Bailout Watch 160: Won't Be Motley Fooled Again
The Motley Fool says satellite radio is too big too fail. Kidding! But point taken. “In reality, there’s no good reason for the government to step in and save satellite radio. It’s a terrible business that’s done nothing but pile up losses and disappoint shareholders. It can’t compete with the Internet, podcasts, or MP3s. The business destroys value. If the government were to loan it money, it would never see that money again. Bailing out satellite radio is a ridiculous notion. No one — not even the politicians in Washington (let’s hope) — is considering it. Yet Washington is considering a hefty bailout for U.S. automakers — an industry with much more in common with satellite radio than anyone would like to believe.” The rest of the piece argues against a Detroit bailout. It should give the American automakers’ political supporters pause’ it ends with an increasingly familiar call to readers to contact their reps to oppose the bailout. Take it from someone who surfs for a living (Jesus, is that what I do?): there’s a growing groundswell of public opinion against throwing money at Motown.
AG, Your problem is that you and your Republican friends probably don't agree on the meaning of trickle down economics. What was called trickle down during Reagan's time DID work. It was easy for it to work because the tax rates were punitive. You really can't refer to a 2% argument on the top marginal rate as a matter of trickle down or not. What is not trickle down economics is the idea that setting the tax rates at a level which reduces revenues is simply foolishness, or maybe even tyranny. The part of the Obama plan that will blow up on us is the combination of the marriage penalty, and the social security donut. Most people simply don't understand these things. Just like people don't understand most derivatives. That's why they are so dangerous. It sounds like a free ride, but it will destroy the country if enacted. Similarly, increasing the welfare aspect of the tax code is not a great idea. Supply side may be challenged, but even Keynes wasn't a Keynesian. That BS has failed over and over again. No war on poverty was ever won. They are waste of treasure and blood that make Iraq look like kickball.
I would be willing to bet that ninety-some percent of people who own cars with 500+ hp engines are able to immediately tell the difference between that power level and 200 hp less.
@john.fritz Your on. I believe most with 500hp would pee their pants (or barf out the window) if they ever got close to using their car's full potential. Anything more than 300 hp is a waste for 99% of the owners out there both in terms of what they can handle and where they can use it (even illegally use it). Just surf on over to wreckedexotics.com
It seems likely that Sirius will file Ch. 11 and it will be acquired out of bankruptcy by someone else. The business will make a lot more sense to someone else with a different business model who didn't have to pay the full costs of building it out. Whether or not you believe in rescuing Detroit, satellite radio is not a great metaphor for the auto industry. I guess that the guy needed something to write about, but the comparison doesn't really work, on a lot of levels. It's quite possible to rationally defend a bailout for Detroit without seeing a need for the feds to assure Howard Stern of continued employment.