Big 3 Auto Bailout

[WhiskeyGirl]

I read that Congress is looking for a business plan from the Big 3.

When will Congress bail out Social Security & Medicare?   Is there a business plan for that lurking somewhere?

When will Congress bail out Main Street?

[WhiskeyGirl]

Canada weighs in -

Planes, drains and automobiles
The Journal Pioneer

Apparently, top executives at North America’s biggest automakers haven’t received the memo that we’re in the midst of some tough economic times.
 
At a time when many citizens are pinching pennies and cutting coupons to ensure they have enough money to eat, chief executives from these companies are hopping jets, flying across the U.S. then asking for a $25-billion bailout.

Yes, times are tough for the big automakers, but not tough enough for their CEOs to tighten the purse strings by grabbing a commercial flight or, at the very least, “jet pool” to a meeting where they’re crying poor and begging for money.

Each chief executive from the three major North American automakers landed in Washington Wednesday in a private jet, a very costly way to travel. And each earns a multi-million dollar salary in jobs that aren’t in danger, like those in the assembly room.
In the U.S., 355,000 American workers are directly employed in the auto industry and more than four million work in related industries. Then there are the one million retirees, spouses and dependents that rely on the companies’ retirement and health-care benefits.
In Canada, Ontario relies heavily on that industry. And with that province now considered a “have-not” province, the loss of one or more of the three automakers would be a devastating blow.

While workers are worrying each day if they’ll receive a pink slip, these executives continue to wastefully spend money.

http://www.journalpioneer.com/index.cfm?sid=192764&sc=120

How long will the executive salaries be funded if the companies go under?

GM and Chrysler indicated that without loans from the government, they will be below minimum cash requirements by end of the first quarter of 2009. GM's Wagoner said his company will have about $15 billion in cash at the end of the year. Nardelli said Chrysler has $6.1 billion now. "That is getting very close to our minimum needs of liquidity to operate," Nardelli told the Senate committee.

Ford said it can last into 2010, unless the market gets appreciably worse. But it worries that a GM or Chrysler failure will trigger the failure of hundreds of auto suppliers, freezing Ford's production and thus driving all three companies and an array of suppliers into Chapter 11 reorganization. GM is asking for $10 billion to $12 billion in loans. Chrysler has asked for $7 billion, and Ford, $7 billion to $8 billion.

http://www.wtol.com/global/story.asp?S=9378367

How long would cash at GM and Chrysler last if they didn't pay year end management bonus and other compensation?

Where would the 'talent' go if they lost their job?

How much do these companies pay out in executive, management, board compensation each year?  If they've really been making money all these years, where has it gone?  Research?

I think there are some pieces to the money puzzle missing.

In my examples of United and CNW (Chicago NorthWester RailRoad) the employees helped to make a future for themselves.  From memory, the took a percentage hit of their pay (like 10% or something) over many years to pay off the loans used to buy the company (CNW).  After a certain point, they received this investment back.  At CNW, it was a lumpsum windfall for many employees.

With the stock trading at such low prices, why doesn't management see this as a solution?  An investment in the future of all employees - management and labor alike?  Sharing the risks and rewards of the future?

[WhiskeyGirl]

OPINION: Don't bail out the Big Three
 
November 22, 2008 - 7:03 AM

...The reluctance of legislators to send more of the taxpayers' money to these companies may reflect a dawning understanding that bailing them out might be the worst thing one could do for them. None of the CEOs that led their companies into deep trouble has offered to resign, and they told the Senate Banking Committee that they think the reorganizing they have done is suflcient - if only they can get a little of the taxpayers' cash to tide them over. As many critics inside and outside of the industry have long recognized, however, the Big Three need not a few layoffs and cosmetic reform, but major restructuring.

...Investments must be made with an eye toward a future longer-term than the next quarter. Product palnning must be more forward-looking....  Executive perks and salaries need to be on the table.

The most effective vehicle for accomplishing such major restructuring would be Chapter 11 bankruptcy...  Unless management is even more incompetent than we suspect, such a bankruptcy does not mean a company just disappears, but that it has an opportunity to restructure itself suficiently to become economically viable again. A bailout ofiers no incentive to restructure; rather, it ofiers a rationale for postponing hard decisions. The word is that Congress will be more amenable to a bailout when the Obama administration takes office in January. We hope not.

http://www.gazette.com/opinion/three_43907___article.html/company_senate.html

If the recession/depression lasts longer than 2008, what will the Big 2 do for funding in 2009? 

How much does it cost to run those companies each month?  How much for management and executives?  Labor?  Would it be cheaper to move all the employees and retirees to standard unemployment, Medicare, and the Obama health plan?

What is the point of carrying all these expenses if American's aren't buying American made cars?  In my experience, the biggest fans of a bailout for the Big 3 do not own an American made car, and they haven't for many years.

