What To Do About GM?
Seems to me that both parties are demagoguing the holy shit out of GM’s woes and what, if anything, to do about them. Speaking for myself, I’m open to being convinced in any direction. On the one hand, I’m not in love with the idea of bailing out a company that has made mistake after mistake after mistake and whose business model is almost certainly unsustainable; on the other hand, I’m not eager to screw a bunch of workers and pensioners out of their retirements or do away with the country’s 8th largest employer, either. So what to do?
Blindly partisan crap from either side need not apply. I’m looking for even-handed, well-reasoned arguments about what to do, not demagoguery. Anyone aware of some good essays?
UPDATE: The consensus here, unsurprisingly, has been to let GM fail. Kevin at Lean Left argues in favor of a GM bailout. Check it out.
November 14th, 2008 at 3:45 pm
They will not lose their pensions. Qualified pension plans are guaranteed by the feds up to $45,000 per year.
November 14th, 2008 at 3:48 pm
…and we should take a look at Colt while we’re at it. 😉
November 14th, 2008 at 3:52 pm
And what to about every company that lines up for handouts after GM? Just as companies and now cities lined up for bailout money expect other troubled industries to show up hat in hand.
I’m against it. If a company is in trouble they need to change their business plan to be sustainable instead of borrowing money from taxpayers to keep their dying plan on life support for a few more years until it flatlines.
Most taxpayers make a heck of a lot less than the people heading those banks. For that matter most taxpayers make less than GM’s unionized workers: “total compensation per hour for the big-three carmakers is $73.20. That’s a 52 percent differential from Toyota’s (Detroit South) $48 compensation (wages + health and retirement benefits). In fact, the oversized UAW-driven pay package for Detroit is 132 percent higher than that of the entire manufacturing sector of the U.S., which comes in at $31.59.”
U.S. automakers won’t survive unless they re-negotiate unsustainable union compensation.
November 14th, 2008 at 4:11 pm
IF we bail them out we need to look at the way the place is run top down and fix it. Toss out the high paid idiots at the top that did not see the problems coming and throw out the union contracts so the company can pay a reasonable wage for the work and use the people more flexibly. No more waiting for the electrician so you can plug in a light (I have seen this) So, if you take a bail out you have to give up something to show you really want to fix the company, otherwise no money for you. . . .
November 14th, 2008 at 4:17 pm
JD, the biggest problem I’d have with a bailout of the auto industry is that things like this don’t come without strings attached. Basically the government will be buying a means of controlling the industry, which is another step towards socialism.
On the other hand, there’s no guarantee that giving them money right now will fix anything long-term. My guess is that it won’t. But by letting companies believe they will be rescued is a bad idea… because then it will become more common for companies to be irresponsible and lose accountability.
November 14th, 2008 at 4:18 pm
I personally feel that a bailout would hurt the rest of the country harder than the GM employees.
Sorry, but if my company goes under (and it’s a Fortune 500 company with a lot of employees), nobody cries about me losing a job and I don’t want you to have to pay for it. The size of the company doesn’t change that.
Let ’em fail. Let Hyundai buy them out. I don’t have a ton of sympathy for union workers who inflate their wages beyond what they really should earn. It’s a shitty situation, but we can’t go bailing out every failing industry without sucking needed funds from the very people required to buy the products needed to sustain the industry in the first place.
November 14th, 2008 at 4:18 pm
Let them file for Chapter 11, reorganize and start producing again.
The UAW will pitch a hissy fit, but it’s the only way to prevent the big three from becoming a black hole where my tax dollars go.
We have enough of them already.
November 14th, 2008 at 4:25 pm
GM designs some really nice vehicles. In fact, GM reliability is outstanding for some vehicles runs and horrible for others. And it usually corresponds to the Union negotiations.
GM vehicles built at the right plants at the right time can last 400,000 miles. And yet, many kick the bucket at 145,000 (Chevy Cavaliers almost as if on a clock.)
The big problem as I see it, is that the U.S. Government coerced and forced the big three, GM in particular. Into indentured employment. They were pushed into providing pensions, large benefit packages with the promise that the U.S. government would maintain beneficial trade policies.
Then the .gov did an about face for free-trade. GM is left in bondage to the unions. When business is down they still have to pay workers. When their workers die, they still have to pay the salaries to the wives and children. On top of that, they’re competing against companies that either have much reduced wage costs (Korea, China, etc). Or they’re competing against Japanese companies who do not have to cover medical or retirement. The end result is that we’ve placed GM in a predicament where they are paying $73/hr per worker package versus Toyota who is paying $48/hr per worker package. That’s a significant difference. And the Japanese government does not make it easy for U.S. to export cars.
