14 Responses to “2.5 Million Jobs, $125 Billion In Personal Income Lost”

1. Agnostick Says:
   November 12th, 2008 at 10:02 am

   In an interview broadcast on Tuesday’s “All Things Considered,” Patrick Anderson, CEO of the Anderson Financial Group, has some additional thoughts.

   I agree with one of the other posters in Alan Stewart Carl’s thread: Split up all the different makes clustered under the GM umbrella, and let them live or die on their own…

   Agnostick
   agnostick@excite.com

2. BBQ Says:
   November 12th, 2008 at 10:11 am

   I am for it as long as we put a bunch of conditions for the Big 3, like higher mpg cars and CEO’s being fired without huge payouts, etc.

3. Alan Stewart Carl Says:
   November 12th, 2008 at 11:30 am

   I sense we’ve moved into a phase where those of us who are urging caution will be pushed aside by these kinds of fear-inducing numbers. Not saying the numbers are off base — just that I feel like we’re entering a panic mode and that is never good.

   We absolutely must make sure we’re solving problems and not just kicking the ball down the road. It’s like giving your deadbeat brother-in-law a loan so he can make his house payments. What’s the point if he remains a deadbeat, can’t pay you back and is at your door demanding more a few months later? Sure, the loan made you feel good at the time — made it seem like you were solving problems — but you weren’t.

4. kranky kritter Says:
   November 12th, 2008 at 11:35 am

   Bite me Justin. No American needs to support mindless expenditures just because “we have to do something.”

   The government doesn’t just have to do something, it has to do something wise. That’s much harder than printing money and handing it out. The domestic auto industry doesn’t deserve a penny of taxpayer money unless labor accepts serious and substantial reforms.

   Higher-efficiency car mandates will likely sink domestic auto-makers into an even bigger hole. Due to CAFE standards, they make and sell little cars at a loss to keep the fleet average economy number at the allowable level, and they make their profits on bigger higher demand cars. Gas is on the cusp of dropping below $2/gallon with the economy collapsing. The numbers simply don’t add up when it comes to paying $4000 to $6000 more for something like a high-efficiency hybrid which may only save you in the neighborhood of $150 to $300 per year if you drive 10-15,000 miles annually. Anyone out there that really, really wants to make green high-efficiency cars a reality, I’ve got a dictum for you. Study all the details, and do the math, and figure out how to forc peoplle to pay more money for a product they don’t want, or STFU.

   Now respond and tell me what a great idea it would be to put a 50 cent or dollar tax on gas and a big tax on the most desirable cars in order to force people with 3 kids to buy a civic or a mini-cooper. I can tell you right now that the American voters will answer in unison: “No thank-you, Ivan.”

5. kranky kritter Says:
   November 12th, 2008 at 11:49 am

   Right Alan. “Everybody panic!!” Brutal, aint it?

   Never mind whether or not panic will help. Just panic. Now. Print more money. Hand it out. Send me a check for $600. Then raise the gas tax by 50 cents, costing me about the same amount. Get that money back, spend it to postpone the eviction of someone with a $350,000 laon of a house worth $25,000, and a monthly mortgage payment equal to 70% of monthly income. Awesome idea. Net benefit to me $0, $500 added to national debt.

   Let’s keep grinding these gears. Push the clutch in and out, move the shifter around, pump the gas. Let’s go, the boogeyman is coming. It doesn’t matter how the transmission works, let’s go, go, go….

6. gljunket Says:
   November 12th, 2008 at 11:53 am

   So when do you quit digging the hole deeper? When all the walls above you cave in? Why should we think the people who got us into this, can get us out? The gloomer looks doomer every day!

7. John Says:
   November 12th, 2008 at 12:02 pm

   Kranky,

   It has been proven that american automakers have no interest in making cars that are meant to keep up with the times. Without the Cafe standards they would still be making the inefficient cars they were making 40 yrs ago. They obviously need that push to force them to reinvest in D&D of things other than seats that warm your ass and built in GPS devices, as well as giving huge bonuses and salaries to the exec’s. The Gov’t didn’t fail the auto-industry, the auto-industry failed America. I say let them fall apart. That’s Capitalism. Then they will be bought up and new companies will be created to fill their hole. Foreign cars are not sufficient or economical to meet the demand of america.

8. Justin Gardner Says:
   November 12th, 2008 at 12:14 pm

   Folks,

   I’ll point to the stock market, the rising unemployment numbers, the credit markets still virtually stuck and the idea that other superpowers around the world doing the same thing as evidence that this is by no means fear mongering.

   And yes, accountability is needed, but a big infusion of cash is needed too. We’ll deal with the idea of having companies that are “too big to fail” later, but at this point we can’t allow them to fail and put that many people out of work.

   Of note, look at our fiscal history. We’ve been much deeper in debt before (especially during WWII) and we dug ourselves out of that and built a robust middle class where only one parent had to work and families weren’t swimming in personal debt. We can do it again, but we need to make sure that people are working and that those who aren’t get back to work.

   In short, it’s time for some Keynesian economics because the private sector, left to their own devices, has essentially failed us.

9. Alan Stewart Carl Says:
   November 12th, 2008 at 1:09 pm

   The site ate my long reply. I don’t have time to rewrite it. Let me just say that, perhaps unintentionally, this post has a “sit down, shut up and let the government handle it” tone. Right now, I don’t know if the government is solving anything or just delaying the reckoning. I think we all need to stand up and make noise to prevent our government from throwing money down a black hole and calling the issues resolved. If we’re going to spend this kind of money on these companies, there sure as hell better be real changes implemented that ensure the problem is actually solved.

