True capitalism died a century ago.

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there is nothing capitalistic about bailing out companies.


(don't get me wrong - I think we need to bail them out, but my point is this ain't capitalism)

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you dont care right now because you probably dont live in the area where it's taking a hit. dont worry, youll learn soon enough when it affects your area. and it will since pretty much everyone that has tie to the Big three ACTUALLY pays for their mortgages and buy many consumer goods. and when they go bust, whos going to pay for all those forclosures....? the unemployment?? you will my friend....and then when your company closes down due to the ripple affect, youll be poor little timmy not getting any presents... let a lone a paycheck

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You do understnd that the current plan is to loan $15B to keep things going until the next administration can revisit the issue and decide if/how to lend any additional monies.

Basically, Congress just decided to keep their options open and put off making a real decision until later.

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As long as you're pulling numbers out of your ass it really doesn't matter if you get the denomination right.

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Exactly.

I'd love to hear Anderson and BKK explain how to project the cost of a bailout whose outcome depends entirely on the sales of products that haven't been released yet.

More likely, the end result will be the cost of bankruptcy PLUS the costs of delaying it.

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Haters never see the big picture. That's true no matter what the issue.

The extended ramifications of this would definitely create an economic dustbowl for a ong time - out of the whole world. Like the USA or not, almost all major countries use it as a dumping ground for their excess production, and if we stop buying for too long due to the continual blows to consumer confidence all that over-capacity elsewhere will stop being used, meaning fewer jobs worldwide, less money trading hands, less profit (or large losses) all over many industries, and severe mal-investment everywhere. Nothing good will come of it.

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Most can't see beyond their own training wheels.

Others proclaim ''I've never had a problem with my Honda/Toyota'' only to learn later they are exchanged every two to three years on lease -- or it is second hand, and all the major maint. issues have already been taken care of.

Others have domestic horror stories with cars are 10-15 years old, 5 owners in, and left them stranded before the high-school prom. That 500$ car only gets you so far!

Let's also bring into focus the grand scale at which these three produce vehicles. If you're selling 4 times as many vehicles, you're going to see the problems 4 times as often. I have the same problem with computers in my repair bay. People like to knock on HP, but they simply sell more units -- thus I'm going to see them come in more frequently.

Quality was no doubt a problem of the past, Trucks and SUV's were destroyed because of high gas prices, not because 'we' didn't want them. Lemons happen - even in Toyonda Land. My sister went through 3 different Honda's before she finally gave up. Transmissions, tie-rods, creaks, rattles, fuel lines -- her damn minivan had a wheel seperation at highway speed! It isn't normal, obviously, but it takes that one unsatisfied customer to never buy again, and I can appreciate all those who bought GM in the 80's/early 90's who will never buy again -- but this is way different product.

All three, Ford and GM especially, are coming down the last straight and within yards of the finish line. To let them die now would be a shame. Mopar is my brand of choice, but that doesn't mean I would want to see Kia or Hyundai or Honda or VW fail if they were hit with the similar issues.

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The big picture, David, is this: our country isn't about propping up crappy companies with government (i.e. taxpayer) funds. Period. That may be socialism, or communism, but it certainly isn't capitalism. And those "best paying manufacturing jobs in the country" are a fool's errand. Why should an assembly line worker with a high school equivalency make more $$$ bolting dashboards into cars than a college graduate makes in, say, accounting? It just isn't rational. Unions have created a fantasy that was doomed to fade into smoke at some point. At that point appears to be upon us.

I don't think anyone wants Detroit to fail for some weird sense of personal glory. We want Detroit to fail because Detroit is hopelessly broken, Detroit can succeed on its own merits, and sometimes burning down the house and starting from scratch is the only way to fix things.

There is no innovation without failure.

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"Detroit can succeed on its own merits"

I meant to type "Detroit *can't* succeed on its own merits."

