By on April 26, 2009

I used to worry that TTAC was too negative. I’d publish “good” news to try and balance-out our no-holds-bared criticism of Motown’s follies. At some point, I gave up trying to find a silver lining. It wasn’t simply the fact that there wasn’t one. Or that the news coming from Detroit became undeniably dire. It was more of a personal “come to Satan” moment when I realized that making people happy wasn’t my first, best destiny. My job: tell the messy, pay-no-attention-to-the-logical-fallacy-behind-that-PR-curtain truth about cars. But there are times, like now, on the cusp of Chrysler’s C11 (or worse), when I wonder what good can come of all this. Will we ever look back on this time and think that the Motown bailout was, somehow, a good thing?

The people [currently] in charge of propping-up Chrysler and GM would have you believe the federal bailout is accomplishing/will accomplish three main objectives. First, it lessens/postpones the impact of the automakers’ failure on the wider U.S. economy. Second, it protects American jobs (same as No. 1, but who’s voting anyway?). Third, it helps usher in a new era of environmentally-friendly vehicles, creating “green jobs” as hydrogen fuel cells—I mean “the electrification of the automobile” begins.

Of these, only the first is remotely credible, or, if you’re an electric vehicle booster, relevant. And when I say remotely credible, I mean it in a completely theoretical way. After all, how can we really know what the impact of a “uncontrolled” Chrysler and GM collapse would have been without actually experiencing it?

Whether true or not, the proposition that an earlier, non-governmental Chrysler and GM chapter 11 would have unleashed The Great Depression II is hardly what you call compelling. As I’ve mentioned before, only someone suffering from OCD believes that the lack of catastrophe is incontrovertible proof that questionable preventive measures were fully justified.

In other words, if Chrysler and GM’s collapse HAD triggered economic Armageddon, Americans would not have begrudged them their money. As it didn’t, over 70 percent now say your mother and I agree: enough is enough, Mr. Motown. No more loans for you, son. Or, more accurately, you lying, money-sucking, house wrecking, uninvited whore.

The ongoing Detroit bailout bodes badly for the American voters’ relationship with their elected officials.

But what about the bank bailouts, apologists cry. Beyond investing the money people give them, banks are a mystery to most folks. The auto industry they understand. They “get” that Chrysler and GM put itself in this mess by making products people don’t want to buy and/or not standing behind them (the cars) when they broke. They’ve figured out that Chrysler and GM are not victims of circumstance. Otherwise Ford would also be bellying-up to the bailout buffet.

Clearly, voters aren’t happy about Detroit’s welfare checks. They will be even less happy with the next round. And even less happy with the round after that.

Barack Obama and his Presidential Task Force on Automobiles (PTFOA) think it can overcome the public’s growing anger and resentment by appealing to their “can-do” American optimism. Forget the old Chicken Little routine. The PTFOA will sell the “new” Chrysler and/or GM as the second coming on wheels. It’s a new dawn it’s a new day it’s a new life and you should be feeeeeeling good. ‘Cause we’ll always be together, together in electric dreams.

No one will buy it. Literally. If GM and Chrysler had gone through a non-governmental bankruptcy back when they should have, when the U.S. new car market was healthy enough (circa 2005), consumers would have played second life with the damaged Detroit duo. Now? Nope. Sales will tumble. More federal funds will follow. The fed-up factor will flourish. And that’s a good thing.

Think of it this way: the Detroit bailout will sour Americans on government “investment” in private enterprise. Again, AIG what? Credit default huh? But John Q. Public will surely grasp the message coming from Washington re: the “new” Chrysler and/or GM. Their tax money is supposed to lead to dramatically better cars. Better than the opposition’s. ‘Cause that’s how you make money, right? Of course, that won’t happen within this administration’s first term; if only because carmaking requires a three to five-year development cycle. Not to mention all the other reasons.

The PTFOA’s inability to resurrect the automakers’ fortunes will not go unnoticed. With every new cash infusion in “our” car company or companies, with every lost point of market share or red ink-laden financial quarter, Obama’s wider plans for federal interventionism will lose appeal.

Of course, some will see this “failure is possible” scenario as a bad thing. The exception that screws-up the long overdue rules that would lead to a more equitable society for the average working man and woman. But then I have little time or sympathy for that kind of negative thinking.

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50 Comments on “Editorial: Bailout Watch 509: The Silver Lining...”


