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First You Were Against the Bailout Before You Were For It


1936 Chrysler Airflow Series C-9

These days I sometimes feel like I am living in a psychosis.  I have been absolutely opposed to the financial sector bailout from the beginning.  Our government freaked out and reacted poorly.  Too much money was approved with too little oversight for an industry that has become too big and monopolized for its britches.  I favor using government to restructure mortgage obligations and setting up a RTC (remember that) type of entity that will hold and resell foreclosed properties.

Now comes the automaker bailout.  While I do not favor handing the big three a blank check, it seems the ramifications of letting these industries file bankruptcy and stiff everyone are too serious to ignore.

Once again it seems the our government is reacting poorly to the crisis.  Making a loan to Chrysler during the Iacocca days worked out OK didn’t it?  Why can’t we do the same thing again for all three of them?  All of the car companies including Toyota and Honda have had hefty declines in their revenues.

While the domestic automakers have been hit hardest, all manufacturers have seen sharp drops in sales. Toyota’s sales were down 23.0 percent compared with its year ago levels. Honda’s sales were down 25.2 percent, and Nissan’s sales fell 33.0 percent.

Since this is an industry wide problem and not just an American automaker problem, where is our government when you need them to help strengthen our economy and our domestic industries?  Is the fallout from failure of a few financial giants so much more important than ensuring the survival of millions of American jobs in the auto related industries?

Or perhaps this is a disguised union busting tactic? If the automakers go under, Toyota, Honda and other car makers will be able to cannibalize their revenues while using non-union labor to produce their cars.

In any event, it seems to me that the old adage, As goes GM, so goes the country, is more true today than ever.  Do we really want to cede another industry to foreign manufacturers?  Unless we help out our automakers, we may soon find that the only thing America makes anymore is payday loans.

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This entry was written by John and posted on November 20, 2008 at 9:30 am and filed under Congress, Economic justice, Fiscal policy. Bookmark the permalink. Follow any comments here with the RSS feed for this post. Print This Post Print This Post . Post a comment or leave a trackback: Trackback URL.

One Comment

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  1. What I find amazing is that nobody is mentioning Ford’s 65+MPG, 5 passenger car that they WON’T sell in the USA. Why should the taxpayers bail out the auto companies when they keep shafting the consumers?

    I do realize that many jobs are dependent on the big 3, but when management, such as Ford’s, are opposing selling economic sound vehicles, with such good MPG, it does make a person wonder. I also remember the VW diesel car back in the 70’s that was getting over 50 MPG. They also disappeared.

    The big 3 have had the knowledge to manufacture autos that would have excellent MPG for many years, and yet they have not put them on the market. Now they want my tax money to help them with their golden parachutes? NO WAY.

    And yes, it’s probably a union busting idea they are trying to use. Labor cost is not the problem, as they want you to believe it is, management, gov’t red tape, and the oil companies are the problem, but like everything else, the unionized labor force gets the blame.

    [Reply]

    JohnNo Gravatar posted a reply on November 21st, 2008 at 10:14 am:

    Here are some afterthoughts to my post.

    Why is it OK to require the car companies to come up for a plan to turn themselves around before giving them government assistance but nothing similar is being required of the banks, insurance companies, investment houses, etc?

    Why was it urgent to get immediate funds to the financial oligopolies but Congress is taking their time with the potential failure of the car companies?

    It seems to me we continue to have a bunch of ineptitude haunting us in D.C. and unfortunately we have no one to blame but ourselves because we put them there.

    I just wish somehow we could eliminate Congress or at least 99% of the people that work there and start over with some people that know what they are doing. After all isn’t that what happens in failing corporations? Management is fired and new management is put in to straighten things out.

    We need new management in Congress not just a new party in control.

    [Reply]

    1. Above written by AllenNo Gravatar on November 21st, 2008 at 6:27 am (replies, if any, are attributed separately above).
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