Question of the Day: $50b Loans for American Jobs?

Robert Farago
by Robert Farago

Ford, GM and Chrysler want $50b worth of low-interest federal loans. At the moment, the loans are specifically restricted to adapting 20-year-old manufacturing plants to build fuel-efficient cars. The money is, in the parlance, “earmarked.” Detroit would like you to believe that the limited use makes the moola a “green” initiative rather than a bailout. But it’s obvious enough (if you think about it) that any money spent re-tooling factories saves The Big 2.8 money that they would have spent re-tooling factories. Which can then be spend on whatever they damn well please. And that brings us to the inconvenient truth that a lot of Detroit’s products, and billions of dollars worth of parts that make their products, don’t come from the U.S.A. In the pre-election shuffle, Barack and friends are making noises that the federal loans will protect American jobs. But aren’t The Big 2.8 complicit in eliminating American manufacturing jobs? And if it’s all about jobs, well, there are roughly 400k Detroit auto workers. Why not just give the workers an option of a $125k buyout apiece, courtesy of Uncle Sam? Or spend the $50b on lowering barriers for other automakers to build in the U.S. Seriously. What’s your idea for a better way to spend this money to create/protect American automaking jobs?

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  • Faster_than_rabbit Faster_than_rabbit on Sep 08, 2008

    How is eight years of the Bush administration considered "the last bailout?"

  • Timd38 Timd38 on Sep 08, 2008

    A Japanese company ( Toyota ) and an American company (GM) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race. On the big day, the Japanese won by a mile. The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action. Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing. Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were rowing. Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents, and 1 assistant superintendent steering manager. They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners, and free pens for the rower.. There was discussion of getting new paddles, canoes, and other equipment, extra vacation days for practices and bonuses. The next year the Japanese won by two miles. Humiliated, the America n management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the next year's racing team was out-sourced to India . Sadly, The End. Here's something else to think about: GM has spent the last thirty years moving all its factories out of the US , claiming they can't make money paying American wages. TOYOTA has spent the last thirty years building more than a dozen plants inside the US . The last quarter's results: TOYOTA makes 4 billion in profits while GM racked up 9 billion in losses. GM folks are still scratching their heads. IF THIS WEREN'T TRUE, IT MIGHT BE FUNNY.

  • Netrun Netrun on Sep 08, 2008

    I live in Detroit. I work for an automotive supplier. I am not in favor of the bailouts. But they are coming. My plan? Get the EFF out by 2013! Here we go with "Bailout to Nowhere"

  • Geeber Geeber on Sep 08, 2008
    Orian: I have to think back a bit and look at the Clinton years - he inherited the nation’s largest budget deficit, then by the end of his term turned it into the nation’s largest surplus we had ever had. No, he inherited an improving economy (the recession was over by November 1992, but most voters had not yet realized it) and the beginnings of a tech boom, which caused a gusher of revenues at the federal and state level thanks to taxes paid on capital gains (remember all of those internet millionaires and billionaires?). His main contribution was in not messing it up by listening to Robert Rubin instead of the liberal wing of his party. I still remember the famous quote by the Ragin' Cajun, James Carville - "You mean that we have to worry about what a %^?#$@ bond trader from Wall Street thinks?!" Orian: He did this with a Republican controlled house and senate. He did this because he had a Republican controlled Congress - and Republicans remembered why they were Republicans. And I seem to remember that prior to the fall 1994 elections that resulted in that Republican Congress, the main goal of his administration appeared to be nationalizing health care (remember what Hillary Clinton was doing BEFORE she was Senator Clinton?). Anyone who thinks that deficit reduction is possible when the federal government basically takes over the health care sector is kidding themselves. Orian: GW Bush came in and flipped it right back around into the nation’s largest deficit within 3 months with the same house and senate. No, the economy was aleady trending toward a deficit-mode before Bush took office. Note that the economy was slowing down in early 2000, as the tech boom was over (NASDAQ, for example, peaked in early 2000) and all of the spending associated with Y2K needs was finished. Orian: Seems to me that the Republicans are no longer fiscally conservative nor should they be trusted with running our country until they get back to their roots. For what it is worth I never voted for Clinton - or any other Democrat until I started looking a little deeper and got sick of the FUD the Republicans were spreading - seems they can’t win on merit so they resort to whatever they can now to win. And when the Democrats advocate reforming the real drivers of spending - Medicare and Medicaid - and start talking about cutting more than defense, let me know. Otherwise, I don't consider anyone to be fiscally conservative when they talk about raising taxes to cover more and more spending. Last time I checked, the Democrats have said that even cutting the rate of those programs' growth is tantamout to throwing grandpa on the streets and letting him die of (pick the disease or condition that works for this particular soundbite). Hardly the party of reasoned discourse... And I just read an article comparing the fiscal policies of both major candidates. Guess what - neither one will do anything to reduce deficits. Given that this Congress appears to be even worse in many ways than its Republican predecessor, I shudder to think of what may happen if a Senator Obama wins.