  • avatar
    kaleun

    I see the silver lining… C7 for Chrysler and C11 (and possibly C7 later) for GM. Hopefully without much more of my money. Hell, I even pay some tax money to just let the anti-car makers disappear. Yugo disappeared on its own, whit these (formerly) big players it needs some effort.

    As the comparison to the bank bailouts go, those don’t justify the Detroit bailouts. It’s like I can rob a bank and don’t get punished because someone else did rob a bank too and didn’t get punished either. Those bank bailouts were done wrong, but that doesn’t justify doing the Detroit bailout in addition.

  • avatar
    Rastus

    I love those Art Deco gargoyles which adorn the Chrysler Building. What a work of art (the entire building)…it’s spectacular to see in person for the first time. It was for me.

    It’s amazing, when a company is full of life, vigor, and the blood of capitalism is pulsating through its veins- what better way to show your strength via an erect phallus of gargantuan proportions.

    http://en.wikipedia.org/wiki/Chrysler_building

    I never studied Civil Engineering. Is anyone out there privy to how one would construct a limp phallus in concrete, steel, and glass? One with a diseased appearance?

  • avatar

    “the Detroit bailout will sour Americans on government “investment” in private enterprise.”

    I hope so, though folks seem pretty sour now. I guess that’s kind of a silver lining, if it happens. I think people are way more mad about bailing out the bankers, few people have the awareness of the auto industry to realize that they dug their own graves here.

    Anyway, I don’t know if the gov’t is too fond of Chrysler – too much private equity $. I think they’ll let Chrysler go down and liquidate if they don’t get all kissy-face with Fiat on the 30th. That said, I do think the gov’t is more committed to GM, and if the proper drastic action is taken – if they cut down to a few well-focused brands making quality cars – in a decade folks will forgive them for this federal investment. Especially if it all gets paid back w/ interest, like Chrysler in the 80′s.

    Chrysler’s demise will scare everyone straight for a bit, I hope. The gov’t couldn’t just let it fall like Lehman, which economists say was pretty much the worst thing ever (though I philosophically disagree; I’m no economist). If the precedent had been set when the house of cards started to fall that poorly-run institutions fail, come hell or high water, big banks or whatever, we’d be in a different position today. Hard to say if it would have been better.

  • avatar
    Rastus

    Now that I had my wise-ass moment above, I’d just like to say one thing.

    Capitalism works…and it works because it rewards wise decisions, investment, and it rewards honest undertakings.

    On the other hand, it ALSO WORKS because it DOES allow failure. Failure is SUPPOSED to occur!!! There is no shame in failure- failure is Capitalism at work, doing what Capitalism is supposed to do!

    What we are witnessing with the banks and with the U.S. auto-industry is VERY FRIGHTENING. It should really cause one to not only question the cash we are dumping in these corporations. No, it’s much bigger than that.

    The unstated claim in ALL of this is that Capitalism ITSELF is a failure!!! Yes, that is EXACTLY what they are stating.

    Do you understand what that means my friends???? Everything you’ve been taught to hold as dear, all of those “American” traits which we all cherish so much…all of that is out the door.

    Oh, you thought the POTUS firing Ricky-poo was a shot across the bow, do you?

    God help us all if they shove their “entire” agenda through. This is just the beginning. Mark my words.

    What is Socialism if not “the people” working for the “corporation”??? Don’t you see?…everything has been turned on end. Whereas a corporation once WORKED to EARN your business…now YOU work for THEM!!! Lovely how that turns out, isn’t it? The entire population of the U.S. now works for GM, Chrysler LLC, and a slew of banks!!!

  • avatar
    agenthex

    If the precedent had been set when the house of cards started to fall that poorly-run institutions fail, come hell or high water, big banks or whatever, we’d be in a different position today. Hard to say if it would have been better.

    I wonder if the people who think this apply the same rules in their own life:

    Little Timmy can’t read good, but screw remedial public education, he’s probably a tard anyway.

    My house is burning down, but I can’t trust that government fire department, better let it burn.

  • avatar
    kowsnofskia

    What’s the deal with Chrysler’s “demise” here, anyway? Apparently Chrysler and the CAW just came to some sort of agreement and everyone thinks it’s going to result in a bona fide Chrysler-Fiat deal.

    God, please don’t let this company be rescued to live on as a wandering zombie for the next decade. I don’t even see how Fiat could possibly save it at this point.