Wouldn't it be cheaper to bail out each taxpayer with say $1 billion dollars and let the trickle up economics work?  Is my $1 billion dollar check in the mail yet?

When will someone help Main Street?

[WhiskeyGirl]

Another POV, with some interesting ideas -

One thing is clear with the auto industry- those $70 per hour wages are a fraud- they can only work if they are subsidized by the U.S. government.

There is message about Medicare that often relates to the number of workers needed to support one Medicare recipient.  How many workers would be needed to continue supporting all these bailouts?

Is it fair to pay $50 Billion (if that’s even enough) to the Big 3 Automakers while successful companies get nothing? Why would we reward failure and incompetence by the companies and unions?

I’m a small business owner. I’m having tough times as well. My friends with small businesses are all in big trouble right now. We’re struggling to survive. If you sell anything for a living right now, you are in big trouble- because American consumers have stopped buying anything. Small business creates a majority of private sector jobs in America and 75% of all new jobs. Aren’t we too important to the U.S. economy to fail? Who is bailing us out? If we create by far more jobs than the Big 3 Automakers, why isn’t there a small business bailout plan from the U.S. Treasury?

Is my $1 billion dollar check in the mail?  I'm thinking that by the time all these bailouts and jobs are created, it would have been more effective (and fair) to have given every taxpayer $1 billion dollars to help stimulate the economy.  imho

The free market alternative is to let the automakers go bankrupt or otherwise find their own way. Will they go out of business? Probably not. The courts will allow them to reorganize. They can and should renegotiate their union contracts, through bankruptcy.

I keep hearing echos of Obama stumps about being able to negotiate contracts like for mortgages.  Why not apply those concepts to the Big 2?  For some reason, it seems like Ford's biggest problem is losing suppliers if and when the other two go under.  I wonder if Ford is looking into alternatives?   That's a scary kind of monopoly - all parts from the same companies.

Did the airline industry as we know it end when TWA went out of business? Of course not. Out of the ashes, Southwest Airlines emerged with a new business model. And it works! They get you there on time, don’t lose your luggage, charge low fares, and a nice profit. A profit both they and their shareholders pay taxes on, too!

TWA deserved to fail. If we had bailed out TWA, there may never have been room in the marketplace for a Southwest Airlines. What we need right now is a “Southwest Motors.”

Yes, a "Southwest Motors" for America.  Where our least efficient models start at 50/mpg, and our best only need to be plugged in every 2,000 miles for a quick recharge of all systems!   Maybe that will be Ford in the future. 

It’s not government’s money to give. It is our money- yours and mine. These endless bailouts will keep our children, grandchildren and great grandchildren enslaved. Enslaved by big government, with oppressively high taxes for generations to come...

Yup.  Debt bondage.  Washington can dole it out in the trillions to those on Wall Street, Detroit, and others.  In the end, if I still have to pay it back through taxes, I think Washington should have started with Main Street first, and give the "trickle up" theory a chance to work.

read more of the captivating opinion here -
http://www.independentpoliticalreport.com/2008/11/wayne-root-predicts-obama-presidency-will-be-a-disaster/

just my humble opinions

[LouiseVargas]

I don't support a Big 3 bail out. No way, no how.

I don't drive American cars. People from my parents' generation had no choice. But back then, almost everything was made to last. Gasoline was very cheap. As time passed, American cars became more and more cheaply made. My step dad and my mom bought a new 57 Chevy and went on their honeymoon to Las Vegas. Halfway there, the brand new car broke down. They called the Chevy dealer in LA, took a bus back and got their money back. Then they went to another dealer and bought a 58 Chevy Impala, which was always a "problem" car.

Eventually, they switched to Ford and bought a 65 Mustang. Step dad died in 1966 and I inherited the car in 1967. Talk about a lemon! This car was the worst and my mother paid for all the repairs. Finally in 1987, we sold the Mustang for $4,200 (it was $2,300 new) to a Professor from Cal Tech for his son to tinker with. 

Mom bought me (43) and my daughter (21) 1987 twin red Honda Preludes. After several years, someone bought Kristi a Ford Explorer, while I, on the other hand, was content to keep driving my Prelude forever. I loved that car.

In 2002, three cars crashed together and smashed into my Prelude. Insurance gave me only $3K for a car that was pristinely maintained, was just serviced and had brand new tires, not to mention a complete service record which I kept in a book with receipts. I had to buy a new car. A 2002 Honda Accord black Coupe with leather interior, moon roof and a spoiler on the back. I finally just paid it off after six and 1/2 long, bitter years. During those years, I had oil changes, one new tire and an alignment. I have just under 20,000 miles. It is like new.