GM later got screwed by California with the EV1 project. California dictated that 2% of vehicles would have to be zero emission. So GM invested over a billion dollars into research and development – the GM Impact/EV1 design.
Toyota and Honda decided to take the easy road. They developed hybrids. Argued that they could put more than 2% on the road and that they’d reduce the oil consumption. Truth be told most hybrids only get 3mpg-8mpg over their standard counterparts. But California decided to drop the 2% requirement and accept the Japanese automakers hybrids instead.
The result, GM got !@#$% over. Then when they canceled the EV1 because no one wanted an $80,000 2-seater with limited range and comfort. (Heck, Honda’s Insight got cancelled. No one wanted a 2-seater with unlimited range and 75mpg for $20,000+. And they could not make the vehicle profitable.) But thanks to that decision, GM faced the worst image crisis of any auto-maker when a twit released “Who Killed the Electric Car”. Meanwhile, people continue to jack-off to Toyata thanks to the Prius. Never mind that Toyota has raked in billions of dollars in profit, and should be at the very forefront of electric vehicle design.
So it’s a tough call for me too. But I think that .gov has mucked around in GM’s business so much, that of any companies that are deserving of help – it’s GM.
But they help they need is to be legally absolved of their obligations to the unions. (Not going to happen.) What’s going to happen is the government is going to buy a 20% stake in GM if, and only if, it bends over even more to the unions.
Sad….
I want my America back!
November 14th, 2008 at 4:29 pm
Any number of ‘foreign’ car companies have US plants that build quality cars profitably. GM is capable of making fine cars as the truly world class Corvette, Cadillac CTS, and Opel based Saturns attest, but not profitably. The difference? Exhorbitent union wages and benefits.
Let the auto companies fail. They’re basically animated corpses at this point anyway. Someone can buy the assets, and start fresh without the legacy costs and UAW baggage. What about the workers tgrish will ask? They get a lesson in why bleeding the golden goose dry is a bad idea, and the hard working ones get a chance to work at market rates.
And the managers who didn’t have the stones to play hard ball 30 years ago when the imports started making real inroads? Well, they can go the way of the Edsel.
November 14th, 2008 at 4:47 pm
Well, that’s all fine and dandy, but help by who? The very .gov that f*&ked them over to begin with?
November 14th, 2008 at 5:00 pm
A free market, that is to say, one in which coercion is banned, allows businesses to fail. Such failure comes about regularly, as free people make their own business decisions, and free people make their own purchasing decisions. This system is inherently democratic– we “vote” with our buying, decisions, and with our hiring and firing, and business model decisions.
If GM had been allowed to fail back in the ’80s, there would have been, as with all failures, some temporary pain. What this debate almost totally ignores is the benefits of such failures. They open up new opportunities for businesses that have superior business models, and thereby, in the long run, it’s win-win.
After all, it’s not as if the American people will stop using automobiles if GM fails, and it’s not asd if the auto workers will have no place to go. We will simply be getting automobiles from, and the workers will be working for, companies that can manage themselves without repeated inflows of taxpayers’ money to prop up lousy business practices.
There are many examples of failure leading to success. Harley Davidson employees pooled their resources and took over operations after EMF was ready to axe all Harley production, after which the company grew impressively and improved the product immensely. Last I knew (this was a few years ago) Harley could barely keep up with the demand. This type of thing happens every day in smaller businesses.
Propping up GM is merely the act of subsidizing failure, while clamping down (very unfairly I might add) on those companies that would better serve the market. The small, hungry, innovative start-up companies are being cheated out their opportunity when we subsidize the big failures.
November 14th, 2008 at 5:51 pm
Saying this with an informed sense of the economic consequences…
Let GM, Ford and Chrysler fail. Any “bailout funds” handed to them at this time is a waste. We have bankruptcy courts to handle these circumstances.
The worst (but not only) problem that all 3 face is the cost of their union labor contracts and the costs of pension and medical benefits to retirees. Bailout money won’t fix these problems, but will drag this out further–until the money runs out. Then they come back with the same problem.
Bankruptcy offers the possibility of an actual fix for the problem at hand. Bankruptcy courts can force changes in such contracts as a part of reorganization efforts. Bringing union labor costs in line with what non-union auto manufacturers pay would go a long way toward solving the actual problem.
