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Subject: Auto bailout chatter & fallout Posted by: Perm Dude - [151134129] Fri, Dec 12, 2008, 22:06 I wanted to pull out the auto bailout stuff into a different thread, since it is fundamentally different than the Wall Street bailout talk. GM to temporarily close 20 plants. In addition, it is moving up the closing date of its SUV plants in Janesville WI and Moraine, OH to December 23rd. Merry Christmas. The original closing dates were sometime in 2010. Where this might hurt is state unemployment benefits, particularly Rust Belt states. | |||||||
| 35 | sarge33rd ID: 2011191510 Mon, Dec 15, 2008, 11:29 |
I've bought domestic, and I've import. The ONLY time I bought new, was when I was self-employed and there were HUGE tax benefits to doing so. (IOW, Uncle Sam paid for about half the car if not more.) 1986, bought an '85 Cavalier with 27k on the odo. 1988, and it had 227k on it, with a replaced alternator and catalytic converter. 1985, bought a new Renault Alliance with a 1.4L 4 cyl. 44mpg even with the A/C running. (A car which consumer reports hated and essentially called worthless.) Traded it in on the above Cavalier 18 months later, with 77k on the odo. Repairs (A/C mostly) were covered by the 5 yr unlimited mileage svc contract I bought on it. I pd $15 ea repair, and didnt pay for the tow/rental during the repairs. Had a Merc Marquis, Linc Twn Car, Cad DeVille, Pontiac Bonneville, Olds 88, Honda Accord,....they were ALL...transportation. Nothing more, nothing less. They got me from here to there and back, and thats what I expected. I tend to buy used, 2 or 3 years old and still under factory warranty. Then I put a 100k extended coverage on it, and I pay approximately half the price of a new one, with almost 3 times the covered mileage. | ||||||
| 36 | Pancho Villa ID: 51546319 Mon, Dec 15, 2008, 11:50 |
I bought a work van - 1988 Ford Winstar for $3,000 two years coming this February. 110,000 odo. One trip to Phoenix and two to Denver, and the tranny went out, costing me about $2,000. Just took it to Albuquerque a few weeks ago, and the odo now reads almost 140,000. And it runs great. So for basically 5 grand, I'm pretty happy with the vehicle. The main problem is that I had to take the back seats out, so it's highly illegal when I have kids in the back. The Dodge Grand Caravan has seats that break down completely flat with the floor, which would give me the flexibility to use the van as both a work and family car. Plus, they're dirt cheap, even for a new one. I'm just having a hard time making that move while the Ford is still driving great, though. My other vehicle, a 2006 Suzuki Forenza wagon(bought new) is kind of a POS. I'll never buy another 4 cylinder vehicle as long as I live in a mountainous area. | ||||||
| 37 | Seattle Zen ID: 49112418 Mon, Dec 15, 2008, 12:23 |
1985, bought a new Renault Alliance I think this alone should disqualify you from ever commenting about cars ever again! | ||||||
| 38 | sarge33rd ID: 2011191510 Mon, Dec 15, 2008, 13:11 | lmao Car worked great for me. drove 50k+ miles/yr and got 44 mpg with the A/C on. DOG of a car though. Bogged down with me alone it and going up a steep hill. It served its purpose....transportation and tax write-off. | ||||||
| 39 | Madman ID: 230542010 Mon, Dec 15, 2008, 13:34 |
bili -- I essentially had a $5000 discount a few years back to buy a new GM car. I looked, and read, and test drove, and hunted... ... and bought a '91 Prelude instead. They just didn't have anything I wanted. Sounds like the current management of Toyota, Nissan, Honda, etc., also failed you then, too. No reason to pick on GM given this example. | ||||||
| 40 | walk ID: 181472714 Mon, Dec 15, 2008, 13:48 |
NYT, Kristoff: Give the Auto Companies a Fair Shake I agree with the view that we cannot let the auto companies fail so fast, so hard. It would be even worse for the economy. Even though their management and business model could be to blame, I say let's give them another chance. We gave far more $ to the banking industry, which arguably did a whole lot worse. I do not think the big 3 auto companies will make it, but I do think we should throw them a lifeline to see if they can pull off an upset and rebound. | ||||||