As far as I'm concerned, the Big 3 do not deserve to be bailed out. They can take their assembly line and blow it to smithereens. It is outdated. They will need a TON of money for the cost of the tools and dies needed to build a new assembly line; and that does not guarantee the cars will be made well and/or the first cars rolling off the assembly will meet the high expections we will be awaiting after bailing them out. It may take some more time and MORE money to refine the cars. After all that, there is no guarantee that Americans will have any interest in those cars. 

[crazybabyborg]

Lot's of wisdom in these posts. If the bailout for the auto industry could be given to the people, not just the auto workers, but certainly to the workers who would be displaced because of the industry's failure, we would all have enough money to feel much better about the economy.

I don't ever want to hear the wailing about the cost of war from those who support this bailout. What we've spent on bailing out corporations far exceeds what we've spent securing a democracy in the Middle East. Agree with the war or not, we at least know what our objectives are and what has been accomplished there, and one objective is close enough to being met that we have begun the phase of drawing down troops. The democratic process there is now moving through the second phase. Our troops will draw back from the cities, and titrate to the background, able to step in if their efforts should need support, but in a true and temporary watchdog position. And what's on the table has such impact on their own and our own security. We would be able to establish a permanent missile base within a Democratic Iraq, giving us a strategic imperative in the most volatile part of the world. When Iran threatens and rages, we are there with capabilities to protect Israel and ourselves. That's what we purchased for our future and have done that while freeing Iraqis from a bloody terroristic regime.

As bad as the terrorist's attack is that is going on in India, the target was Western civilization, and the front was there, not on American soil. That is a testament to our diligence and to a large part the weakening of Al Quieda in Iraq. We paid for that with dollars and American blood, but we did not spend in vain.

Now, we commit our children and their children to a tax bill created to rescue failed companies that have so abused their wealth through corruption, union demands, and short sightedness that it has strangled the American entrepreneurial spirit. Let the big three die knowing that if the environment can be maintained to encourage taking a risk, someone with a dream will do it better. Someone will see the opportunity and step in to take their place. They will succeed having learned from the mistakes the big three made. That someone will be Americans pursuing the American Dream, and there will be jobs created to support a healthy industry.

What are we doing?   

[WhiskeyGirl]

The Latest Song of Detroit
Barack Obama's opening to practice some tough love.

At least the last time we faced an automotive bailout crisis -- the $1.5 billion in government loan guarantees for Lee Iacocca's Chrysler in 1979-80 -- we got a great song out of it. Country-music singer Tom Paxton recorded "I'm Changin' My Name to Chrysler," and the refrain went like this:

I'm changin' my name to Chrysler.
I'm goin' down to Washington, D.C.
I'm gonna tell some power broker
What you did for Iacocca,
Will be perfectly acceptable to me.

Is my check for $1 billion in the mail?  I've been checking every day, and it hasn't arrived.

...GM suggests a federal "Oversight Board" to monitor its progress in meeting its "restructuring benchmarks."

But here's the problem: GM, by its own admission, is out of time. The benchmarks, while moving in the right direction, remain too low and too slow...

There are no painless solutions here. But amid this dismal picture, there is a real opportunity for our new president-elect. If Barack Obama can stare down the UAW, the pro-CAFE environmental lobby and the corporate-welfare supplicants by insisting on the sort of tough-love measures outlined here, he'll establish himself as a true leader. Rahm Emanuel, the president-elect's designated chief of staff, says a good crisis shouldn't be wasted. That goes for presidents, too. Can you rise to the tough-love challenge, Mr. Obama? If so, a lot of people will be singing your praises.

Lots more good reading here -
http://online.wsj.com/article/SB122835159000377899.html

Who can afford to buy GM & Chrysler cars?  A citizen of a foreign country making $5 / day? 

[GreatOwl]

I remember the song.  Arlo Guthrie used it in his stage performance.

[crazybabyborg]

You know, I keep waiting for SOMEBODY in the media to replace making the point that Americans are asking where THEIR bailout is, with this point:

Americans are suffering difficult times, filing bankruptcy, watching their property values plummet, and loosing their jobs. We are in trouble just like some of these businesses. Congress's response to THEM is to consider giving them Billions of dollars. Congress's response to us is to HIT US WITH A TRILLION DOLLAR BILL!!!

Who speaks for us when this crap is being discussed in Senate hearings? We're paying the bill, we need to be heard!

[GreatOwl]

CBB, your legislators speak for you.  That is why we need to contact them.  I know that ours are refusing to vote for any bailout until "New Page" either decides to run or sell the plant they just closed down.  Their parent company is GM.  We have a whole community depending upon those jobs.  We may not get a direct bail out monetary benefit, but by forcing some of these companies to do the responsible thing would keep people employed and able to spend.  As we have known for a long time, it is not just the money that is given to the employee.  That dollar is passed on in a community from one business to another.  Taking a complete payroll out of a community hurts the entire community.