November 14th, 2008 at 6:06 pm
See, on paper I’m down with letting GM fail, but I can’t get past the idea of cavalierly letting them out of their obligations — to other companies, to tens of thousands of employees and retirees, etc. It would give me less pause if the executives also had to suffer, but for most of them, their golden parachutes are secure. But as it is “letting the market do its thing” pretty much always boils down to “the rank-and-file employees get screwed the hardest.” Maybe some people here are okay with that, but I’m not among them. [This isn’t to say that I think the workers shouldn’t have to sacrifice or experience some pain here, just that I don’t think they should be on the receiving end of the overwhelming majority of that pain, which always seems to be what actually happens in these cases.]
Finally, think some of the commenters here are too quick to pin too much of GM’s fate on its high labor costs. No doubt, that gives them less room for error than most, but to my understanding it’s a gross oversimplification to blame all or even most of GM’s problems on its labor costs.
November 14th, 2008 at 6:55 pm
“But as it is “letting the market do its thing” pretty much always boils down to “the rank-and-file employees get screwed the hardest.”
t; This subject is much more broad and far-reaching than the narrow focus of the current debate. Under laissez-faire, each individual knows that his choices in life are his to make, and the potential consequences are his to bear. Take that simple formula away and people start to make different choices. You are free to choose where you apply for a job, just as the corporate boards are free to make contracts with the upper management, and the investors are free to choose which stocks to buy. If you take a job with a big corp that has bad practices, or you take that job without looking into it sufficiently, and you go into debt relying on a permanent job with this corp, you’ve made a poor set of decisions. To take the pain out of poor decisions is to promote more poor decisions, and everyone looses.
Again I say; it’s not as if we’re going to stop using automobiles and it’s not as if there will be no auto workers’ jobs if this or that company fails– it will simply be some other company that supplies those automobiles and those jobs– one that operates more responsibly. In that case everybody wins in the long run.
But the benefits don’t stop there; people also learn, very quickly, that making the right choices in life is very important. The benefits from that are immeasurable, but very real.
Using the analogy of Natural Selection; if primitive apes were “bailed out” by some alien race before the evolution of Homo Sapiens, we’d still be in the trees. Furthermore, the more intelligent primitive man/apes would not have had their genes selected, i.e. the better business models are not allowed to dominate, and the “business species” fails to evolve.
When government intervenes, the natural selection process that favors excellence is frozen out. You get stagnation followed by decay as was seen so clearly in the Soviet model, among others. In business, we’re not talking about people dying, or even people failing necessarily. We’re talking about business models failing, allowing better ones to take hold in a very dynamic, ever-changing market. That means you may lose your job with the poor business, but you may also get a job with the better business (if you’re any good at it) in which case you are better off in the long run, along with the customers, suppliers, investors, et al.
November 14th, 2008 at 7:20 pm
My position is to let them fail. That is not going to happen. So the next best thing to do is to require they be placed in receivership before they get any money. The current executives be released, and the union contracts renengotiated.
I do not believe in labor problems. Every problem in a company of any size is a management problem. That is why we have managers. Obviously the managers in this case were not up to the task. Are the unions a problem? Yes they are. But management could have taken their responsibilities seriously and not succumbed to the pressure. Instead they thought, so what? We’ll just pass the cost on to the consumer. Competition from better managed companies ruined that for them. Now they want my money, of which I already have too little keep them afloat and they still have incompetent management. No thanks.
Since we all know that the current debate of “should we bail out automakers” is just a dog and pony show before we are told “after careful consideration we have no choice”. Put them in receivership and force upon them good management practices.
The marketplace is no different from any other part of the universe, it hates a vacuum. If we were to let them fail, the vacuum would soon be filled by better managed companies, with more reasonable costs,and the suppliers affected would end up making parts for the new and better company. But as stated above, that isn’t going to be allowed to happen. So the very least we should do is place them in receivership where their every action requires examination and approval.
November 14th, 2008 at 7:20 pm
“Anyone aware of some good essays?”
t; Absolutely. She’s been maligned by the left for decades, such that she is the spawn of the devil in most social circles. That’s why you’ll want to get a copy of Ayn Rand’s “Capitalism, the Unknown Ideal”.
It’s difficult reading by even most university standards, but I know there are things in there you’ve absolutely never seen anywhere else, and so it is worth it. Start in the back with the two essays; “Man’s Rights” and “The Nature of Government”.