| 41 | walk ID: 181472714 Mon, Dec 15, 2008, 13:53 | On a more personal note, I live in NYC and don't own a car. I rent about 2x a month for various weekend excursions with the family. We rent from Avis. 9 out of 10 times, it's an American car (Chevy Impala, Ford Explorer, Chrysler 300, Buick). Sometimes, I get handed to me a Suzuki cross-over, Hyundai Sonata or a Mitsu SUV. The American cars are not bad, but I must say, I find the layout of the controls and feel of the Asian cars to be superior. I don't know if I'd pay the price difference if I were buying new. However, my car rentals never allows me the opportunity to measure reliability. The cars are always on the new/brand new side. The American cars I rent are totally okay, but never anything that makes me go "wow, cool," or "I'd wanna buy that." I did feel that way about the Hyundai Sonata and Santa Fe. | ||||||
| 42 | nerveclinic ID: 26107108 Mon, Dec 15, 2008, 14:04 |
Madman Sounds like the current management of Toyota, Nissan, Honda, etc., also failed you then, too. No reason to pick on GM given this example. Why did Bili have a $5,000 discount for all those brands? I thought he was saying it was just for GM. Got your back Bili... | ||||||
| 43 | walk ID: 181472714 Mon, Dec 15, 2008, 14:06 | Uh, I think I mixed up Kristol with Kristoff. That would have both of them in stitches. Same article though... | ||||||
| 44 | Madman ID: 81110118 Mon, Dec 15, 2008, 21:59 | nerve 42 -- if you best option is a '91 Prelude, doesn't sound like any new car manufacturer is doing a particularly good job. | ||||||
| 45 | biliruben Leader ID: 589301110 Mon, Dec 15, 2008, 22:33 |
I wouldn't have bought new, except for the discount which basically paid for the new car premium. I have owned used Toyotas, Nissans, Hondas, Subarus, Mazdas - you get the picture. When I shop for a used car, I'm pretty open-minded about what I buy. As long as it's not American. My point was that GM isn't making a car I want, even with a $5000 discount, much less the $800 that gets tacked on for Legacy costs. So the argument that that is what makes them uncompetitive doesn't hold water in my book. It's that they aren't making cars, and at least cars in the segment I'm interested in, that compete with what foreign makers are putting out. For what it's worth, I kinda like the Chevy Impala, though I couldn't afford it new, and I'm not sure how well they hold up. I also liked my old Monty, but that was my first car, so I'm kinda biased. | ||||||
| 46 | biliruben Leader ID: 589301110 Mon, Dec 15, 2008, 22:37 | What we need to do is nationalize health insurance and bolster Social Security, and in so doing take that undue burden of the car manufacturers. If they still can't compete, they down goes Frasier. | ||||||
| 47 | Seattle Zen ID: 3511351514 Mon, Dec 15, 2008, 23:54 |
The way I see it, Ford, Chrysler and GM make trucks, not cars, save for those few strange old people in the middle of the country who drove Cadillacs. So I went to find some stats and much to my surprise, American manufactured light vehicle sales lap all imports three times over. Hell, take away trucks and Ford, Chrysler and GM have sold twice as many cars as all imports combined. Who the hell are buying these cars? Out here in WA, all I see are trucks and Japanese cars. True, the top five selling cars are all Japanese: Camry, Accord, Corolla, Civic, Altima. So far this year, 250,000 Chevy Impalas have been sold. Really? Where? There have been 473,000 F-Series sold so far. Yeah, I've seen plenty of them. Hey, I don't want millions of people to be out of work, but ever since some point in the eighties, there has not been a single American car I would want to own, new or used. Now, I can see the appeal of the Chrysler 300, if you lived in East Texas and needed to regularly drive 300 miles with 1200 pounds of human to haul, and you didn't care one wit about the environmental impact of your exhaust. | ||||||
| 48 | biliruben Leader ID: 589301110 Tue, Dec 16, 2008, 00:17 |
"... American manufactured light vehicle sales lap all imports three times over." I think you forgot to read the footnote. The key here is that most of those Hondas and Nissans are built right here in the good ol' US of A. | ||||||
| 49 | Seattle Zen ID: 3511351514 Tue, Dec 16, 2008, 00:45 | Sure enough. Looking at Sales by Company, US manufacturers have sold 5.9 million, Japanese 5.6 million, European 816k. That seems more along the lines of with what I have seen on the road. | ||||||
| 50 | Frick ID: 3410551012 Tue, Dec 16, 2008, 09:47 |