We need to stop closing down factories and businesses.  This is something that those in northern states have been dealing with long before this crisis.  It has been going on for decades.  We not only have plants closed, disassembled and rebuilt in another country, but we have to deal with these closings and relocation in the south.  There needs to be a way of dealing with this besides asking every one to move to a southern state.  This may be one point of support for the automakers, but part of their restructuring plan is to lay off workers and even close out support for companies that they took over in times of prosperity.   We have allowed far too many mergers to the point that it is difficult to tell just who is making the decisions for our local companies any more.

[WhiskeyGirl]

CBB, your legislators speak for you.  That is why we need to contact them.  I know that ours are refusing to vote for any bailout until "New Page" either decides to run or sell the plant they just closed down.  Their parent company is GM.  We have a whole community depending upon those jobs.  We may not get a direct bail out monetary benefit, but by forcing some of these companies to do the responsible thing would keep people employed and able to spend.  As we have known for a long time, it is not just the money that is given to the employee.  That dollar is passed on in a community from one business to another.  Taking a complete payroll out of a community hurts the entire community.

We need to stop closing down factories and businesses.  This is something that those in northern states have been dealing with long before this crisis.  It has been going on for decades.  We not only have plants closed, disassembled and rebuilt in another country, but we have to deal with these closings and relocation in the south.  There needs to be a way of dealing with this besides asking every one to move to a southern state.  This may be one point of support for the automakers, but part of their restructuring plan is to lay off workers and even close out support for companies that they took over in times of prosperity.   We have allowed far too many mergers to the point that it is difficult to tell just who is making the decisions for our local companies any more.

There are many things I did not understand years ago. 

What is the difference between "free trade" and "fair trade"?  Can there ever be "free trade" if one place pays living wages and another uses workers that are paid very little or exist in a kind of slavery? 

I am reminded that about 100 years ago, Henry Ford raised the wages of his workers to $5 a day to ensure that they could afford (by saving) the products they made.  I remember reading this numerous times in my life, but it just didn't sink in.

In the I.O.U.S.A. movie, they showed a Chinese couple that made $10 a day together, saved half for the future and lived a good life.  Their apartment appeared spartan to what one would have in the west.

There is a hundred (or so) years difference.  How can workers like these making $5 a day, living on $2.50 afford a product made by people making at least $10 an hour?   How can the worker making $10 an hour compete with someone making $5 a day (or less) in the global economy?

I believe people should be paid fair wages.  I do not believe free trade will ever exist--in my mind, goods and wages will be controlled by global carpet baggers. There is a lot of inequity in standards of living over the globe.

I believe the focus should be on sustainable jobs.  I believe there should be opportunity for "fair trade".  Fair trade and free trade are not the same.  Balance things on the local level first. 

Bigger is not better.  I think the focus should be on retaining competition among smaller and medium sized companies.  Bigger government is not better, I think things are better balanced on a local level, with people in the community.

What is the worst thing that would happen if GM were liquidized?  Maybe there are pieces that can be saved with a better business environment.  I remember how good Saturn was when that brand was new.  It competed favorably with imports and had a loyal following.  At some point in the past, it was folded into the other GM business and now people I know say "let it go".  Why?  Saturn was one good thing to come out of GM in the past.  People bought their cars, some still have their old original cars.  I don't know anyone who'd buy a new one.

What's wrong with breaking GM apart and into a few smaller companies?

Can the nation afford to subsidize GM & Chrysler for $15 billion a month?  Quarter?  Would unemployment for all of these people cost $15 billion a month?  Job retraining?   Why not see if someone would be willing to buy and run a piece of GM?  Offer financing to those offering new blood?

Somehow, I do not see anyone, like another automaker, stepping up to buy off the pieces.  They're already getting those customers.  Who would be willing to risk failure on a new venture?  GM is already failed, it's just waiting for nails in the coffin. Is any money going to keep it going and make it profitable the way it is?   

Government should be working on making Social Security solvent.  Medicare and Medicaid solvent.  How much money could be saved by rolling all these government healthcare programs into one?  One administration?  One package of benefits? 

I prefer fair trade.

Where is my $1 billion dollar bailout?   Check in the mail yet?

just my humble opinions

[WhiskeyGirl]

This is a good read -

The Big Three, The Big Swindle
And The Boat We Are Missing

By Ivan Hentschel

06 December, 2008
Countercurrents.org

Mary Ann Keller, a noted automotive journalist, has been saying for years, that there would eventually only be two or three automobile companies in the world. Every day it becomes clearer that one of those will be Toyota (or some Japanese conglomerate with Toyota at the center). We are witnessing manufacturing Darwinism as the world gets “flatter” (Friedman) and GM’s position as the center of (their own) universe is passing. Must I remind you of the old adage about throwing good money after bad?

