We’re Taking on Water, and The Big Three are Bailing INTO the Lifeboat
November 20th, 2008Time to Put Salt on the Leeches
What a weird time we live in. I went back to college as an adult; it wasn’t all that long ago. Nonetheless, at that time, you had to be a pretty weird character to own a laser, other than the tiny ones found in CD and laserdisc players. Now you can buy a wide variety of the crazy things, for cheap. And you’re not limited to red ruby lasers, either.
I just picked up a laser for the M1 carbine I am determined to buy. It’s green, and it’s powerful. I paid about $30. I could have gone with a fancy-shmancy $300 job from a big-name company, but I wanted to see what a $30 laser was like. It has windage and elevation adjustments, and the battery is rechargeable. It might be okay. If not, it’s a fun toy to have.
Naturally, it’s Chinese. It’s sort of odd; the Chinese are our enemies, yet they supply us with a lot of great gun-related hardware, which we will use to slaughter them if we are ever invaded. And of course, they send us all those tasty melamine snacks with lead icing.
Although I am not naive enough to think the Chinese are not dangerous, it’s wonderful to see them learning about capitalism. They have lived in squalor ever since China has existed; I am told that this is the reason they like communism. It stinks, but it’s better than anything they had under their emperors. They’re getting a taste of prosperity now, and where capitalism goes, freedom follows. You can’t have a free market in a stable totalitarian state. At least I don’t think you can. If the government runs everything, they stick their noses into every trade, and business goes to hell.
Maybe increased freedom will lead to a more powerful church. On the other hand, many people react to prosperity by saying, “Never mind, ‘God.’ I can handle my own problems just fine.”
Speaking of heavy-handed government, Kim du Toit and I are on the same page RE the Big Three bailout. Like he says, the dire forecasts are wrong. Probably. Spoiled execs and hack union bosses with no marketable skills tell us millions of jobs will be lost. No, they won’t. They’ll just be moved to companies that aren’t run by incompetents or bled dry by socialist unions. We will still need cars. Auto workers will still need jobs. Other people in the industry will still need jobs. They’ll get them. Those jobs will be provided by a big Three deloused and purged by bankruptcy proceedings, or they’ll be provided by whoever buys their assets.
Do we really think American car production will cease instantly? Do we seriously believe foreign companies will immediately take up the slack, in plants on their own soil? I find those notions hard to swallow. I find it hard to believe that foreign companies could ramp up production that quickly. I’m sure their factories already work 24-hour schedules. Isn’t it more likely that they (or American investors) will look to the idle workers, factories, and suppliers that are already here? If we’re going to shovel out $25 billion, or whatever the figure is, why not shovel it out to new companies that will do things right? Let’s give them loans and tax credits and give the UAW the big kiss-off. Unions were never supposed to guarantee professional wages for laborers. They were supposed to prevent true oppression. The UAW is like a tick swollen up to the size of your fist, and it needs to go. If the Big Three go bankrupt, the idiotic contracts they negotiated with the UAW will vanish instantly. Even Benny Hinn can’t manage a healing that dramatic.
It’s not just okay for the Big Three to be abandoned. It’s something we need to do for America. You can’t pay relatively unskilled laborers $140,000 a year to do their simple jobs badly. Not in a capitalist system. I can’t believe we’re even considering perpetuating it. A bailout will teach bad management and incredibly spoiled workers that their abominable practices are just fine, and that there is no need to change. We bailed out Chrysler, and look at the good it did. There was no reform. Here they are with their hands out again. Oh yeah, that worked.
You don’t give a dog biscuits for crapping in the house.
I thought the bailout was guaranteed, but apparently, Bush will be in office long enough to force these people into bankruptcy. Obama and his band of Bolsheviks won’t be running the country soon enough to force this garbage down our throats. That’s what I hear. I hope it’s true. It would be fantastic to see these companies dewormed, at last. Think how great it would be to see America make good cars again, profitably, using workers who actually have a future. As for union bosses and superfluous management people who will be trimmed out of the system, they can always get student loans and learn how to do something useful. You, too, can learn to drive the big rigs.