Re: 47 How many police cars do you see? And police cars have a fairly short life in a police department. Domestics also sell many cars to various fleets: large companies, rental agencies, etc. One of the other issues that no one has mentioned is the dealership networks of the domestics. There are many good dealerships, but there are many, many more terrible dealerships that make people want to run away screaming. Why does going to buy a car have the same social stigma as going to the dentist? Have you ever asked someone who left a dealership with a new car and had them say they got a good deal? Or have they come out wondering how bad they've been screwed. I'm sure Sarge is going to disagree with me, but that's the perception that I've experienced. Could the domestics get by with 20-30% fewer dealerships? Probably, but I don't see it happening. | ||||||
| 51 | Seattle Zen ID: 911101610 Tue, Dec 16, 2008, 11:19 |
How many police cars do you see? Cops are on bicycles or horses out here. Well, there is the Seattle PD RV that they park in the lot at the front entrance to Hempfest each year. They throw quite the tailgate party. I'm with you on the dealership dilemma. Eliminate them all, buy your car via the Net through Amazon or some such. Think of how many million kilowatts saved from not running all those kleig lights all night long! | ||||||
| 52 | nerveclinic ID: 26107108 Tue, Dec 16, 2008, 14:31 |
And sarge for a little balence... Consumer Report top 10 cars of 2008, only 1 American. green car - Toyota Prius Small sedan - Hyundai Elantra SE Family sedan - Honda Accord Upscale sedan - Infiniti G35 Luxury sedan - Lexus LS 460L Fun to drive - Mazda MX-5 Miata Small SUV - Toyota RAV4 Midsized SUV - Hyundai Santa Fe Minivan - Toyota Sienna Pickup truck - Chevrolet Silverado 1500 Crew Cab | ||||||
| 53 | Madman ID: 81110118 Tue, Dec 16, 2008, 21:40 |
What we need to do is nationalize health insurance and bolster Social Security, and in so doing take that undue burden of the car manufacturers. If they still can't compete, they down goes Frasier. I don't see the connection. Foreign manufacturers locate plants in the US all the time. The problem is that GM can't compete against foreigners when they are in the US system as it stands. Extending national healthcare / bolstering Social Security would increase the tax burden of the relatively well paid GM employees. And they'd still get their lucrative supplement plans, which they are demanding right now because our single payer senior healthcare system apparently isn't good enough for them. | ||||||
| 54 | Perm Dude ID: 4711491614 Tue, Dec 16, 2008, 21:46 |
You make it sound like workers should simply shut up, Madman. That doesn't appear to be very reality-based. (And I wasn't under the impression that you are a fan of the senior health care system--I'm certainly not--but you seem to be taking them to task for agreeing with you on the point, yes?) And the key word in your post is "relatively." This is going to sound harsher than I mean it, but that's a weasel word. | ||||||
| 55 | Madman ID: 81110118 Tue, Dec 16, 2008, 22:38 |
This is going to sound harsher than I mean it, but that's a weasel word. No, it's an acknowledgment of the fact that someone has to pickup the healthcare costs of GM workers & their families. And if you are a working individual, right there it's already hard to do that (since many in society don't work and therefore must have healthcare paid for by those who do work). GM workers are not only employed, however, they are employed at above-median wage jobs ("relatively" well off). This means that offloading their healthcare burden onto others is especially problematic. | ||||||
| 56 | Verve ID: 489482723 Sat, Dec 20, 2008, 14:10 | Here's an article about the Big 3 and bailout: 5 American Cars that Should Help with the Big Three Bailout | ||||||
| 57 | Perm Dude ID: 711382110 Sun, Dec 21, 2008, 14:37 |
Can't post it here, but this "ad" perfectly captures it, I think: Link | ||||||
| 58 | Baldwin ID: 221172017 Sun, Dec 21, 2008, 14:45 |
When they can get loans and make the payments they buy American cars just fine. I was always more than annoyed by chess commentators who didn't deserve to be in the same room with Bobby Fisher, putting question marks next to some of his moves. I am also greatly annoyed by people who couldn't judge a quality car if their lives depended on it let alone build or design one, acting like the big three made obvious errors. Errors that the diletante auto critic would have avoided if they had auto executive jobs that they themselves are far and away unworthy of. | ||||||