  • avatar
    Rastus

    Until very recently, I worked with an individual who was a volunteer fireman in an unincorporated part of the county.

    Listen, it has happened…those who chip in and break a sweat when it’s called of them …these are the same people whose homes still stand to this day.

    Those who sit idly by and expect things just to materialize…with no effort on their part whatsoever? Well, those are the people whose homes, when they catch fire.. usually burn to the ground.

    Yes, I’m proud to say there are still volunteer firemen around today. Not everyone just “expects” or “demands”, ok?

  • avatar
    mikeolan

    The problem here is that if the market consolidates, consumers get fewer choices. GM and Chrysler don’t get a whole lot of defenders on this forum, but in the real world they’ve got plenty. It’s easy for “pistonheads” to defend the loss of a company they don’t buy from, but in reality fewer choices = worse quality cars in the long run. Look no further than how poorly Honda, Toyota, and Subaru have progressed.

    Chrysler, I don’t know what to make of it. Nobody does, because it’s a once-healthy American institution that was mismanaged by the Germans for 10 years before getting spit upon by a company in over its head. I don’t know if there’s anything worth saving in Chrysler, but if there is, it should be. If there were any justice, Daimler would be responsible for fronting half the costs to restart Chrysler’s product development process which they so wonderfully destroyed. I’d much rather see the winged Chrysler badge than three pointed star.

    GM has caused its own downfall, but GM, unlike Chrysler, can put out decent products in its current form. In fact, it very-much does. Someone needs to figure out how to take these pieces and assemble them correctly.

    The reality is that there isn’t any silver lining to the big 3 failure. The problem is that the current zeitgeist is that of “eco transportation,.” Anyone from the government is going to mandate glorified golf carts (not knocking electric, but c’mon) , when what is needed is a “car guy” who is PR friendly (as in is willing to BS more to make TTAC happy than say, Bob Lutz.) Ooops…

  • avatar
    agenthex

    Everything you’ve been taught to hold as dear, all of those “American” traits which we all cherish so much…all of that is out the door.

    That’s funny because those are the traits that the corps spend massive amounts each year teaching to the American people. I mean, it’s certainly not the material disseminated even in most western of academic education systems.

    Did you think it was a coincidence?

  • avatar
    agenthex

    Listen, it has happened…those who chip in and break a sweat when it’s called of them …these are the same people whose homes still stand to this day.

    So.. how did that system work if they didn’t have anyone in the family able to contribute to the physical effort? Let their house burn down?

    In any case, it’s clearly a communist scheme to deprive an efficient private fire fighting enterprise of its due opportunity at profit.

  • avatar
    Pch101

    It’s time that the term “socialism” was put into the spam blocker. Enough already.

    The collapse of the markets that occurred as a result of the implosion of Lehman last September is what led to the bailouts of GM and Chrysler. GM and GMAC (the latter of which Cerberus owned 51%) were two of the most heavily traded corporate credit default swaps in the market.

    No one can know for sure what would have happened had they been allowed to fail. But we got a strong hint on October 9 when the S&P downgrade of GM led to the Dow falling 679 points, or 7%, based upon the news. That put the Dow below 9000, which was not exactly a great bit of symbolism for the markets.

    It’s unfortunate, but we had no choice but to bail them out. The economy is not just an abstraction in a textbook or on some political website, but an actual system upon which billions of people depend every day, which can’t be permitted to explode just because a few passionate ideologues think that it should.

    Once the system melts down, there’s no unmelting it. There are times in life when we just have to hold our noses and deal with it. We tried it with Lehman, and it just didn’t work.

  • avatar
    Rastus

    Schools nowadays don’t teach independence.

    The teach just the opposite- dependency.

    Why, you can’t even speak your mind anymore without fear of being expelled for creating an atmosphere “hostile” towards those who may not agree with you.

    This is real. This is not some fantasy nonsense.

    Ask yourself one question: How is it the Amish, who on average have an 8th grade education, how are they, as a group, about the most INDEPENDENT people in this country? And by “independent”, I mean financially independent.

    Read up on it if it piques your interest…because there is definitely some truth to it. They do NOT submit their kids to 12+ years on nonsense and brainwashing.

    Even today, when we read of a kid at the age of 14 or so graduating from college…we gasp in amazement. Yet ask yourself…”What did I REALLY learn in grade school which was worth a damn?” I think my personal answer was that I learned to read and perhaps perform some basic math. That’s it…that’s about all I can honestly say I learned of value in 12 years.