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@Silver

Because college isn't for everyone. Let's see the accountant get in and bolt dashboards, use his hands. I'm not saying assembly line work is the same thing as skilled labor in the sense of carpentry, but it's something that some people cannot do or worse are not willing to do. It is elitist crap like "the college grad should earn more" that got us here in the first place--we keep pushing people to college, whether their chosen career path actually requires it or not, thus devaluing undergrad degrees, more people need grad degrees, which are thus undervalued, thus more Ph.D.'s and so on.

Different jobs demand different things, and finding your niche in the giant economy is essential. Some jobs deserve higher compensation, but the mere existence of a degree is called credentialism and not meritocratic comepensation.

Secondly, can we get over the idea that the US is capitalist? It's not laissez-faire, hasn't been for a little more than a century when anti-trust legislation was passed and enforced. More than that, import tariffs were always meant to be protectionist tools to bolster domestic production and give a healthy advantage to our own. The emergence of true free trade in a world that does not itself practice free trade (see: other governments who have been transparently subsidizing, manipulating, protecting or otherwise organizing their own auto industries *coughJAPANcough* for decades) contributed to the downfall of Detroit. That's not CEO's; that's politics.

Do I like the "bailout" (it's actually a loan, do your research)? Not particularly, but it's a damn site better than complete collapse--which affects not just us but the entire world, since as Smegley pointed out, the US is the dumping ground for excess production. We may accrue quite a bit of debt (a bad thing), but America still drives the world economy. Don't buy the exchange rates, most foreign currencies--especially the Euro--are artificially devalued by far more socialist tactics than a low-interest loan.

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I agree.
The people against the bailout are either hardcore capitalists or just morons who want wagner out of a job.

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@David Wiles, and other bailout (bridge loan) supporters:

Here's the big picture as I see it.

1. There is a lot of talk about how it would cost more to let the Big 3 fail, and cheaper to offer bridge loans to them right now. Here is the problem. How can anyone say X < Y if X is unknown? Nobody knows how much it would really cost to bailout the Big 3. They got $15 billion so far, but no one knows how much more they will be getting when there is a new administration in the White House. With that in mind, all claims of being cheaper to bail them out is nonsense.
2. There is also a lot of talk about the millions of jobs that can be lost if the Big 3 fail. Here is the other problem. If GM, Ford, and/or Chrysler enter Chapter 11 protection, they can get rid of the UAW and unaffordable union benefits, which will allow the Big 3 to be more competitive. Changing from union to non-union jobs shouldn't be a net loss of jobs -- at least, not much of a net loss if inefficient union workers are replaced by a smaller number of efficient non-union workers. And, as the Big 3 re-emerge from Chapter 11 protection and become lean, mean organizations with world-class vehicles, their suppliers would see more, not less, business. In contrast, a bailout can arguably have the effect of prolonging the status quo of shrinking market share for the Big 3.
3. Here is the final problem. Our country is over $10 Trillion in debt. Which means every man, woman, and child living in this country owes about $35 thousand. Now, when our country is already in debt, where are we going to find the money to pay $700 billion here and $15 billion there? If we keep printing out money without the means to back them up, we will plunge our country deeper into debt, further devalue our dollar, and lead the economy into a second Great Depression. And that will be a lot more than 3 million jobs at stake.

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"It is elitist crap like "the college grad should earn more" - Miguel

That's not "elitist crap," Miguel, that's simple math.

If someone is going to invest 4+ years and tens of thousands of dollars in a higher education, yes, that investment should be rewarded with higher pay for a job that demands a higher level of skill and knowledge.

That someone in Detroit can demand $80k+/year (not to mention all the benefits) to do manual assembly labor when someone overseas will do the exact same work for a small fraction of that, then capitalism says you increase profit by taking that assembly work overseas. Simple.

If you're looking for a country that artificially inflates the pay value of its people at the cost of the populace at large (i.e. propping up - with taxpayer dollars - a manufacturing industry that cannot compete), you're living in the wrong place. Move to a socialist country. I hear Denmark is nice.

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