| 59 | Pancho Villa ID: 51546319 Wed, Dec 31, 2008, 08:57 |
Kudos to Michelle Malkin for an enlightening and disheartening expose on UAW mismanagement. Give Malkin credit for focus, instead of straying into generic attacks on "leftists" for effect. Even when she does stray a bit, her observation is right on: UAW management has proven to be a money-squandering corruptocracy with faux blue-collar trim. | ||||||
| 60 | Boxman ID: 337352111 Wed, Dec 31, 2008, 09:52 |
That is an interesting perspective PV. We hear ad nauseum about the golden parachutes and private jets for executives, but we never hear about the excess in union management (at least on par with corporate CEOs). And while the UAW and carmakers cry poor, they've operated massive joint funds for years that have paid for lavish items such as multi-million-dollar NASCAR racer sponsorships and Las Vegas junkets. The dire economic downturn hasn't changed the behavior of profligate union bigs at the front office or the shop floor. Local Detroit TV station WDIV recently caught local UAW bosses Ron Seroka and Jim Modzelewski -- both of whom make six-figure salaries -- on tape squandering thousands of hours of overtime on such important labor security matters as on-the-clock beer runs and bowling tournaments. At least the groveling Big Three CEOs gave up their corporate jets. Where's the public flogging for the greed-infested UAW fat cats reaching into our pockets to keep them afloat? Classic. | ||||||
| 61 | Seattle Zen ID: 5411323112 Wed, Dec 31, 2008, 13:49 |
I'm certainly not qualified to say what the Big Three should do in order to become profitable again as I am no expert in the auto industry. Yeah, their labor costs are sky high. But Ms. Malkin has made a simple logical error in her "exposé". Every dime the UAW spends comes from contributions of the workers. The eight figure salaries of management, country club memberships, luxury boxes, corporate jets... comes from the stockholders. I would certainly hope that the president of a union the size of the UAW makes a six figure salary. You could certainly make the argument that auto workers make too much money, but I don't think pointing to how their union spends their members contributions is an effective way of making that argument. | ||||||
| 62 | Pancho Villa ID: 51546319 Wed, Dec 31, 2008, 14:43 |
You could certainly make the argument that auto workers make too much money, but I don't think pointing to how their union spends their members contributions is an effective way of making that argument. I think when you're talking about using taxpayer money to "loan" to the Big 3, it's incumbent on us, the taxpayers, to examine how these unions spend their members' contributions. The issue here isn't the salary of the UAW president or the UAW rank and file. The issue is the UAW owning and operating a consistently money-losing golf resort, spending tens of thousands around the country on golf tournaments(likely limited to management, as well as investments in money-losing airlines and money-losing radio studios. It appears to me that the argument Malkin is making centers on whether or not this UAW management business as usual is acceptable given the current circumstances. | ||||||
| 63 | Perm Dude ID: 01129319 Wed, Dec 31, 2008, 14:48 |
If the government was loaning money to the UAW you'd have a strong argument. But you would first have to make the argument that the workers are overpaid and are a barrier to the company's long-term business health before how the workers spend their own money should be questioned. Should the union be brought to bear? Sure, by its members. Not by the government. | ||||||
| 64 | Pancho Villa ID: 51546319 Wed, Dec 31, 2008, 20:14 |
If the government was loaning money to the UAW you'd have a strong argument. It's a package deal. Otherwise, why would UAW President Ron Gettelfinger be appearing before Congress asking what concessions the union would be willing to make as a condition for government money? Should the union be brought to bear? Sure, by its members. Not by the government. I suppose, in a perfect world. I attempted to discover if there was ever a rank and file vote concerning the union's purchase of the Black Lake facility. Apparently not. There's no record I could find that rank and file members were involved in building and operating the golf course, which opened in 2000. One really has to ask what