This reminds me of an old movie in which all restaurants were "Taco Bell" - after the great restaurant wars left only Taco Bell intact...

An auto assembly line worker making $26.00/hr. is currently an endangered species (that $70/hr worker is a myth). Were he/she to be re-trained to assemble/manufacture the thousands of HD TV sets that are in such huge demand, they might only make $16/hr., but they would not be out of work and in danger of losing their home...

Can someone making $16/hr really compete with someone making $5 a day, without any benefits?

I am left with three principal thoughts. Right up front, we should recognize that the model employed by Wall Street for the past several decades simply does not work. The events of the past several weeks and months have borne this out, without contradiction. Short-term, high yield greed is no way to build and maintain a robust economy. It should not be difficult for anyone to see that the net loss in earning power without reasonably equal accumulations of wealth for the traditional middle class has been both destructive and counter productive. And as far as the auto industry debate is concerned, GM, Ford, Chrysler and their minions are representatives of this failed model. Simple life support and prolongation of life as it has been is no remedy.

I must add to that a quote I read in a NYT editorial this week by Prof. Krugman. An Indian economist, Prabhat Patnaik, said that, the “free market system [demonstrates] the incapacity to distinguish between speculation and enterprise.” Put simply, greed ( unfettered speculation) is what prompts GM to have far too many “brands” (who the hell needs a Hummer, anyway?), and for Wal-Mart, Home Depot, Lowes and Handy Andy or some other home supply company or discount outlet to have a big box store on every available scrap of land in America. As Michael Moore pointed out (again) last night on “Countdown”, if no one has a job, who will there be to buy the automobiles, shop at Wal-Mart or buy even discounted clothing? If we engaged in and invested in real growth-oriented enterprise, we would not be confronted so bluntly by this dilemma. It seems that you can buy anything at Wal-Mart except logic.

How can the government ever expect to pay back these trillions of dollars in bailout loans?  Who is giving us the money?

Who's looking out for the little person on the bottom?  The one with slave papers being prepared by the next administration?  The current administration has us indentured, but I'm not seeing any way out of the tunnel.  imho

The realities and the disappointments of the Wall Street rescue plan are becoming more obvious every day, and we surely do not need to have a repeat performance when it comes to Detroit, even if it is on a much smaller scale. But we cannot merely set the auto industry completely adrift, either. We should find a method and pathway that will rescue the untapped potentials that are lying about to be optioned nearly for the taking. But, as we learned from the Wall Street debacle, that old line about “too big to fail” is too big to swallow. And this applies equally to Detroit.

What potential lies trapped at GM and Chrysler?  Should everyone go down with the ship?  Maybe there are a few lifeboats that are not gutted, rotted, and still seaworthy?

http://www.countercurrents.org/hentschel061208.htm

I only want $1 billion, I will buy a new Ford, I will spend money on a US and an island vacation next year, and I will pump this money into the economy.  I will work hard to empower the "trickle up" theory.  Is my check in the mail?

[crazybabyborg]

Great Owl, I'm not insensitive to communities or workers loosing their jobs, honest. I do get worked up over the bailout mindset, and infuriated over Congress's responsibility for their hands in creating this mess. They are not culpable for past or current actions and I think THEY are the ones that need to be reminded of their responsibility to represent us all. Looking at their role in Freddy and Fannie which was the nexus for all this causes me to have a zero trust rating for their judgement. I have no choice in this and even though it's my pockets being robbed, I have no voice, and let me tell you why.

First, I do write my representatives. The election of Obama had long coat tails. The mandate and mindset he expressed during the campaign are the exact roots that caused the Fannie and Freddy debacle. Acorn, something for nothing, lining the pockets of legislatures, and pulling up the "underclass" regardless of the risk it placed on everyone else, Huge salaries and Golden parachutes for the cronies running Fannie and Freddy with no accountability or oversight. OK, that's done and ALL Americans are paying for their crime. You would think that our voice would have at least changed the players who were responsible. Take a look, Great Owl. Obama's coat tails and the media campaign for him have brought us the return of Chris Dodd, Nancy Pelosi, Barney Frank, Harry Reid, etc. and have given them a bigger mandate. Those representatives should have been brought up on charges, IMO, not reelected.

You made the point that there has to be another solution rather than moving to the South. Let me pull that thread. Those who live in the South are equally being tapped for bailouts with their more valuable and fewer dollars. My cost of living in Tennessee is cheaper in terms of housing than it is up North, but when the deficit is raised to accommodate the escalating bailouts, the total debt doesn't respect the Mason Dixon line. When gas prices skyrocket to nearly $5.00 a gallon, or drought causes groceries prices to rise, I also take the hit with less of a shield. The obligation for that total National debt, likewise, is bigger for me and my children than it is elsewhere in the country.