  • avatar
    Rastus

    There are MANY ways to contribute!!! Stop limiting yourself to the bucket brigade. Use your God-given creativity.

    An old lady performing sewing, etc. Come on now.

    And how is a rural county with no money going to pay those “professional” (ie, for-profit) firemen???

  • avatar
    agenthex

    corporate credit default swaps

    Ah yes, underfunded CDS’s, laisse faire capitalism at its finest.

    It’s really quite hilarious (no, ludicrous) that the same libs who bash fiat money support a system where practically NO support for a security is possible (and most profitable).

    -
    Read up on it if it piques your interest…because there is definitely some truth to it. They do NOT submit their kids to 12+ years on nonsense and brainwashing.

    Sorry, I’m not really interested in living a subsistence lifestyle in a fairly wealthy nation.
    -
    And how is a rural county with no money going to pay those “professional” (ie, for-profit) firemen???

    By bilking it from their city cousins, of course, which then they stick in the back by voting for “independence-minded” conservatives.

  • avatar
    Rastus

    You’ve never been to Lancaster County PA, have you? Subsistence my ass. They sure as hell don’t live in a tract home w/in spitting distance of their neighbors.

  • avatar
    Brian Tiemann

    Rastus:

    I never studied Civil Engineering. Is anyone out there privy to how one would construct a limp phallus in concrete, steel, and glass? One with a diseased appearance?

    Hire Frank Gehry.

  • avatar
    Rastus

    The topic was INDEPENDENCE….something which is quite unheard of nowadays.

    And yes, I’d say you are not dealing with reality if you claim there is nothing to breeding DEpendency in our “system”…ie, “mortgages”, taking out a loan so you can take a vacation, leveraging one credit card for the payment of another…it’s a vicious cycle…one which is literally TAUGHT.

  • avatar
    agenthex

    You’ve never been to Lancaster County PA, have you? Subsistence my ass.

    Any wealth they may have largely derive from their ownership of sizable amounts of land, and the location of that land in a wealthy area.

    It’s hardly news that increasing education standards and subsequent high value industry creates relative wealth in nations.

    That you yourself may not have derived the greatest benefit is unfortunate but does not negate the larger trend.
    -
    The topic was INDEPENDENCE….something which is quite unheard of nowadays.

    The reason for this is that higher living density and the legal infrastructure inherent in advanced modern civilizations is antithetical to such archaic notions.
    -
    leveraging one credit card for the payment of another…it’s a vicious cycle…one which is literally TAUGHT.

    BTW, did you think about who teaches these things as I advised above?

  • avatar
    Rastus

    Uncle Rastus was making 200K/yr until very recently. Thanks for your dig, but I’m confident in my own abilities. How many NASA programs have your worked on?

    The point I was making was that it should NOT be a surprise when young kids do great things…and go to college while their minds are fresh. A 14 or 15yr old in college should be the NORM!!!

    Why is that so hard to understand??? You’d rather they piss their years away learning Home Economics by some flunky grade-school teacher???

  • avatar
    Rastus

    Who “teaches” it? Who gave Bill Gates the confidence to drop out of a rote existence???

    A lot of it comes from the family in which the child is brought up. Thank God Bill Gates and others of his ilk had some decent parents.

    School teaches you to sit in a cubicle, to raise your hand, and to stop everything when a bell goes off. You can NO longer proceed…because an authority TELLS you you can no longer proceed.

    Or in the case of GM…they will get ANOTHER handout when they PISS the 4-5 they’ve already been given away!!! Grow up people…this is life…this is not some grade school recital.

  • avatar
    agenthex

    Uncle Rastus was making 200K/yr until very recently.

    And if you examine the underlying sources of that income, you’ll find that that my statements above are unerringly correct.

    -

    The point I was making was that it should NOT be a surprise when young kids do great things…and go to college while their minds are fresh. A 14 or 15yr old in college should be the NORM!!!

    I would agree it’s unfortunate that there are so many stupid people who aren’t capable of working on NASA programs or even understanding statistical aberration.
    -

    Who “teaches” it?

    It’s taught through the massive amounts of advertising,with varying degrees of subtlety. And what better strategy than to inflate the egos of the mark than to praise him on his independence and the choices (pay attention) which will verify this?

    -

    Who gave Bill Gates the confidence to drop out of a rote existence???

    Likely his wealthy parents who could support him regardless, and one of whom had a social relationship with important peep at IBM.

