1 out of 6 jobs in the US are supposedly tied to the industry, an incredibly high proportion.       

How long can we prop it up? Does anyone see hope for the auto industry as it is? It is putting good money after a losing cause when we could invest in new industries to secure jobs with a future?

[KCMax]

I don't understand why Ford and GM are not better competitors.  They had a huge advantage in the SUV market given they were protected by a higher import tax on light trucks than on standard vehicles (although many foriegn companies now manufacture these vehicles in the US too).  I suspect they live and die on SUV sales because of the better profit margin it brings relative to other vehicles.  I suspect we will be bailing out the auto industry because 1 out of 6 jobs in the US are supposedly tied to the industry, an incredibly high proportion.       

I suspect paying for health care, while Japan and Germany have the governments, not the car companies, pay for health care is a huge expense. There are also legacy costs like pensions that are a huge expense that the automakers promised way back in the day not thinking that people would live longer or suspecting that it would eat up so much revenue.

That, and they seem to make bulky gas guzzling cars that are going out of fashion and have a reputation for making ugly sedans of low quality.

[jlbomega]

There are also legacy costs like pensions that are a huge expense that the automakers promised way back in the day not thinking that people would live longer or suspecting that it would eat up so much revenue.

So you are saying the unions are part of the problem?

[KCMax]

So you are saying the unions are part of the problem?

Sure, they're part of it, but of course management offered these legacy costs in exchange for other things like higher salaries at the time because they wanted to cut costs at the time and pass the costs on down the road. Unions have been very accommodating in cutting back some of the pensions and health care benefits to help out management. But ultimately management is much more to blame for being so short-sighted.

[Maitre D]

As a wise industry man said last nite on CNBC:  "What about blaming our own state governments?  We have Southern states subsidizing foreign makers so they can bring $17/hr jobs to their towns, cannibalizing the $28/hr jobs in Detroit."

[jlbomega]

As a wise industry man said last nite on CNBC:  "What about blaming our own state governments?   We have Southern states subsidizing foreign makers so they can bring $17/hr jobs to their towns, cannibalizing the $28/hr jobs in Detroit."

That is a good point.  Interesting that many of those Southern States are run by conservatives and realize what market forces mean and realize $17/hr jobs are better than no jobs at all. 

[KCMax]

That is a good point.  Interesting that many of those Southern States are run by conservatives and realize what market forces mean and realize $17/hr jobs are better than no jobs at all. 

I'm not sure what southern states you're talking about - Mississippi, Alabama, Louisiana, Tennessee and North Carolina all have Dem dominated legislatures.

[ComandanteCero]

Market forces =  tax incentives?

[Highlander]

I suspect paying for health care, while Japan and Germany have the governments, not the car companies, pay for health care is a huge expense. There are also legacy costs like pensions that are a huge expense that the automakers promised way back in the day not thinking that people would live longer or suspecting that it would eat up so much revenue.

That, and they seem to make bulky gas guzzling cars that are going out of fashion and have a reputation for making ugly sedans of low quality.

True about customer choice, they are always behind with what the customer seems to want.  Car manufacturers in Germany and Japan are also highly taxed, probably to the point that it easily negates what American industry pays for health care.  Japanese and German health care is not free.  In addition to that, there are other costs they incur like well paid maternity leave up to 1 year in some European countires and 5 weeks paid vacation for all workers that American companies do not have to deal with.  I think what MD says has a lot to do with it, foriegn companies can sell cars (and especially SUV's without the import tax) in the US that are manufactured in southern states with lower labor cost than what is possible in the unionized north.

[KCFutbol]

So you are saying the unions are part of the problem?

Who could have ever guessed you'd be anti-union? 

[NDTeve]

Who could have ever guessed you'd be anti-union? 

Or that you'd be for them. Double Standard.

[KCFutbol]

Or that you'd be for them. Double Standard.

I'm a white collar worker for a company that employs union workers. They do a great job, a job most people wouldn't want to do or couldn't do. For this they deserve a decent wage and union representation.

[phna]

Were you trying to make a point, or just post a pretty chart?  Obama has proposed nearly a trillion dollars in new spending, cutting the defense budget by 25% still does not even get him close to paying for all of it.  So again... what is your point?

Yeah, the point is you continually anecdotally Opine.

Where is it said that only slashing the defense budget is the sole source for Obama spending, one source would be nice? And I gave one that shows exactly the opposite, and its not even a liberal site, it is a sensible site.

The facts given show $60billion (or more now since that is 2005 budget numbers) or 15%, not %25 could easily be taken out of the defense budget to provide money for things like SCHIP*, job retraining, k-12 education, humanitarian aid, and reducing foreign oil, the only spending items mentioned in the graph.

(*BUSH vetoed a bill to enhance SCHIP last year despite a bipartisan effort to pass it!)

Another statement you said was Military technology that was responsible for the swift victory in Iraq was directly challenged by the source I gave, but I don't think you read for facts that go contrary to your opinion.

It is a valid to question to ask how will Obama pay for his plans. But it is an entirely fallacious conclusion to assert as you do, that "liberals" think just cutting one area will support it. Prehaps that bloated government bureaucracy that Bush createe, F.A.T.A.S.S (the Federal Aviation Transportation Administration & Security Sector, or whatever it is called) could be trimmed down too, or is it too liberal for you?

Stop concluding anyone that pokes holes in the arguments made is a "liberal".

[Maitre D]

I think what MD says has a lot to do with it, foriegn companies can sell cars (and especially SUV's without the import tax) in the US that are manufactured in southern states with lower labor cost than what is possible in the unionized north.

The foreign companies realized they could set up shop in America and make cars here, cheaper than they could make them at home and pay the import taxes to get into this market.    Face it:  they make better designs and more reliable autos. 


George W got into a bit of trouble some time ago, for questioning whether Detroit was making "relevant" products anymore.  The fact is, everyone knows that's true.

[LenexatoKCMO]

The foreign companies realized they could set up shop in America and make cars here, cheaper than they could make them at home and pay the import taxes to get into this market.    Face it:  they make better designs and more reliable autos. 

The foreign companies started doing this about the same time the domestic makers started major investments in Canadian and Mexican production - also heavily dilluting the "buy American" brand. 

For the most part, the foreign makers are still only building cars here that have zero demand outside of north america - trucks, vans, old-folks oriented mushy sedans.  Most of the economic advantage of building them here is in reduced shipping.  Thus we won't actually be exporting any of these products anytime soon.