The argument is that because Southern dollars go further, pay is less and therefore fewer taxes are paid. Huh-uh, doesn't work. We no longer live in a local community. Our IRA's are equally devastated and the amounts that, prior to this mess, would accommodate retirement in the South, have been raped away, our home values have proportionately plummeted and credit is no easier for us to procure than for anyone else. Cars cost us the same nationally, as does insurance, healthcare, etc.

I cannot afford to pay legacy benefits to retired persons who make more than I do. I cannot afford to pay CEOs multimillion dollar annual salaries. I cannot afford to pay Union wages and I cannot afford to pay for Luxury retreats or Congress's attitude that private sector companies in need, deserve my paycheck. Left alone I'll figure this out, but I, unlike our government, always keep an eye on my debt and figure that component into any assessment of my financial health. The debt is at least equal in importance to the spending.

The only thing I trust and believe in, is the entrepreneurial spirit of Americans and Congress is doing all they can to choke it out of individuals. Whether it's Democrat, Republican, Obama, or Bush, If a business and it's practices has failed, WHY would any responsible person take from those who are successful enough to be able to pay taxes and give to the same people running the failed business? Let them go, and make room for somebody else who will fill the void and do it better. There will be jobs if our Government doesn't make it impossible for people to start businesses, and fill that void.

I just don't get it. I don't run AIG, Chrysler, Ford, or GM, but I do know this: When my small company runs short, my paycheck is the first to be cut, and if that's not enough I personally borrow the money to meet payroll. When there is a growing profit I catch up all the bills, invest in needed office equipment and then I give my employees health benefits and distribute raises to them before my paycheck is ever increased. I simply cannot fathom the salaries being pulled in by these CEO's when their workers are in danger of loosing everything and their companies cannot limp through without pulling out a tin cup as they descend the stairs from their fleet of private luxury jets. They come before the Senate and lament how their poor workers will suffer if the hard hearted public isn't saddled with Billions to pay their bills and wave around threats that the economy will collapse if we don't give them American taxpayer dollars. Well, they wouldn't want to talk to me, because I think it's all bullsh*t. I'll tell you this; my first criteria to even listen to them would be a prerequisite that by simply coming to ask for money, they agree to hit the exit door of that company without one dime of severance. Don't knock on my door without laying that down first.

You'll never see a post from me complaining about extending unemployment benefits, tax incentives to create private businesses and therefore create jobs, or offering aid to QUALIFIED home buyers who have gotten caught in this mortgage mess. But get rid of the garbage economic practices.

There's an idea out there that's a good one. Let workers keep their paychecks for a couple of months without paying taxes. Right now, people aren't spending and it's slowing everything. Let the American worker vote with their dollars which businesses are worth patronizing. We keep talking "stimulus", well that would be a stimulus and it wouldn't be government distributed but would simply allow workers to keep what they earn for a couple of months. They are the ones that have no voice. For once, let them speak effectively. For once, let people who go to work everyday and are paying for these bailouts speak. Just a couple of months. We'd learn a lot from them.

[WhiskeyGirl]

Where to Draw the Bailout Line?
It’s time for supply-side tax cuts.

By Larry Kudlow

The bailout-nation saga continued this week as the little-three carmakers from Detroit drove to Washington to plead for a $34 billion federal package to save themselves from bankruptcy and insolvency. Hot on their heels was a devastating report of 533,000 lost jobs in November. Actually, it’s a loss of 732,000 jobs, including downward revisions from the prior two months. Unemployment moved up to 6.7 percent from 6.5 percent, a number that’s going to get worse as the volume of discouraged workers continues to rise.

So here’s the painful choice for both Republicans and Democrats in Congress: Will the political class risk a Detroit-carmaker bankruptcy that might lead to catastrophic liquidation — including, realistically, a couple million car-related jobs — all while the recession deepens and job losses mount (1.2 million in just the past three months)?
 
Meanwhile, the pressure for more bailouts grows daily. The Avis rental-car company wants a bailout from TARP...BlueFire Ethanol wants a bailout...equipment-leasing companies wants a bailout. There’s no end to it...

Is my $1 billion dollar check in the mail yet?

Corker wants Detroit to have the exact same compensation levels as the Japanese transplants in the non-union Southern states. That means moving hourly labor costs down from roughly $70 to $48...

...bondholders will have to be satisfied with a complete renegotiation of GM’s $62 billion in debt, including the union retiree healthcare fund that is under-funded by $30 billion.

What are the chances that GM will pay back any taxpayer bailout money?

...tough federal action under the aegis of oversight-board enforcement also should relieve the CAFE fuel standards that have plagued U.S. automakers. At the very least, worldwide standards should be substituted for domestic ones. Making expensive small green cars is an unprofitable business.