    Hey, didn’t you just imply that college was good?

  • avatar
    Rastus

    Nice try my friend- I’m sure as hell no “govie”. I’ve worked in both commerical and aerospace…

    But thank you.

  • avatar
    san123chez

    Rastus:

    Two points,

    A: Don’t forget that free market capitalism isn’t effective as an unrestrained entity. It is, in fact, self destructive. See: Monopoly (the leveraging of market advantage to sabotage market will). GM and Chrysler should have gone under long ago, when they were strong enough to survive the process. Today’s predicament is a combo of those company’s poor management, and that same management’s manipulation of its board/lobbyists to silence their shareholder’s demand for change and profitability.

    B: you state “An old lady performing sewing”. The correct phrase is “Sew old woman, sew like the wind!”- The Three Amigos

  • avatar
    Rastus

    College would be good for those who otherwise might wind up as a “Culinary Artist” at some 3rd-rate hotel, wouldn’t you agree? Or what about becoming an automotive engineer, vice a diesel “mechanic”?

    But if the standardized tests which categorize you say otherwise, I suppose you have to do what they say, right?

    You can dismiss Bill Gates if you’d like…but when you look at the trend…Bill Gates, Richard Branson, Edison, Henry Ford …hey disregard everything, ok? Please!!

    Please…you have a homework assignment to do, ok? I need a 500 word essay by tomorrow morning on how Laura Ingalls-Wilder spent her winter in the Little House on the Prairie up in Minnesota with here Pa and Ma.

    8:00am sharp!!

  • avatar
    agenthex

    Please…you have a homework assignment to do, ok? I need a 500 word essay by tomorrow morning on how Laura Ingalls-Wilder spent her winter in the Little House on the Prairie up in Minnesota with here Pa and Ma.

    Those assignments are meant as helpful practice for writing concise and sensical viewpoints.

    For example, please explain the discrepancy between the animosity toward structure in education and yet a desire for an uncreative and largely regimented rural lifestyle.

  • avatar
    Paul Niedermeyer

    Rastus,

    Having spent time with Amish, I can appreciate their hard working life-style, but believe me, it comes at a price. A pretty big one. There is a reason that about half of them don’t stay Amish. That’s probably one of the reasons they have such large families.

    There’s no question that cults are a financially superior model of social organization. I’ve been involved and familiar with enough of them to know. Freedom does have a price.

  • avatar
    cdandy

    Don’t forget this current crop of government crooks loves to decimate and/or redefine those great traditions and symbols of these United States of America.

    Inject whatever reason or rational you want for GM’s demise. Tis another proud symbol of capitalism (i.e. USA) destined to the ashheap of socialism.

    There it can be used as a constant reminder of just how powerful and good government can be compared to the lost ways of capitalism.

    Meanwhile the lemings will line up to purchase the new koolaid wagons for the new economy. There we don’t choose what we want but a committee will choose for us.

    Robert is right. True consumers aren’t going to buy the koolaid to drink unless they are forced.

    It would appear that the silver lining is more silver on the government side of the cloud.

    Let’s hope this fiasco sticks to these Teflon touting saviors of capitalism.

    Or maybe, just maybe, there is another Billy Durant out there that can do it all over again.
    Of course he would have to have his original cohungas. Not the ones the government wants him to have.

  • avatar
    agenthex

    There’s no question that cults are a financially superior model of social organization.

    Would you say the same for any pyramidal scheme?

    You do bring up the point much more succinctly why it’s lol funny when amish and “independent” come up in the same sentence.

  • avatar
    Paul Niedermeyer

    @agenthex

    cults aren’t necessarily pyramid schemes. Think kibbutz, communes, monasteries, Amish, Hutterites, etc. Living dormitory style, or not spending anything on unnecessary “luxuries” is economically advantageous, as are long working hours – all for the “cause”.

  • avatar
    ttacgreg

    The words communism, socialism, fascism, liberal, conservative, and maybe even democracy are meaningless words in the USA today, primarily because it is apparent that very few people actually know what the definition of them are. George Orwell and others have talked about how debasing the language of a people is a means for controlling the populace.

  • avatar
    reclusive_in_nature

    I think the silver lining is going to be GM (and maybe Chrysler) going C11 and breaking the strangle hold of the UAW. Then hopefully they’ll focus on making affordable vehicles people WANT as opposed to what the government thinks people need.

