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Dec 2008
Big 3 Bailout - Yes/No and Why/Why Not?
Under normal circumstances I believe that Chrysler, GM and Ford should be allowed (or forced) to go through bankruptcy, or fail completely and go out of business. The very essence of a free market system is to allow this type of activity to occur unhindered by government. At the same time though, the financial crisis is unprecedented and it is not easy to just toss out a huge slice of American industry without special consideration. I believe that normally when these types of financial hardships happen, the automotive industry, like any other industry, will seek out financial assistance from the private sector and if business is worthy, they can/will strike a deal and life goes on. If the business is not worthy it can and will fail and life will go on. America has lost major Corporations before, it can happen again. This time however the automotive industry is backed into a corner. There is virtually no money to borrow and it is not necessarily their fault directly that they need the money. They have to go to the Government because there is no other money apparently. We are witnesses to a very unusual and historical event. What other choice is there other than some sort of government bail out? I suspect there is none.
What I really dislike about the government bail out concept is the likely chance that strings will be attached to the deal and the industry will to some extent be socialized. This will not bode well for the free market capital system to say the least. I believe this is taking America in the wrong direction.
Also, I wonder how well positioned the American Government is to provide the bail out in the first place? We are having a huge financial crisis after all.
So maybe they should fail, maybe not. Even if the government could bail them out (I don't think they can successful anyway) it wouldn't be a move in the right direction. But I think there is something much more important. I don't think in the end it will matter.
I have gone on record saying that America is heading directly towards a complete financial melt down. I believe that within weeks or just a few months the Global economy and the American economy are going to fall apart. I believe that the world will witness a catastrophic failure that will permeate not only the economy, but the social fabric of our nation and cultures as well. In other words, it doesn't matter if the automotive industry is bailed out - for all practical purposes the idea of selling cars will become utterly useless. There will be virtually no automotive market at all. The streets will be filled with riots.
Some very heavy comments? I base my comments on the following; The global economy has severly tanked. The cost of light sweet crude oil has drop drastically and the OPEC Nations are reluctant to cut production - this is unheard of. I believe the OPEC Nations realize that the global oil party is about to crash. The last few weeks almost every major company has announced major job losses. In recent months the government has printed huge sums of money that I believe will lead to super hyperinflation. The media seems VERY quiet about the entire affair. There doesn't appear to be a clear policy or plan coming from anyone. Its like everyone is just standing around picking there arses. I don't have good feeling about these things.
Another interesting little problem... Obama wants to put America back to work building bridges and fixing roads, something like 2 or 3 million jobs. Well.... who is going to do that work. Who do you know that can build a bridge? Know anyone just sitting around lately that has been trained in bridge building. The idea that millions of Americans can just transfer over from the jobs they just lost in all those other 'non bridge building' sectors, like computer, hospitality, financial, marketing, etc., IS ABSURD.
So lets say we magically train millions of people to suddenly fix roads and build bridges, what will be different about America?. Obama promises to usher in a new era of tax and spend. He is proposing to do the exact same thing that was tried during the great depression and during the Carter years. He is going to Socialize this country, kill the free markets and doom the economy to poverty. We will have the best roads and bridges but no economy to use them.
Everything that is happening right now is pointing towards a huge financial crash and on top of that, we have an extremely popular president that is leading America directly into the fires of Socialism at the same time destroying the free market capital system.
I don't think a bail out of the big 3 auto makers makes a stitch of sense. In the end it won't matter either way.
I am glad for one thing though - we have Rachel Maddows to help us through these tough times. With her sharp wit and clear thinking, we stand a better chance of seeing ourselves through these times.....You should pay attention to her. After the country falls apart and Rush Limbaugh is taken off the air, she will be the only one that will advise us lowly conservatives how to think and what to say in the new Socialist order. That could be ammusing assuming that China or Russia don't beat her to it.
In a nutshell - it isn't going to happen. The Bail out won't work or won't happen and by this time next year everything you know and take for granted today will be drastically changed for the worse and auto makers will be the LAST thing you will worried about. Finding food and maintaining shelter may become consuming tasks.
So I guess that leave us with a wait and see - hope I am wrong.
D. William A.
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