I had the opportunity to listen to a Congressman on the radio yesterday.  His suggestion was that 35 MPG isn't very good and I agree.  Detroit should be producing cutting edge economy.  In my mind, I wonder why they didn't innovate and make those big SUVs & other things more fuel efficient over the past 20-30 years.

"Yah...we know we're good.  You get all that comfort and change back from your dollar at the gas pump too."  What a dream - take one dollar and fill up at the fuel pump.

President-elect Obama has been cagey about the details of his massive $700 billion infrastructure spending plan and whether he’ll raise taxes on successful earners. But this new New Deal, including Obama’s middle-class tax credits, will not create permanent economic growth incentives.

What will? A genuine supply-side growth agenda to reduce tax rates across-the-board.

Will taxpayers in communities that have made investments in building and MAINTAINING roads, bridges, schools and hospitals be left out in the cold?  Will they have to pay not only for their own community, but for those that have refused to pay for anything?

It's one thing to pay for communities that have no jobs, no industry, no cash flow...

It's another to pay for communities in states that are rich and that have refused to raise taxes to provide for basic services, or to maintain existing infrastructure.

Which taxpayers get to pay for everyone?  The country is broke.  Who's going to pay to maintain all this infrastructure?  The money has to come from somewhere.

My concern is that future slave generations will have the "Obama" name on their slave papers. 

~~~ Another ripoff for the responsible.~~~

We will not bailout our way into prosperity. Nor will we spend our way into prosperity. Somebody has to stand up and yell: It’s time to cut tax rates on the supply-side. That will reinvigorate growth and infuse new spirit into a demoralized economy.

I agree.  I want to help the trickle up economy.  Is my check in the mail?

http://article.nationalreview.com/?q=Y2M5NjY5ODZiYjY1MzcxM2JmZjg0ZDcwMzBkM2EwMzA=

just my humble opinions

[LouiseVargas]

I want to say I'm very proud to be associated with such smart Monkeys. I am learning so much from all of you.

I'm not sure this is applicable, but I have a 2002 Honda Accord Coupe Special Edition. The car came with a warrantee for a number of years/miles. After that ran out, I received an offer in the mail every month from different companies to extend the warranty.

I've been extremely lucky that my car was not a lemon so I did not accept any of those offers. In 6 years, I ran over the edge of a street divider (curb) and needed a new tire and alignment. I have a dent in my right front bumper. Oil changes, etc. Nothing major. I have 20,000 miles. 

Well, thank you again for the serious  car talk.

[crazybabyborg]

I've had two Hondas, Louise; both Accords. The first was traded in with 165,000 miles on it for the second which was an Accord wagon. I stopped driving the wagon when it had 235,000 miles on it and started using it for backup transportation at work. The paint integrity wasn't in good shape and an employee asked if he could work something out to use it as a second car. His wife had gotten a job and they only had one car. I gave it to him, and it's still on the road with 315,000 miles. I admit, it doesn't look new, but I think you'd have to shoot it with an elephant gun to kill it.

I wish I had stuck with a Honda. Are you ready for this? I'm driving a CHRYSLER 300. Can I pick 'em or what??? 

I plead insanity during the time I bought it. I had a bad wreck in a Chrysler 300 that my ex bought and was paying for. The emergency workers couldn't believe the entire front seat was intact and that the passenger and I weren't killed. The car was a complete loss but I no longer had a car. I was so skiddish that I didn't drive for 3 months and when I did, I just wanted the same car that had kept us alive. 

That's what I get for crediting a vehicle rather than God!   

[GreatOwl]

CBB, first of all let me apologize if you took my reference to moving south as having to do with either the standard of living or cost of living.  It is a difficult time for all individuals and we find that more and more of our spendable income is being eaten up by tax burden.

My reference was more to a long standing process of companies moving out of Wisconsin because of either the high cost of energy or the high cost of taxation.  We have consistently ranked in the top ten states for taxation, most times 2nd or 3rd.  This is a problem that has evolved over many decades and has nothing to do with the current economy.  I am well aware that Tennessee either has or is near the top in sales tax and taxes on corporations.  I can only assume it is having much the same impact. 

Over time, a huge majority of small companies have been swallowed up by major corporations.  Company loyalty to the employee is no longer a standard within the corporate world.  Profit at all costs has driven these huge corporations now for decades.  I have no idea how a small company can stand a chance any more.  I grew up with corner grocery stores and ice cream parlors.  It was a much simpler way of life; not necessarily better.

We simply can not support our population on just tourism.  When companies move the only choice many people have is to move with the company.  It is very deceptive when our governments point out that they are "x" number of jobs available in any one area.  The major problem is that those available jobs do not pay a wage that a family can live on.  When I grew up, both my parents worked to make ends meet.  Money was difficult to come by and a family only bought the absolute necessities.  This was a time when most mothers stayed at home.  Now very few can afford that luxury. 