  • avatar
    agenthex

    cults aren’t necessarily pyramid schemes.

    I was thinking of the organization where the many toil for the advantage of the few.

    Apparently the American Way (ie. cause) in modern times is against those many without controlling capital when they stand up for any rights.

  • avatar
    John Horner

    How many of the “everything the government touches turns to rubbish” true believers would like to see the US military wound down? The US’ military operations are the largest enterprise of any kind in the world.

  • avatar
    Dimwit

    In all these comments all that I can see is me, me, me. American this and US that. Guess what? This is global. Whether Chrysler and GM go down, it’s obvious that the landscape has changed, how drastically is the open question.

    Will the economies recover? Yes. But at what cost? What are we willing to pay to salvage our systems? The US has embarked on a policy of debt financing that looks like a bottomless pit. There’s not too many other countries that can do that with so much money. That merry-go-round will be stopping soon as the well runs dry.

    Can the world economies hang on? Perhaps, but we’re one bad decision away from disaster, I wager. I just hope that frustration and desperation don’t push us to the point of something like a war.

  • avatar
    don1967

    “But we got a strong hint on October 9 when the S&P downgrade of GM led to the Dow falling 679 points, or 7%, based upon the news.”

    Using this logic, the stock market will go to zero if GM files for bankruptcy.

    Daily stock market fluctuations are a fickle friend. One minute they seem to support your ideology, the next they leave you looking like a fool.

  • avatar
    improvement_needed

    since when did the amish turn into a cult?

    talk about “debasing the language”…

    Rastus:

    It was written:”
    Uncle Rastus was making 200K/yr until very recently.

    And if you examine the underlying sources of that income, you’ll find that that my statements above are unerringly correct.”

    to which you replied that you don’t work for the ‘govie’

    However, the point is that the Govie, and your / our tax dollars enable NASA and virtually the entire aerospace industry to exist.
    Thus, if you were making 200k/annum working on NASA / aerospace projects, the underlying source of your income would be government spending.
    Even if you weren’t working on projects with direct govie funding, the govie structure enabled your project to exist…

    overall, a very interesting conversation…

  • avatar
    Morea

    Once the system melts down, there’s no unmelting it.

    This is too strong a statement. Countries have faced economic collapse before and have come back stronger. I am not advocating letting the system collapse but to imply that either-we-save-it-or-it-will-never-come-back is not a carefully considered position.

  • avatar
    threeer

    Gee, with all this talk of bankruptcies and bailouts, would the fact that Pontiac is going away make this a good time to buy a lightly used Solstice, G8 or hang onto the family’s last model-year Firebird Firehawk??

  • avatar
    chuckR

    John Horner said

    “The US’ military operations are the largest enterprise of any kind in the world.”

    And sad to say, its the only part of the US government we can be proud of – in war, against AQ and the Talib, and in peace, ie the Abraham Lincoln BG relief efforts after the Boxing Day tsunami and the CG’s stellar rescues in New Orleans post-Katrina.

  • avatar
    windswords

    san123chez:

    “GM and Chrysler should have gone under long ago, when they were strong enough to survive the process.”

    Chrysler certainly would have in 1979-80 and GM now (in the last 6 months). But if the “merger of equals” had not happened there is no telling where Chrysler would be now. There are those here who think they know, but they don’t really. No one does. Maybe Robert Eaton would have wrecked the company (he sure did a good job on the Neon). But maybe they would have survived him to be stronger than Ford, who is only avoiding this mess because they borrowed mega bucks before the economic meltdown. Other than that they are doing no better. Their sales suck just as much as everyone elses. Question is, do they have enough money to last them until sales turnaround?

  • avatar


    It’s time that the term “socialism” was put into the spam blocker. Enough already.

    While there is no question that Obama is a redistributionist and wants to radically change US business and finance, what he and the Democrats are doing now is frankly more akin to fascism, where the government tells businesses what to do.

  • avatar

    “The US’ military operations are the largest enterprise of any kind in the world.”

    I’m not sure that’s true. US military expenditures are about 4% of GDP (half of what it was under Kennedy in the early 60s, but then back then a significant number of Democrats were actually realistic about national security).

    We spend much more on education than we do on defense. I’m pretty sure we spend more on entitlement programs like Medicare than on defense.

    If you’re going to describe the US military as a single enterprise, you’ll have to do the same with education.

  • avatar
    Pch101

    Using this logic, the stock market will go to zero if GM files for bankruptcy.