Either we’re capitalists, or we’re not. If we’re capitalists, then we do not use tax money to prop up utterly corrupt businesses. And the bigger a business is, the more harmful a bailout is.
People in the industry will suffer during the restructuring. That’s bad. But it’s exactly what is supposed to happen when people in a capitalist system insist on being irresponsible. If you’re getting $72 per hour, based on eight hours when you actually work four, doing minimally skilled labor, how can you expect it to last forever? How can you fail to set money aside for your future? You have only yourself to blame. You have to learn from this. You have to change.
The answer is to grit your teeth, tighten your belt, endure the lean times, and be part of the reform process. In the end, car people will have secure jobs with realistic wages and safe pensions.
Many law school graduates earn $20 per hour, even when times are good. These are generally people with big loans to pay, and they’ve spent seven years in college. How can anyone have the sand to claim a guy who turns the same bolt three hundred times a day is worth seven times as much?
I hate to see anyone lose a job, but you reap what you sow, and the unions and for decades, the union and the car execs have sown and fertilized the seeds of their own destruction. It’s wrong to help them, when we allow responsible, hard-working individuals to go bankrupt every day. It’s wrong, and it will only bring more misery the next time they want a bailout. The Chrysler mess led to this. What kind of financial holocaust will this much-bigger bailout lead to?
These loafers and parasites tell us the Big Three are too big to fail. They’re wrong. It’s America that’s too big to fail. And a Big Three bailout will help destroy her.
November 20th, 2008 at 10:24 AM
I can only agree.
Yesterday morning, when a big handout was all but guaranteed, the chicken littles were squawking that a half-million jobs would be lost if one of the Big Three went under. As the day progressed and opposition to the bailout grew, largely due to the gross incompetence displayed on the stand by the CEOs of the companies in question, the number of potential lost jobs steadily increased – first to a million, then a million and a half, then to two million. By late afternoon, just before Harry Reid announced that they weren’t going to hold a vote on the plan after all, the squawking crescendoed – three million jobs were going to be lost instantaneously if this wasn’t passed.
When I see attempts to instill fear and hysteria like this, it’s a sure bet that the people peddling the fear are lying through their teeth.
What I can’t understand is how these companies, which just a few months ago were making large profits selling SUVs, have suddenly gone from riches to rags to the steps of bankruptcy court after only a few months of slackening sales. In the world’s most cyclical of industries, what were they thinking? Wouldn’t it make sense, during the good times, to stash something – 1%, 5%, 10%, anything at all – away into a rainy-day fund to tide yourself through the inevitable downturn? And when testifying over the last couple of days, why couldn’t a single CEO answer the simple, straightforward question of how much they needed, and how long was it going to last? If I were the CEO of Ford or GM or Chrysler – or of Joe’s Bait Shop – I would know exactly how much money I had, how much I was spending per day, and how much was coming in the door. I would especially be able to answer such a simple question when I was employing enough certified accountants, lawyers and ivy league business school graduates to populate an entire medium-size city. I sure as hell wouldn’t be sitting there with my thumb God knows where going, “Ur, ur, ur, I dunno, durh…” and expecting to have cascades of taxpayer money dumped on top of me.
Back in 1980, when Chrysler asked for government help, the government reponded by demanding a detailed three-year business plan, laying out explicity repayment terms and penalties, and basically laying down the law that was going to be applied if they wanted this unprecedented government intrusion into industry to go forward. I’m not seeing anything like this coming out of Congress today – probably because they know full well that, when compared to Lee Iacocca, the CEOs they’re dealing with today are morons who can barely spell “business plan” let alone construct one. Which is not a very favorable comparison. At all.
I’m rapidly moving into the “Screw ‘Em” camp. And I live in Detroit.
Not that it matters. The whole “crisis” is all smoke and mirrors anyway, and the dreaded Worst Case Scenario being peddled is never going to materialize. They’ll come back in late January, claim that things are even worse because of the delay, and the new Congress will hand them three times as much as the doubled-up payment they’ll be asking for by then.