   Now IS the time to address the issue of having companies that are “too big to fail.” In any other economic condition, those companies are too entrenched and no one will act.

10. J. Harden Says:
    November 12th, 2008 at 1:20 pm

    The beautify thing here is reality. All the fear-mongering idiocy in the world doesn’t deal with the inflationary effect of these kind of expenditures. When the value of the dollar plummets and we are back to paying $4.00 - maybe $5-$6 a gallon for gas — I don’t want hear any bitching. But here’s the upside, the value of my house will double…of course the dollar will be worth half…okay….so everything pans out in the end, eh?

11. kranky kritter Says:
    November 12th, 2008 at 3:59 pm

    John, I disagree about what has been proven. We know that both high labor costs and the CAFE standards have contributed to the way in which Detroit has tried to compete, and failed to compete.

    You don’t seem to understand my point about the CAFE standards. Detroit has been selling smaller cars at a loss because for the most part Americans haven’t wanted them. And just how enduring is the current change of public opinion, honestly? In order to sell cars resembling something Americans actually want, they sell the little crappy ones at a loss so that they can also sell what Americans want to buy, at a profit. Have you ever compared a 1985 camry or accord to a 2008 model? Do,you think the camry and accord would be 1a and 1b if they were still tiny little rice boxes? You know the answer.

    The reason, if there is one, to try and save some form of these companies is not to save the companies or their execs, it’s to protect the economy, protect all those industrial workers with few transferrable skills, and to preserve consumer choice. It’s not good for anyone if the companies simply collapse, the factories close, and the government picks up the pension and healthcare tabs, as it has already guaranteed it would do if it came to that.

    I agree with you that there has to be some form of reckoning for the combined failed approach of government, industry, and labor that the big 3 automakers represent. Unlike you, I see no heroes among the UAW, GM, Ford, Chrysler, and government policy. These forces have all conspired to delay a reckoning that has been inevitable ever since our domestic industrial began to shrink, the Japanese began t make better cars, and Americans began to live 10+ years longer than they used to. Now it’s here, like it or not.

    IMO, if we don’t manage the reckoning sensibly, the collateral damage will be vast. Steel, parts, shipping, travel, car rentals, and on and on. I’m happy to agree that we ought to proceed with caution as opposed to handing out cash. But simply suggesting we let these companies simply collapse is an awful combination of blitheness (look it up) and ignorance.

    I agree with Alan that it is time to act on stuff like that. But we must act with tough love. A trite point perhaps, but there it is.

12. John Says:
    November 12th, 2008 at 5:01 pm

    Kranky,

    I lived in Detroit for most of my life. My family works in the industry. I understand what this means to let them fail. But the Big 3 have been lumbering around, outsourcing jobs, increasing executive pay, then outsourcing lower level execs where they can to save even more money, they are not doing right for america. Plain and simple. The Unions are what made those companies strong, and it’s not labor’s fault that they managed to get enough out of the industry to raise their families standard of living and life span. At the same time as they were buying out union contracts, building factories overseas and shipping off the jobs, they were taking that extra revenue, and investing it into their execs compensation. You will not convince me that forcing them to have higher standards is going to kill them, and if it does to hell with them. You ever notice why you don’t see union guys fucking up camry’s any more. It’s because they realized that the company is not looking out for them, why should they have any fidelity (look it up) to the company?

13. BenG Says:
    November 12th, 2008 at 6:17 pm

    Kranky;

    You’re aptly named, but once you got all that anger off you chest I agreed with what you finally had to say. We have got to get it right, and our greatest threat is impatience. The de-liquidating process takes time and, being that the banks have taken such losses for their imprudent lending practices in the past, they’re not willing to repeat those sins again, no matter how much money you throw at them!

    One thing that you have to be corrected on is that these ‘bailout’ dollars are not expenditures. Paulson has been very careful to explain that they are investments in equities and preferred stock in the financial sector ONLY. You’ll be reassured when you hear his update today at the press conference. He intends on keeping the TARP focused on the mandate he was given; to ease the credit freeze within the financial institutions. Although the Fed has changed their approach by not buying up the illiquid debt of these Co’s as originally intended, he’s broadened the scope to include credit card and other consumer credit co’s and he foresees none of these funds going towards any other industry.

    So I guess he heard you, thanx.

14. Jim S Says:
    November 13th, 2008 at 12:18 am

    Wow. I just decided to re-write this from scratch. I just saw Tom Friedman on Hardball say what I was about to say concerning this issue. In fact if the “auto industry” is going to get any hand up the terms have to be harsh and management has to change. The truth is that the government needs to buy a controlling interest in these companies but treat them as though they were in bankruptcy, appointing a special master to fire the CEOs, the top layer of management and the boards. Replace them with people who recognize the role that the ad campaigns run for decades have had with developing the tastes of the public for large gas guzzlers that the current leadership pretends was some kind of natural evolution. Put somebody in charge who actually respects the engineers and designers and will listen more to them than the marketing department. Fire anyone who has a terminal case of “not invented here” syndrome. Once a good product exists, then the marketing department can do its job. Otherwise our money will be wasted because they’ll just be right where they are now again. And yes, the auto workers and retirees will almost certainly need to be brought into the health system currently used by government employees to help reduce that burden. Why do you think some of us think that a new system that can break the employer/health care link is really the best way to go? And yes, there should be concessions from the unions as well. In fact, it should be made clear to the unions that they’ll have to be willing to work with the new management before a deal can even be done.

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