If you’re head doesn’t explode, I’d like to hear from you after you’ve read it.
November 14th, 2008 at 7:53 pm
straightarrow:
That’s probably something I could live with. Also, I have no problem with punishing union leadership along with company leadership — they, too, had a hand in getting to where we are.
Lyle:
I’ve often quipped that the type of “laissez-faire” system you advocate for is the type of thing that looks great on paper, but which has no prayer of actually working in the real world. Why? Because it completely disregards human nature, and it ignores the very real fact that plenty of people find themselves at a severe disadvantage through no fault of their own, while others find themselves at a serious advantage by pure luck or accident of birth. And once you’re in a situation where not everyone is equal (which, I believe you’ll agree is the natural state of affairs), then you’re going to have some parties with quite a bit of leverage over other parties. And human nature says that much of the time, the party with leverage will take advantage of that leverage, often to the level of exploitation.
Now maybe that sort of arrangement is appealing to you, but I’m not sold. Call me quaint, but I think social justice is a worthwhile goal, and one that we ought to pursue and build into whatever system of governance we agree upon. No, I don’t want to go the Marxist route and make everyone equal by force; nor do I want to somehow outlaw or punish wealth. I just want a system in which the American Dream — work hard, get ahead; work really hard, get rich — isn’t just something we say, but something that’s actually at least within the realm of possibility for most people.
I’ve said it before, and I’ll say it again: pure capitalism and pure socialism are both bad, and ironically they both lead to roughly the same results — a corrupt, wealthy ruling class exploiting the masses. This is why I consistently argue that any system that has a prayer of working and being sustainable has to contain aspects of both socialism and capitalism, with neither one gaining too much of an upper hand over the other — they must be in constant tension.
D’oh! I’ve gone and hijacked my own thread! Sorry ’bout that! 🙂
November 14th, 2008 at 8:01 pm
GM workers make, on the average, more than twice what the average manufacturing worker makes (and a lot more than the people who work for Toyota, VW, etc. in the US). If we’re going to bail out failing companies to protect the workers, is it smart to pick the most highly paid workers in all of manufacturing? Furthermore, GM retirees have a gold-plated medical plan: $2 a year for all your prescriptions. The rest of us get Medicare. Sure, you can sympathize with them. But there are many, many people a whole lot worse off.
November 14th, 2008 at 8:02 pm
As noted above, their pension plans should be protected by insurance, either the federal government or by private parties. That means that it’s not a question of whether we’re bailing out GM’s incompetence, but how much we’re doing so.
On the other side of things, GM can’t be saved at this point. It’s paying its workers an average hourly pay roughly equivalent to a 160,000 USD salary for work that’s not worth even half that, between dollars and benefits, and just last year it posted a loss equivalent to a fourth of its total assets. Its products (like the rest of the big three, I’m sad to say) are complete crap. You could keep the name afloat, but only by completely remaking the company from the ground up, and the name’d probably only hurt them.
There are a lot of good solutions, but I can’t think of any that are politically viable. Bailing them out seems like the worst of many options; not only adding to the moral hazard, but providing more political leanpower for further bad decisions to be enforced by government mandate should someone with a level head on his or her shoulders ever get stuck with GM.
The real people it’ll fuck up is the employees currently working there.
November 14th, 2008 at 8:12 pm
tgirsch, I think I can safely say that social justice doesn’t mean jack. Oh, it’ll make a lot of newsprint, and a lot of people will “care” and “want change”, but you can have a very ‘equal’ society that I certainly would not want to live in, and an incredibly unequal society that still roxxors your boxers.
You can have the exact same odds at success as Bill Gates at the lottery, but the lottery still isn’t a good investment. You can have a thousandth of what Bill Gates has, and be very, very content.
The Pareto Principle is inescapable and meaningless. What matters is quality of life.
November 14th, 2008 at 9:24 pm
I for one welcome our glorious new 600-MPG Trabants built in our worshipful Leader’s fabulous Palace of Automotive Industry combining all the best aspects of GM, Chrysler, and Ford and California Emission Controls and driven by the effervescent sparkling pixie-dust fuel of Rainbow Unicorn farts.
November 14th, 2008 at 9:38 pm
tgirsch, if the union contracts were renegotiated or revoked, the union leaders would be punished. The power loss to them would be astronomical.
