Let's see. We have ponied up 700 BILLION dollars to bailout financial institutions. I have a very hard time getting my head around $700,000,000,000. That's a lot of zeros. I mentioned in a earlier post, you would have to earn $1,000,000 an hour, every hour of every day, for 80 years to earn $700,000,000,000. That's a lot of money for a long time.
Now we are hearing that they have given about 1/2 of that money to banks with few, if any, strings attached. We are not even sure what the banks are doing with the money, except that they are not helping the homeowners who are about to lose their homes. Hopefully they are not following in AIG's footsteps and spending it on parties.
Now along come the big three US auto manufacturers asking from money. They want about 25 billion or roughly 3.6% of the 700 billion -- not all that much, relatively speaking. The US auto industry employs about 10% of the work force if you include all the auxiliary industries attached to the big three. That's a lot of people. Some estimates say unemployment will rise to about 10% if the auto industry goes under.
Treasure Secretary Paulson says fuck you to the auto industry. I guess he wants to save that 3.6% for his banking buddies.
This shows you where the Bush administration's loyalties lay. They would rather prop up the financial institutions to the tune of $700 billion dollars rather than propping them up with "only" $675 billion and helping out thousands of auto workers and other associated hard working people with $25 billion.
One other minor point that seems to be missed in all the discussion that has been going on. The news reports keep referring to the $25 billion for the auto industry as a bailout. The banks and financial institutions are getting a bailout. We are giving them the money with no expectation of getting any of it back.
The auto industry is asking for a loan. Let me say this again. They are asking for a LOAN. They intend to pay it back. I've yet to hear a bank or financial institution say they are going to pay back their money gifts.
I'm no big fan of the US auto industry. I do own two US made cars, but that is only because they are cars that my wife wanted. I don't really care too much about what I drive as long as it doesn't break down on me and gets me from point A to point B. I think a lot of the problems the US auto makers are having are their own damn fault. Their managements are a bunch of idiots.
But their workers are a bunch of hard working stiffs -- good old Joe the auto worker. If we can GIVE money to a bunch of banks and Wallstreet crooks and expect nothing back, then we ought to be able to LOAN 3.6% of the bank/Wallstreet money to the auto industry.
We did it for Chrysler in 1979, and got paid back. Maybe they will pay us back again.
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I don't know the answers here, and I don't attest to, but even with a LOAN, isn't it possible that the BIG 3 are no longer viable industries? Might the Loan just be a "band-aid" on a much bigger problem. They don't make cars people want, and nearly anyone can afford at this time. Maybe we should let them sink, and let those businesses meeting the demands of consumers rise. People want fuel efficient, affordable, dependable, planned-obsolescence free cars that are not being brought to consumers by the Big 3. I'm just rambling a bit...I'm neither for or against the LOAN to the auto industry...I just hope this doesn't open up a precedence for other industries to seek financial support at the financial strain of the tax payers...But, this is nothing new for the government.
ReplyDeleteBut, I am PISSED about how the current bail-out is taking shape...
-jd, I share your concern about a loan just being a "band-aid". There is a segment of people that want big cars. Just look at the cars on the freeways. But the Big 3 do need to make some major changes in how they do business and in the mix of cars they make.
ReplyDeleteI guess I look at it this way. We have already bailed out the "money changers". These businesses move money from one place to another. While they may be necessary, they don't "make" anything. The auto workers and ancillary businesses make material things. Things that can be bought and sold, and generate "the economy" - the things we buy and sell.
If we can help the money changers to the tune of $700,000,000,000, maybe we can help a real manufacturing business to the tune of $25,000,000,000; about 3.6% of the money changers' help.
It appears many of our highest level capitalists are looking for a bit of socialist assistance. I know it is considered a loan from some perspectives but in effect it's bailing them out from their own irresponsible practices and poor management. I say let them go the airline route.
ReplyDeletemnwhr - I can really go either way on this one -- help them out or let them deal with it on their own -- although I am a bit of a socialist at heart, at least where the workers are concerned, but not so much for the high level capitalists.
ReplyDeleteI changed my mind...screw 'em.
ReplyDeletehttp://consumerist.com/5093070/auto-ceos-flew-private-jets-to-washington-to-ask-for-your-tax-money
The rat bastards!
ReplyDeleteThey live in a different world. It probably didn't even occur to them to fly commercial.
They should be fired as a prerequisite for any type of help!
Not to throw a monkey wrench into this arguement but we kind of need automakers in this country. I'm thinking not having that kind of resource might have some rather nasty results long term.
ReplyDelete