the purpose of a labor union is. Initially the purpose was to negotiate fair wages in a safe and clean environment. Then came health benefits, pensions, vacation pay,etc. Eventually, unions like the UAW became an industry unto themselves, management heavy at every turn. It may have made sense to have an educational and training facility/retreat in Northern Michigan during the Big 3's golden years in the 60s and 70s when Black Lake was purchased and built, prior to the advent of Toyota, Honda, Nissan, Mitsubishi, Suzuki, Mazda and Kia, not to mention Volvo, Saab, BMW and Mercedes. Back then it was either Detroit or a VW bug or van. Consequently, from a peak of 1.5 million members in the 1970s, the UAW ranks have dropped to just 465,000 regular members, according to its most recent federal filings, according to this article in the Union News. In the face of a two-thirds drop in membership, union leaders decided to spend $6 million to build the Black Lake Golf Course. Given that there are currently 465,000 UAW members, consider these stats from the same Union News article. Last year, 9,000 members attended classes at the education center and 13,000 rounds of golf were played, including 1,000 donated for charity events and such, Kerson said. UAW members played 4,000 of the rounds, he said. That leaves 456,000 members who didn't attend classes, and 461,000 who didn't play golf. That's assuming that none of those 4,000 rounds were by repeat players, and there's no stats on how many of those 4,000 rounds were played by union management. And as Malkin points out, Who knew hitting the links was so central to the business of making cars? In May and November 2007, the UAW forked over nearly $53,000 for union staff meetings at the Thousand Hills Golf Resort in Branson, Mo. In September 2007, the UAW dropped another $5,000 at the Lakes of Taylor Golf Club in Taylor, Mich., and another $9,000 at the Thunderbird Hills Golf Club in Huron, Ohio. Another bill for $5,772 showed up for the Branson, Mo., golf resort. On Oct. 26, 2007, the union spent $5,000 on another "golf outing" in Detroit. In May and June 2007, UAW bosses spent nearly $11,000 on a golf tournament and related expenses at the Hawthorne Hill Country Club in Lima, Ohio. And in April 2007, the UAW spent $12,000 for a charity golf sponsorship in Dearborn, Mich. Since the UAW owns and operates the Black Lake Course, why not use it for all these golf outings, especially given that the course has over 2.6 million in net losses since its inception? A typical golf tournament has 72 participants(18 foursomes in a shotgun start - a foursome beginning on every hole). Care to venture a guess as to how many of those slots are reserved for rank and file and how many for management? And, again, what does a golf tournament have to do with representing auto workers? The rank and file membership are busy worrying about plant closures and keeping their jobs. I have to think most of them would agree with the following sentiment from the Union News article: Gregg Shotwell, a UAW activist, is not troubled to learn that the education center is losing money. "When you are educating and training union members, that's the business of the union. That's never a loss," Shotwell said. But the golf course is a different story to Shotwell. "We should be running a union -- not a country club," he said. | ||||||
| 65 | Perm Dude ID: 01129319 Wed, Dec 31, 2008, 20:20 |
No one is disputing the arguments you are making about the union. All I'm saying is that government shouldn't be the entity required to look into how members of the union are spending their own money. The workers don't give up that freedom simply because labor is a large part of an auto's costs and the companies are having a hard time running their own businesses. And the UAW coming before Congress? C'mon--the union already indicating they would be willing to re-negotiate with the companies many weeks ago. | ||||||
| 66 | Boxman ID: 571114225 Wed, Dec 31, 2008, 20:27 |
No one is disputing the arguments you are making about the union. All I'm saying is that government shouldn't be the entity required to look into how members of the union are spending their own money. If they are going to be the beneficiaries of billions of taxpayer dollars via a bailout you bet the gov't should be there. Rubber gloved hands and all. | ||||||
| 67 | Pancho Villa ID: 51546319 Wed, Dec 31, 2008, 20:56 |