I was very unpopular more than once when I was in management, because I always held that there are no labor problems, only management problems. If they come in the gate everything else is on you. If they don’t, you hire people who will come in the gate. If you treat them well, pay them appropriately, and treat them with respect you will be much more successful than the average manager, even compared to those managers with thoroughly satiated work force.
I never had a labor problem, not once. Only management problems. It was a given that if my company had run a project into the ground and beyond salvage, send me in. If I couldn’t save the situation, I could be blamed and nobody would care because I wasn’t in the ‘club’. I never failed to save any project I was sent on. The reason, I hired good people or trained people I inherited to be good people, then let them do their work and showed them the respect they earned.
The biggest thing I ever noticed on either side of the tools, I worked both at different times, was that the very first thing the workers would do when a new policy or edict came down from on high was to figure out how to game the system so they could accomplish the task in spite of the policy and not be fired.
Management is supposed to manage, not make excuses for why they can’t get it done or why it isn’t their fault. If they can’t do that, all the MBA’s in the world are useless.
November 14th, 2008 at 9:42 pm
As a student of cultural anthropology I can assure you that after 50+ years of studying and watching Human Culture there’s absolutely no such thing as social justice. If there were we wouldn’t have any “society” at all.
To put it as an Atheist might; it exists only in the atmospheric place where Believers and the Faithful gather to hear the wisdom and stories of their invisible sky-friends, and pour out their prayers in MC Escher visions of smoke and mirrors.
November 14th, 2008 at 10:24 pm
“…the party with leverage will take advantage of that leverage, often to the level of exploitation..”
t; I know that is the age-old argument, but what you describe has a simpler name. It’s called crime. That’s what government is for– to protect basic rights by punishing (retaliating against) crime.
“…pure capitalism and pure socialism are both bad…”
How so? Do you have any proof of that? Any evidence? Have we ever seen pure capitalism? If so, I’d like to know. Give me an example. I’ll bet you a case of beer that any example you attempt to give will in fact be an example of what happens when government get its nose into the market, creating some form of monopoly.
I’ve been all through this many times before. Please read the book, or I’ll be forced to re-write the whole damned thing right here. Trouble is; that would take months and I’d go broke wasting my time writing. As I said, you haven’t seen this stuff before, and so you’re falling into all the old traps. You need some genuine de-programming. I know that sounds really insulting and condescending, but the same is true anytime you try to tell an alcoholic he’s an alcoholic. This is damned tough stuff. I’m saying here that you’re addicted to a belief in government-sponsored coercion. You’re convinced that it has a proper place in a free society. I’m saying that that is a contradiction in terms.
The coercion pushers have gotten to you and got you hooked. You’ve grown up with pushers and you’ve known nothing else. The same happened to me and it was a tough, slow, painful withdrawal. Even still it’s one day at a time. I have to go to regular meetings with other people struggling with the destructive effects of believing in socialist theories. Oh sure, I thought a little bit here and a little bit there would be fine. A lot of people do it just to get along in social situations. Lots of people think like that, but a little bit is never enough, is it? You always end up needing another fix, and there’s always another pusher ready and willing to sell it to you…
“Hello; My name is Lyle and I’m a recovering socialist…”
You have to first admit you have a problem before you can take the steps to solve it. Your original post is a good start– you’re asking questions. That’s good, but you’re fighting the answers because they go against everything you’ve ever known. If you really want the answers, it’s going to take a lot of effort on your part. It will be time-consuming and it will be painful. Some of the people you thought were your friends are going to chastise you. Stay strong. Only you can help you, but we can help point you in the right direction. You will have friends.
November 14th, 2008 at 11:56 pm
“But as it is “letting the market do its thing” pretty much always boils down to “the rank-and-file employees get screwed the hardest.””
OK, but lots of companies go out of business. Why not save all of them?
Because we can’t afford to and we shouldn’t. Unprofitable companies need to go under to make money, people, and marketshare for profitable ones.
And of all the workers to feel sorry for, United Auto Workers members get the least sympathy from me. They’re wildly overpaid (see above) compared to other people doing the same jobs for other companies, to the point they’ve helped bring the company to the brink.
November 15th, 2008 at 12:29 am
Lyle – word.
November 15th, 2008 at 11:53 am
Lyle:
[B]ut what you describe has a simpler name. It’s called crime.
