Poll: Auto industry bailout: Should congress do it?

[SuperUberBob]

They screwed up and should pay for it.

The only issue is that the auto industry *is* Michigan. If they go down, the economy is gonna really fuck up more than it already is.

 

[stiver]

These companies go under, millions lose their job, the economy suffers, other sectors start failing, losing million more jobs, spiraling until it is 1930, and we're all screwed.

 

[Dele]

These companies go under, millions lose their job, the economy suffers, other sectors start failing, losing million more jobs, spiraling until it is 1930, and we're all screwed.

Bailing is only a temporary fix that propably helps to keep them alive for another 3-6 months

The alternative scenario: US government keeps continuously bailing the doomed auto companies while the depression lasts for another 2-3 years. Obama realizes US cant stand more debt and lets the companies eventually fall creating a massive financial tsunami, combined with the inability of government to pay for large infra projects, that causes the US absolute unemployement rate to raise from current 12.5% to 40% (Source [http://www.bls.gov/news.release/empsit.t12.htm] note that U6 which shows the real amount of "useless" people in the workforce is around double of the "official" U3). US collapses due massive expanding debt while Alaska declares independent with Sarah Palin as dictator and Cuba invades Miami.
You have been warned!

 

[Rolling Thunder]

Once again, both sides have made points that range from the myopic to the truly excellent. I, as someone who's apathy is only exceeded in scale by his ego, hereby declare this debate to be:

-Moot, as Congress has already voted to give the handouts.

-A draw, as both sides are equal in the informed, valid and clearly-presented nature of their points, have refrained from descending into either the depths of flame or hyperbole, have made reasonable and logical assumptions, extrapolated from current knowledge and made excellent points in the field of subjective morality/ethics/etc.

Khell Sennet wins best speaker.

Butters/Cuddly Tomato wins most compassionate speaker.

 

[cuddly_tomato]

Lots 'o Words

Ok Butters Cuddly Tomato, let's take everything you said as fact-filled prediction... How does billion-dollar loans to the three big auto companies solve the true problems?

So Ford, GM, and Chrysler get cash to offset their losses... Giving THEM the cash doesn't mean we the people will now suddenly buy their cars. Take me as an example, I bought an 07 Matrix in December 2006, with some luck, I will have it paid off this coming April (2yrs 4mo, purchased as a 4yr payment plan). Chances of me purchasing a new car in the next 5 or so years, only if I win the lotto. The auto industry sets their sales expectations too high, cars cost too much for how disposable/temporary the industry wishes them to be. Even if someone's car goes apeshit on them, if it's cheaper to fix than to replace, people will fix, because money's tight and cars don't grow on trees.

Or lets assume I was in the market for a new car... Yes, the American brands are desperate, and I could get a super deal on a Chevy or Dodge, but having a brain in my head, I would never buy such things at any price. Why? Shit quality, American cars crap out too easily/early while I know of Toyotas past their 15-year mark which still purr like a new car. Why else? Because if Ford is so desperate for my sale, and even more desperate for government aid, how do I know they will be around two years from now when the transmission craps out? What good is a warranty when a company goes tits up?

American brand cars are not a safe purchase, and giving money to the big three will keep them afloat for a couple months, but what happens when that money runs out? How many bailouts will it take before the US government stops shoveling money down a literal black hole?

I completely agree with everything you said there. All I was pointing out is the knock-on effect of losing these three big companies. It will be a disaster for all, including (oddly enough) their competitors because the entire economy is will be loosing one of its support structures. They won't be taking up the slack of all the newly unemployed folks who used to work for those companies, they will find they suddenly have a lot of slack of their own.

I don't think the bailout will do anything except delay the inevitable. The politicians are using that money to buy some time, time for things to recover. But I don't think things will recover unless someone takes the bull by the horns and forces big business to act more fairly and more responsibly.

Doing nothing however, doesn't bear thinking about. It would create a cascade failure of the system that would be felt right across the world.

Personally, I would prefer to see a buyout. Let taxpayers give their money to these companies, but give the government ownership over those businesses and a good share of any future profits should go back into the treasury.

 

[stiver]

These companies go under, millions lose their job, the economy suffers, other sectors start failing, losing million more jobs, spiraling until it is 1930, and we're all screwed.

Bailing is only a temporary fix that propably helps to keep them alive for another 3-6 months

That time should be used to fix the problems.

 

[Rolling Thunder]

As Keynes famoulsy said: "In the long run, we're all dead."

The problemis that, as far as I can see, America has been deficet financing in the good time. *Spectre of Keynes appears over the White House and begins following people around and harrassing them*

Keynes: No! Bad politicians! No! I said deficet finance in deppression! Not in a boom! No! Stupid politicians! You! Yes, you, in the ill-fitting suit! Where were you born? Speak up! Nebraska, you say? Nebraska! Since when did they allow bumpkins into politics! (Descends into upper-class ranting).

 

[Dele]

These companies go under, millions lose their job, the economy suffers, other sectors start failing, losing million more jobs, spiraling until it is 1930, and we're all screwed.

Bailing is only a temporary fix that propably helps to keep them alive for another 3-6 months

That time should be used to fix the problems.