    You miss the point. In the fall. the markets were deleveraging hard. The decision to let Lehman go produced a result that the leadership at Treasury never quite expected. That was a catalyst for the markets unwinding hard and fast, and led to the bailout of AIG.

    This was all part of a sequence of events in which the markets were pricing in a possible depression. It wasn’t about GM per se, so much as it was about all of the swaps tied to GM. Had they imploded at that time, that could have brought down everything.

    In light of Lehman, it was cheaper to throw money at it than it was to do nothing, and then see whether the result proved to be cataclysmic. The degree of financial interdependency between seemingly unrelated entities is the core of the issue here.

    As time goes on, adjustments can be made and an orderly failure becomes more plausible. In a year or so, it might be quite possible for GM to die without it doing much damage to most of us. But last fall, it wasn’t.

    what he and the Democrats are doing now is frankly more akin to fascism, where the government tells businesses what to do.

    If that’s how you feel, then you and your righteous buddies in Michigan should do the right thing — pool your resources together, and give us our money back.

    Unfortunately, this bailout was necessary because your beloved auto companies stuck us up against the wall. If you don’t like the results, then pay us back. We’re your lender, those companies are our collateral, and we not only have a right, but a responsibility to try to get the money back.

    Either deal with it, or raise a collection plate. In the meantime, try being a bit grateful for towing you out of the mud, because Detroit sure as hell didn’t deserve it.

  • avatar
    geeber

    agenthex: Little Timmy can’t read good, but screw remedial public education, he’s probably a tard anyway.

    If the parents aren’t making sure that Little Timmy learns to read, remedial education is a waste of time, effort and money.

    The key to making sure that children learn is parental involvement, not spending more money on education. There is no proof whatsoever that spending more on education leads to greater student achievement.

    agenthex: By bilking it from their city cousins, of course, which then they stick in the back by voting for “independence-minded” conservatives.

    Rural Pennsylvania is served quite effectively by volunteer fire and emergency services companies, and has been for decades.

    Ronnie Schreiber: While there is no question that Obama is a redistributionist and wants to radically change US business and finance, what he and the Democrats are doing now is frankly more akin to fascism, where the government tells businesses what to do.

    What did you expect? GM and Chrysler asked for government money. Generally, government money comes with strings attached. That is why many people, such as myself, are against direct government aid to corporations. Note that Ford isn’t worrying about the government making product decisions. It’s amazing what competent leadership can do for a company…

    On other websites, GM loyalists are claiming that Obama forced GM to kill Pontiac. This is nonsense, although, ironically enough, if he did I would say that he did GM a favor. Pontiac has been a shell of itself for years anyway. The idea that today’s Pontiacs retain any DNA from a 1961 Bonneville or 1968 GTO is quite a stretch.

    If GM wanted to keep Pontiac (for whatever reason), it should have made sure that that the brand never devolved to the point where its lineup consisted largely of rebadged Chevrolets.

  • avatar
    agenthex

    I am not advocating letting the system collapse but to imply that either-we-save-it-or-it-will-never-come-back is not a carefully considered position.

    I don’t think most people quite realize the thin margins upon which many important “markets” exist nowadays. The very high amounts of leverage that crept into the systems as of late means that even relatively minor change is multiplied many fold.

    To wit, the CDS’s mentioned above are “valued” at dozens of trillions of dollars, with the exact number of dozens pretty much up in the air right now. A crash restricted to just this is on the order of world gdp.

    -
    The key to making sure that children learn is parental involvement, not spending more money on education.

    To think all this time we were wasting money on schools when the oral tradition would’ve sufficed.

    -

    Rural Pennsylvania is served quite effectively by volunteer fire and emergency services companies, and has been for decades.

    Yes, I’ve already noted what communists they are.

  • avatar
    geeber

    agenthex: To think all this time we were wasting money on schools when the oral tradition would’ve sufficed.

    Nice dodge, but no dice. Where did I advocate abolishing public education? You can place that strawman out in the cornfield where he belongs.

    What you’ve been wasting time on is crying for “more funding” to improve education instead of addressing the root causes of the problem.

    Unfortunately, the root causes suggest that parents play a large part in determining the success of their children in school. Studies have shown that spending additional funds on education does not improve student achievement. Spending on education has far outpaced inflation over the past 20 years, without any notable improvement in student achievement.