On what planet? While I agree that it ought to be criminal to take unfair advantage of someone, the overwhelming majority of the time it isn’t. Look at some of the loan products that got us into our current financial mess, for example. A no-money-down ARM mortgage with a 110% loan-to-value ratio and interest-only payments? I defy you to find anyone with even an ounce of scruples who would vouch for such loans as anything other than a rip-off.
Now you could argue that the people taking out the loans were stupid or desperate or both, and you wouldn’t get much argument from me on that. But the fact remains that the lenders were clearly taking advantage of the naivete/stupidity/desperatoin of the borrowers — often even actively working to assuage the borrowers’ misgivings, by telling them that they could always refinance with better terms at a later time — and there wasn’t a thing illegal about it. So I agree, it ought to be a crime, but the fact is, it isn’t, and “laissez faire,” proponents would argue to the ends of the earth that there’s no crime there at all.
That’s the type of thing I’m talking about.
Have we ever seen pure capitalism?
No, but then we’ve never really seen pure socialism, either. And I’m frankly surprised anyone would dispute the notion that the natural order of things, if the market is left to its own devices, is concentration of wealth and plutocracy. Do you think the government is accelerating the rate at which consolidation is occurring, or slowing it down?
Do you know what the single best predictor is in the US of whether a person will be rich or poor? It’s whether your parents were rich or poor — it’s by far the best predictor, with no other piece of information even coming close. Contrary to the “American Dream” myth, hard work and good decisions rarely make a noticeable difference — for the overwhelming majority, it’s accident of birth and luck that gets them where they are.
Now are you going to tell me, with a straight face, that if we do away with the public programs that provide education, transportation, health care, etc., this situation will get better rather than worse? If so, I’m from Missouri…
I know that sounds really insulting and condescending,
NO! 🙂
I’m saying here that you’re addicted to a belief in government-sponsored coercion.
That’s quite a stretch. I just don’t want to play in a football game where there aren’t any officials enforcing the rules of fair play.
Ignoring your patronizing for the moment, I think we’d both agree that government does, in fact, have a role to play here; we’d just disagree as to what, exactly, that role ought to be.
In any case, it’s pretty safe to say I won’t be reading Rand any time soon. Virtually everyone I’ve met who has read Rand and liked it has a miserable view of humanity that I have no interest in sharing, even if it turns out to be the correct one. 🙂
gattsuru/DirtCrashr:
You can argue that there’s “no such thing” as social justice all you want, but if you follow that argument to its logical conclusion, then there’s “no such thing” as justice at all, and “no such thing” as society, for that matter. So basically, you’re operating from definitions that are simply not terribly useful. It’s like the masturbatory philosophical argument that “facts don’t exist”: From an ultra-technical perspective, it’s correct, but it’s a way of looking at the world that has absolutely zero utility, so who the hell gives a shit? 🙂
straightarrow:
Congratulations: So far, you’re the guy making the most sense here. As I listen to more experts talk about the issues at stake here, I’m coming to the conclusion that GM should not be bailed out — Chapter 11 is inevitable, if not now, then later — but that if the government is to “throw money at the problem,” it should throw it at saving the pensioners and helping the 20K+ people who will suddenly find themselves out of work make a transition to something else, rather than at saving a company that’s been poorly run — for reasons far broader than labor contracts — for decades. But even that kind of “bailout” is a lot easier said than done.
November 15th, 2008 at 1:24 pm
Let them fail. Why should my tax dollars go to provided wages to overpaid unions? They cut sweet deals, but the world no longer tolerates waste in manufacturing.
November 15th, 2008 at 1:30 pm
The only way I way I want to subsidize a company is by buying their products. I have no use for GM, or Apple, or The New York Times, or any one of many thousands of other companies, and I certainly do not want my tax dollars funding their bad business decisions against my will.
November 15th, 2008 at 1:32 pm
Markie Marxist sez: “Subsidize! Subsidize! Subsidize! No opportunity to nationalize the private sector, even if only partially, should be passed up! Just think, ‘What would Fidel do?'”
November 15th, 2008 at 7:40 pm
That’s not what I said. I can certainly imagine a place that is ‘socially just’ in theory, and I provided an example that was. I think it’s rather questionable whether any method will lead to such — the Pareto Principle is rather inescapable — but that’s not really the point. I just don’t see it as at all meaningful metric.
November 15th, 2008 at 8:50 pm
That’s not what I said at all.
November 15th, 2008 at 10:36 pm
Union vampires have killed and drained the corpses of American auto manufacturers, and now they want a transfusion from the rest of us. You want my opinion, get a stake!
