Paulson Doesnt Know What He is Doing.

Do you buy the industry line from the auto makers that if they go bankrupt, no one will buy their cars?

 

Where did I say failure??:huh:
You're putting words in my mouth now. I never said these plans cause failure. I said that they prolong the problem based on economic theories taught in economics classes at LSU. I also never said they were unecessary, I said I believe that they were unecessary. There is a difference... there are a lot of things I hold to be true that a lot of people out there don't agree with and in fact, on occassion in my past have I been proven wrong :yelwink2: (although its never stopped me from arguing with a brickwall). The problem with a theory like this is we can't see the otherside of the argument. We'll never have definitive proof how this would have turned out if we would have not bailed people out.

 

I did not know that.

 

You didnt? They also use to have a stake in Land Rover and Jaguar

 

How about an example where it didn't prolong it. Can't provide either and I don't have my notes in front of me to explain the intracacies of how the theory works. If you would like, and if I still have my notes and they are coherent enough enough for me organize them for someone else to read and understand, I will be glad to scan them in and email them for you to read. (thats a big if sense I recently moved). I promise this wasn't some bs theory he made up and was researching, this is one we were being taught from a book. Otherwise, I can give you the name of the book he taught from, and if it really bothers you that much, you can buy and read it yourself.

 

I have to respond to that, the UAW is not the reason why the auto industry is failing, it has to with the product. Because sales cure all, if you are making a product thats not as good as a foreign competitor, then people will buy that product. I think this administration has politicized this issue with the auto industry because of the unions, which alot of republicans are against. I do agree that their contracts need to be renegotiated. However, if 1 out of every 6th job in this country is tied to the auto industry, rather it be directly at Ford or some auto glass maker, why wouldnt they help this industry. Because if the auto industry failed in this country and 2 million people lost their jobs, that would have a devastating effect on the economy. Do you agree?

 

Seriously??? How about, people would by an inferior product at a lower price but because their costs are so high, they make an inferior product at essentially the same price. The two are very much interrelated.

 

I agree totally. In fact, I see this as an opportunity for the automakers to take a stand. As crazy as it sounds, I think they should fire every person who costs more than their competitors are paying. They then allow any of them to come to work at the new pay scale that makes sense, minus unions of course, bring in anyone else who is willing to do the work, and pray to god they can put a team together that can build cars. What the hell's the difference? They're going broke anyway. It's worth a shot.

Unfortunately, all this talk about bailout and government intervention will prevent that from happening because, wisely, the auto industry is trying to get by with the status quo and push for a bailout because they have a better shot short term with it than with the hair brained scheme I just laid out. This will work in the short term but not the long term. Their issue is not one of economic circumstance, it's just been and exacerbated by the economy. They have a fundamental flaw in their business model and if they don't fix it, it's only a matter of time.

The ideal situation would be to give them help that they pay back and then they can retool their model. This of course will never happen so I say we let them flounder. The financial industry can't crumble because if it does we are totally screwed. The automobile industry can crumble and many people will be hurt and it will last a while but we will eventually have to take our lumps. If we don't take them in this industry, it will be another. You have to pay the piper at some point.