They cant really force people to buy cars can they?
I really doubt their ability to create a super-car that everyone will buy in a (soon to be) depression. Automobile industry (just like estate- and construction industry) knows that when things go bad, selling of cars slows down A LOT. That cant be cured with much else than cash reserves that they can use to get over the bad times while maintaining ability to get back into action when the next boom starts.

 

[shatnershaman]

I'm against a bailout and my arguement can be summed up in the joke "Why are CEOs only buried 1 foot down? So that they can still get a handout."

 

[ShyWinter]

What? They didn't learn how to deal with this in business school? They fucked up, so why should the taxpayer get fucked?

 

[LewsTherin]

Ach...I say let them swim for it.

You promote a free market you say? Well, laissez faire rules say no/little government intervention in the economy.

But, the idiots in charge aren't the ones who will suffer for their mistakes. No , it'll be the regular guys working in the factories getting laid off by the thousands who pay for the hubris of their employers.

Socialism isn't looking too bad now, is it?

 

[PatientGrasshopper]

Ach...I say let them swim for it.

You promote a free market you say? Well, laissez faire rules say no/little government intervention in the economy.

But, the idiots in charge aren't the ones who will suffer for their mistakes. No , it'll be the regular guys working in the factories getting laid off by the thousands who pay for the hubris of their employers.

Socialism isn't looking too bad now, is it?

Are you referring to what will happen if they aren't bailed out? The bailout will only be a short term solution, the government never seems to consider long term consequences. If they bail they out they will push us farther into recession while probably raising taxes. If they don't some people will be out of a job for a while but the economy as a whole will not suffer as much.

What? They didn't learn how to deal with this in business school? They fucked up, so why should the taxpayer get fucked?

Exactly the bailout would just reward stupidity and bad business practices.

 

[Rolling Thunder]

Keynes: In the long term we are all dead. Learn that phrase, it's important, and was thought up by man so unbeleiveably clever he saved Europe from Deppression.

A small note on Darth Mobius's points: While there has been a demand slump across the world, the slump in America is notably larger than the slump in, say, for argument, Europe. Therefore, the brands such as Mazda, Saab(Saab is actually mostly owned by the Swedish government) and Vauxhall/Opel, which are not American companies but rather were purchased by American companies, willmost likely to be subject to a managerial buyout, or, at worse, Volkswagon or Mercedes or Citoren will buy them. Personally, I'd like to see the Big Three go under (well, GM) because GM is too big to be efficent. It's bought too much cack, is suffering quite badly because it expanded so much that it's diseconomies of scale have suddenly been shifted dramatically leftwards by the demand slump, and, in general, it owns too much to be either efficent or equitable.


But I sympathise with your plight Darth. One of my relatives used to run a 1999-reg Rover, and, when that went under- BAM! No spares. No dealer support. Nada. Nowt. Fuck-all. Couldn't fix it, couldn't sell it- lost about five thousand pounds on that car.

 

[Eiseman]

Goddammit, I can't even pick a side without this feeling that I'm turning my back on my own fellow Americans. If I really believed that the Big 3 should be getting these loans, then I'd be throwing their fuckwad CEO's a bone, a second chance that will quickly run out, and I don't know that they'll be able to turn around their poor, poor business practices in time. But if I say "Fuck it, you guys had your shot, you blew it, enjoy your bankruptcy!" I'd be leaving millions of my fellow Americans out of a job, expecting only a fraction of them will find employment elsewhere. And the timing couldn't be any worse; in the middle of a recession where nobody has the money to actually bail anybody out, and during a lame-duck transition of power, so no leadership.

This sucks. A lot. This situation is so far removed from my libertarian point of view that I don't even know how to approach it. I am literally at a loss here. You guys may have your opinions one way or the other, but personally, I think this one's over our heads. I've never been more relieved to have representatives who'll make this decision for me, even if it makes things worse.

 

[Swenglish]

Far be it for me to claim any sort of knowledge on bankruptcy law, but I would think allowing "the big 3" to go under would do far more damage than most people are thinking of. Ford owns Volvo and Mazda, GM owns Saab, Opel, and Holden. Not only would Congress be screwing Detroit, but good sized chucks of Sweden, Japan, Germany, and Australia. Factor in the other industries that automakers buy stuff from in massive quantities (iron, steel, aluminum, wiring, etc.) and they're just too damn big and essential to go under. Throw in precedence (that they loaned Chrysler money back in the 80's, and Chrysler has never been as big as Ford or GM) and it's almost ridiculous to consider otherwise. Even the United Autoworkers Union is making concessions (a union meaning squat if the company's out of business and all), so for those who've completely missed my point, yes, they should, and soon.

THANKYOU.

Exactly my point. I live in Sweden, and it's all over the news at the moment. As an example, we have entire cities working with nothing but the auto-industry. Killing Volvo and SAAB (Ford and GM) would be fatal to the Swedish economy. Those two can't stand on their own two legs, and the Swedish Goverment hasn't got the money or the power like the US to support them from falling.

I'm not saying that the "Big Three" deserve the bail-out since they have made some pretty stupid mistakes, but A LOT of people worldwide are going to suffer if they don't get it.

I reckon that they should give it to them "just this once" and make sure that they somehow pay back the US taxpayers. Maybe offer a discount on green hybrid cars, or ensure that the money goes where it belongs, not in some fat CEO's pocket. Like Obama said, "Use it or lose it"