November 15th, 2008 at 11:12 pm
http://www.iraqnow.blogspot.com/
See the entry titled ‘Bail out Detroit?’
November 16th, 2008 at 11:58 am
Markie Marxist sez: “We do need to be sure that no one brings up the term ‘corporate welfare’. Some of our people can be loose cannons, and if they inadvertently use that term it might tend to derail our prospects of nationalizing the American auto industry. I know we use that phrase a lot to bash the private sector, but we need to shelve it until we have the auto industry firmly under our (Marxist government) control.”
November 17th, 2008 at 6:40 pm
I live in Michigan about 150 miles NNW of Detroit and many of my neighbors are retired UAW. I grew up in the western suburbs of Detroit and my father worked for Ford Motor Company as a manufacturing engineer between about 1936 and 1978 except for the army in WW2. I dropped out of Michigan Tech between 1973 and 1975 and worked at the Dearborn Stamping Plant in the Ford Rouge complex and was a member of UAW local 600. I chose not to follow in my fathers footsteps and work in the auto industry after I graduated with degrees in chemistry, chemical engineering and electrical engineering.
The bailout is for the unions not the companies. GM is basically a large expensive welfare bureaucracy that on the side builds mediocre cars and trucks that cost too much. The only political way to get the Detroit auto companies away from subsidizing soft socialism is bankruptcy. The Democrats won’t do it. The companies may not survive “tough love”. The taxpayers should not be expected to pay for a business/labor model that is clearly defective.
November 17th, 2008 at 9:36 pm
t;
I think we’d both agree that government does, in fact, have a role to play here;
Yeah; protecting individual rights. Your bank loan example is perfect for showing what happens when .gov sticks its nose into the market and throws its weight around. This was a .gov sponcered failure. No lender willingly lends to people unless they’ve been satisfied of the borrower’s ability to repay (or convinced that .gov will bail them out after it goes sour). If you think that making stupid loans is any sort of path to wealth, I could use $20K right now, thank you. I’ll be looking for the check in the mail. You know where to find me. As for signing anything– trust me. Just sigh the check. When I fail to repay you, you’ll be rich, Man. Rich I tell you.
In any case, it’s pretty safe to say I won’t be reading Rand any time soon. Virtually everyone I’ve met who has read Rand and liked it has a miserable view of humanity that I have no interest in sharing, even if it turns out to be the correct one.
Then you’re admitting willfull closed-mindedness. Actually, understanding and respecting other people’s rights is a wonderful thing. It also opens your mind to how far we’ve come in the opposite direction. If that’s a “miserable view of humanity”, then we need a lot more of such “misery”.
And; you don’t ever have pure socialism because people will find a way around it. Black markets are the primary example. You can have pure capitalism, but only with regard to law and government. Small groups of people will build their own litte socialist communities from time (which will fail horribly) but the .gov will have played no part. Jim Jones being one example.
November 17th, 2008 at 10:20 pm
Your bank loan example is perfect for showing what happens when .gov sticks its nose into the market and throws its weight around. This was a .gov sponcered failure.
This shows a stunning ignorance of everything that was involved in the current banking crisis. Here’s a hint, though: “government-sponsored” stuff only makes up a very small portion of it.
If you think that making stupid loans is any sort of path to wealth
Stupid or not, a lot of people made a lot of money doing it. And it wasn’t government sponsorship that allowed this, but rather deregulation, securitization, and bundling.
Then you’re admitting willfull closed-mindedness.
Nothing of the sort. I wasn’t aware that one had to read everything anyone suggests to them, or risk being “closed-minded.” I may indeed read Rand one day, but it’s nowhere near the top of my list, and I see no compelling reason to put it there.
Actually, understanding and respecting other people’s rights is a wonderful thing.
And I can’t do that without reading Rand?
And; you don’t ever have pure socialism because people will find a way around it.
And you won’t ever have pure capitalism because it simply can’t work. You have to have rules and regulations or the wheels fly off very, very quickly. It’s “never been tried” because it’s insane. But in any case, I was only using the extremes as hypothetical examples. When the balance of power shifts too far in favor of capitalism you wind up with robber barons; too far in favor of socialism, and you wind up with Morales. And in both cases, you wind up with no middle class.
November 18th, 2008 at 3:37 pm
U.S. automakers won’t survive unless they re-negotiate unsustainable union compensation
So simple in concept, yet so difficult in application.