    You seem long on theory and short on real-world experience. My wife, who teaches special education in a poor, urban school district, can help you become better informed.

    agenthex: Yes, I’ve already noted what communists they are.

    You’ll have more credibility if you learn the difference between communists and volunteers. No one is required to become a volunteer fire fighter or emergency services worker.

    Incidentally, if you really believe that cities always subsidize rural areas – I can arrange a meeting with an analyst working for the Appropriations Committee of the Pennsylvania Senate. He can explain the effect that Philadelphia and Pittsburgh (the cities, NOT the suburbs) have on the state budget. Again, I’m sure that this will be very educational for you.

  • avatar
    agenthex

    What you’ve been wasting time on is crying for “more funding” to improve education instead of addressing the root causes of the problem.

    I will note the original comment was a joke you missed the point of and overreacted to something else.

    -

    No one is required to become a volunteer fire fighter or emergency services worker.

    They are if they don’t want their house to burn down. Or if you service all homes anyway (as should be the case) it is exactly communism. The fact that you are reaching for less stigmatized words only proves the intent of my point.

    -
    He can explain the effect that Philadelphia and Pittsburgh (the cities, NOT the suburbs) have on the state budget.

    Suburbs are components of cities (residence/workplace), rural areas are not.

    -
    In summary, it would help your arguments in the future if you could try to understand the point first instead of latching onto whatever you think is the standard dialogue.

  • avatar
    geeber

    agenthex: I will note the original comment was a joke you missed the point of and overreacted to something else.

    That doesn’t change the fact that my original point still stands. Again, if you want to become better informed about how the education system REALLY works, you can come to Harrisburg, and over a nice dinner (I’ll pay for it), my wife can explain the educational “facts of life” to you.

    agenthex: They are if they don’t want their house to burn down.

    Not everyone in a rural area is a volunteer firefighter.

    agenthex: Or if you service all homes anyway (as should be the case) it is exactly communism. The fact that you are reaching for less stigmatized words only proves the intent of my point.

    There is no compulsion to serve in a volunteer fire company, and there is no requirement of government support. The fact that this protection is available to every house is irrelevant.

    agenthex: Suburbs are components of cities (residence/workplace), rural areas are not.

    Another attempted dodge, but no dice. The cities of Philadelphia and Pittsburgh are separate entities with their own governments, boundaries, ordinances and systems of taxation. They are completely separate from the suburban areas.

    Your original contention was that rural areas are getting a free ride on the backs of urban areas. In Pennsylvania, this is not the case (maybe it is in your state – I don’t know where you live).

    We can determine how much revenue is generated by each municipality, and how much state aid it receives. And the fact is that, in Pennsylvania, Pittsburgh and Philadelphia are being subsidized by the rest of the state.

    agenthex: In summary, it would help your arguments in the future if you could try to understand the point first instead of latching onto whatever you think is the standard dialogue.

    Excellent advice that we should all follow – including you.

    I might add that you need to learn how government works in the REAL world before making broad, sweeping generalizations.

    As I said, your grasp of theory is admirable, but you seem to be short on real-world experience.

  • avatar
    agenthex

    That doesn’t change the fact that my original point still stands

    No one cares about your little diatribe on education because it’s unrelated to anything prior in the thread, not to mention it erroneously figures a largely symptomatic issue as causal in a systematic problem.

    -
    The fact that this protection is available to every house is irrelevant.

    It very well is. If the protection is available to anyone, even without their labor, it’s the very portrayal of the tragedy of the commons. The criteria that you use (compulsory? lol) are irrelevant.

    -
    The cities of Philadelphia and Pittsburgh are separate entities with their own governments, boundaries, ordinances and systems of taxation. They are completely separate from the suburban areas.

    Again irrelevant, the vast majority of metropols spawn suburbs as residential areas for their middle class occupants. The latter would not exist without the former.

    The fact is, rural areas make for a poor tax base, and take up subsidies and other gov “handouts”.

    -

    Excellent advice that we should all follow – including you.

    I might add that you need to learn how government works in the REAL world before making broad, sweeping generalizations.

    Perhaps you can iterate the instances where I missed the point and carried on as if it was righteous.

    Speaking of broad sweeping generalizations, perhaps you can offer some examples instead of just assuming your anecdotal “real-world experience” has any worth.

  • avatar
    Jeff Puthuff

    Okay, the sarcasm is starting to drip off the ceiling with the back and forth convo here. Careful so that you don’t start a “flaming” fire.


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