I guess my point in all this is perhaps I am just not comfortable with accepting the idea that "bigger is better."  We have lost a great deal of our loyalty and family closeness in the pursuit of larger profits.  I just envision that perhaps there should be more to life than just profit.  I am sure it will never change and I shall just pass on watching the world spin wildly out of control until it self destructs.  My view is in a minority, but I would certainly feel more comfortable with smaller companies who have a vested interest in surviving with their neighbors.

[crazybabyborg]

CBB, first of all let me apologize if you took my reference to moving south as having to do with either the standard of living or cost of living.  It is a difficult time for all individuals and we find that more and more of our spendable income is being eaten up by tax burden.

My reference was more to a long standing process of companies moving out of Wisconsin because of either the high cost of energy or the high cost of taxation.  We have consistently ranked in the top ten states for taxation, most times 2nd or 3rd.  This is a problem that has evolved over many decades and has nothing to do with the current economy.  I am well aware that Tennessee either has or is near the top in sales tax and taxes on corporations.  I can only assume it is having much the same impact. 

Over time, a huge majority of small companies have been swallowed up by major corporations.  Company loyalty to the employee is no longer a standard within the corporate world.  Profit at all costs has driven these huge corporations now for decades.  I have no idea how a small company can stand a chance any more.  I grew up with corner grocery stores and ice cream parlors.  It was a much simpler way of life; not necessarily better.

We simply can not support our population on just tourism.  When companies move the only choice many people have is to move with the company.  It is very deceptive when our governments point out that they are "x" number of jobs available in any one area.  The major problem is that those available jobs do not pay a wage that a family can live on.  When I grew up, both my parents worked to make ends meet.  Money was difficult to come by and a family only bought the absolute necessities.  This was a time when most mothers stayed at home.  Now very few can afford that luxury. 

I guess my point in all this is perhaps I am just not comfortable with accepting the idea that "bigger is better."  We have lost a great deal of our loyalty and family closeness in the pursuit of larger profits.  I just envision that perhaps there should be more to life than just profit.  I am sure it will never change and I shall just pass on watching the world spin wildly out of control until it self destructs.  My view is in a minority, but I would certainly feel more comfortable with smaller companies who have a vested interest in surviving with their neighbors.

You're right, Great Owl, and that's an excellent, heartfelt post. We're a lot alike I think, and only caring people get passionate.

I have 14 employees. Five months ago, I had 15. The lady whose job needed to be cut was in her early 50's. I hadn't been able to justify her position for months and months but she was one of the highest paid office staff. She had been essential when I first started, but had become unreliable to be at work or accomplish a task when she was there. The problem had grown to the point that others who depended on her simply did the piece they needed from her, themselves, including me, and in a slow discovery, we all learned that things went more smoothly and more accurately, when we did.

I knew she would have difficulty finding another job, and also knew that her Health benefits were important to her and her family. It took 3 1/2 months, but I finally arranged a job with benefits for her with one of the insurance carriers we deal with, and waited until the job opened up before letting her go. Oh, I dreaded it! To be employed in a small business means you meet the family, attend funerals, weddings and baby showers, and sometimes have a strong or damp shoulder. I was so afraid she would cry and braced myself when I asked her to step into my office one Friday to give her three weeks severance ( I know it doesn't sound like much, but I made part of it up by not taking my own full check home that payday. )

In the end, she didn't cry.

I did.

Hardly professional, I know. That's the first time I've ever had tears at work except during 9-1-1. I'm relaying this story only because I just can't accept what's going on or relate to it. I had to let her go, because it's my job to ensure the company uses it's money wisely and efficiently. That keeps us in business. It was right to redistribute her salary to those who were doing the job she was no longer doing, and I was able to give 3 people a bump the next month because of it, and still have a bit more every month in the bank to hedge against slow months. It was also right that I honor the loyalty she had given the company by doing all I could to take care of her.

Of this I'm positive: If my business had started out with the mindset that the purpose of the effort was to produce an inferior product, make me rich, give employees only what I was forced to give, and develop a strategy that included going outside of the company for financial security, I wouldn't have lasted 6 months. And I wouldn't have slept at night or been able to live with myself, period.

At the very least, I would really like to see a group of successful business owners tackle issues like the Big three Auto Makers. There is no prerequisite to understand running a business for a lifetime politician. Most are lawyers, and most do not live in the real world. Their world is so very different and the nucleus it revolves around is personal reelection. If it were a sales pitch problem, they'd be better qualified.

{{HUGS, Great Owl!}}

[WhiskeyGirl]

Do all nations treat their workers fairly?  Do all workers get paid living wages?  Comparable wages? 

Do all nations enjoy similar environmental, business, and tax conditions?

Is the playing field level?  I do not believe it is. 

[LouiseVargas]

Thank you for that very poignant story, CBB. I've read that the thing bosses hate the most is firing people.