November 20th, 2008 at 11:55 AM
It drives me crazy when people start moaning about the poor workers who will lose their overpaid jobs. They act like once an assembly-line worker at an auto factory loses his job, that’s it, he’s done, he’ll just wither up and blow away like a discarded husk. What happened to human ingenuity? What happened to looking for another job in something — gasp — different? Of course, he might not get paid as much. He might have to actually work for his pay. Gosh darn, cry me a river.
I understand the problem with dumping a huge amount of unemployed on a job market that’s already full, it’s the boat I’m currently in, but these people act like they can only do one thing and nothing else.
November 20th, 2008 at 12:34 PM
There is an auto-manufacturing market that is doing ok in the US. It just is not based around Detroit.
November 20th, 2008 at 1:11 PM
The three greatest boondoggles in America are the UAW, teacher’s union and the University tenure system. FWIW, the inflated union salaries and benefits are only half the problem with the Big Three — no amount of money will fix the shoddy automotive product nor force people to buy the aforementioned.
No matter how much money you throw into it, at the end of the day the only thing you’ll harvest from a lemon tree — are lemons.
Oh, and something worth noting regarding China and capitalism — somewhere I heard their market described as “socialistic capitalism” — that fine pinko Marx believed overthrowing capitalism would lead to glorious global communism. Makes you wonder, have they given up on Marxism/Leninism or is this part of the master plan?
November 20th, 2008 at 2:32 PM
Let’s face it – all we’re really looking at is a reorganization and liquidation of dead weight (the unions). The non-viable divisions of the Big Three will be cut loose. There are dozens of companies that would buy viable divisions, or any assets that are modern and productive.
November 20th, 2008 at 2:57 PM
” What happened to human ingenuity?”
It probably withered at the overpriced rates they were getting.
November 20th, 2008 at 4:36 PM
You’re spot on here, The problem that the union auto workers see is that if the golden goose they now have goes, they’ll be working a McDonalds for 5% pf their previous wages, with little chance for a return to the gravy train. That is why they’ll fight like hell on this.
November 20th, 2008 at 4:36 PM
In reality, they’ll be working for Honda, at a sizable percentage of their former wage.
November 20th, 2008 at 5:41 PM
I didn’t comment at Kim’s site for tall the vitriol and ignorance displayed. Why bother. There wasn’t much said there about conservative economics. It was all horror stories of vehicles from way back and how they were treated.
But the fact is that the Detroit automakers DO sell cars that people want to buy. That’s a proven statistic.
Don’t tell me about quality. They meet or surpass Japanese. All the stories about some crappy K-car from the 80’s forgets the crappy rusting out Jap cars that hit these shores at the same time. You don’t see them on the road because they disintegrated.
There’s a Detroit Free press story on the 6 myths of Detroit Automakers.
http://www.freep.com/article/20081117/COL14/811170379
Are the UAW workers overpaid. YES!!!
Are the hundreds of thousands of the rest of us who supply them? NO!!!
Look back to the Chrysler loans of 24 years ago. The government turned a profit. Thousands of workers had gainful, uninterrupted employment because of that. Stability.
Will I get another job? Probably. Do I want that disruption? No.
Do the automakers deserve a loan? No. Should they get one for the good of the economy? Yes.
Will bankruptcy solve their problems? What a crapshoot!
Well thanks for listening whether you agree or not.
November 20th, 2008 at 7:11 PM
The problem with the Chrysler bailout is that it taught the Big Three they could make bad contracts and unappealing cars, and we would change their diapers. That’s why they’re begging for more charity now. If we let them die, the employees will end up working under better management, and the suppliers will sell to the new or reorganized companies.
I find it amazing that anyone in America is willing to help a bunch of jerks who make six figures for manual labor. Let them give up their insane wages UP FRONT, if they want help. Why should Americans who earn ten dollars an hour pay the wages of people who make seven times as much, for work that is less valuable?
November 20th, 2008 at 9:42 PM
Steve,
It is unlikely one of the foreign automakers in the US will hire many former UAW people. We have a couple of supervisors from the big 3 at my plant, and they say the difference between a US run plant and a foreign plant is the difference between kindergarden and college.