All I'm saying is that government shouldn't be the entity required to look into how members of the union are spending their own money. And all I'm saying is that members of the union have basically no say in how the union is spending their money. The UAW is like the government. All these locals vote for representatives, who then go to Detroit, instead of Washington, and decide how to spend the dues, instead of taxes. There's all these levels of bureaucracy that by the time it trickles down to the rank and file, the representation is so diluted as to be almost meaningless. Besides, I'm not arguing, and neither is Malkin, that government should be the entity that decides how the union spends its money. Ultimately, the entity that makes that decision is the American(and international) consumer. Every UAW due paid is reflected in the cost of a Detroit car, truck or van. The drop in union membership coupled with the drop in Detroit sales should make it obvious that frivolous spending of UAW dues is an exercise that should have been abandoned 30 years ago. | ||||||
| 68 | Perm Dude ID: 01129319 Wed, Dec 31, 2008, 21:24 |
And all I'm saying is that members of the union have basically no say in how the union is spending their money Well, if that were truth that that is all you're saying then we'd be in complete agreement. :) But you are advocating that the government root out and expose these excesses, since the companies these people work for will be getting a government bailout. That's the point that we part ways. | ||||||
| 69 | walk ID: 139332920 Sun, Jan 04, 2009, 18:08 |
End of the Financial World as We Know It A comprehensive and well-written article about what went wrong and why it may not get fixed. Fundamental change in oversight and incentives are needed. | ||||||
| 70 | jedman Dude ID: 315192219 Sun, Jan 04, 2009, 18:55 | Thanks for that link walk, what an excellent article indeed. | ||||||
| 71 | Boldwin ID: 5704850 Mon, Jan 05, 2009, 09:24 |
Best summary I've read in weeks if not a month. Buried in there however is the urge to turn this situation into socialized housing. We haven't seen the last of that. It may even become a theme of Obama's & the Dem congress for years to come. I can just see it coming...my hardworking, obscenely taxed sons will end up with homes foreclosed [having been upside down thru no fault of their own] but millions of politically connected 'most favored victim' deadbeats will end up with free houses. | ||||||
| 72 | walk ID: 181472714 Mon, Jan 05, 2009, 12:34 | Sure thing although I do not know what possessed me to put it in this thread (maybe I got hooked on the subject of "bailout," but I did not see the "auto" in the header...d'oh!). I agree this article is very good, and will point to it in the CDOs: weapons of financial destruction thread, too. | ||||||
| 73 | Boxman ID: 571114225 Tue, Jan 06, 2009, 07:12 |
$8 trillion bailout: How Obama plan fits in Sitting down? It's time to tally up the federal government's bailout tab. There was $29 billion for Bear Stearns, $345 billion for Citigroup. The Federal Reserve put up $600 billion to guarantee money market deposits and has aggressively driven down interest rates to essentially zero. The list goes on and on. All told, Congress, the Treasury Department, the Federal Reserve and other agencies have taken dozens of steps to prop up the economy. Total price tag so far: $7.2 trillion. Now comes President-elect Barack Obama's economic stimulus plan, some details of which were made public on Monday. The bill is getting awfully close to $8 trillion. I wasn't aware we had $8 trillion (or roughly 3 years worth of our operating budget) laying around collecting dust. And to think all this time would could've fixed Social Security or had one big old mammoth sized tax cut. | ||||||
| 74 | Boxman ID: 571114225 Fri, Jan 09, 2009, 18:35 |
PJB: Obama’s Choice: FDR or Reagan By Patrick J. Buchanan Barack Obama, it is said, will inherit the worst times since the Great Depression. Not to minimize the crisis we are in, but we need a little perspective here. The Great Depression began with the Great Crash of 1929. By 1931, unemployment had reached 16 percent. By 1933, 89 percent of stock value had been wiped out, the economy had shrunk by one-third, thousands of banks had closed, a third of the money supply had vanished, and unemployment had reached 25 percent — among heads of households. And in those days, there was no unemployment insurance, no Medicare, no Medicaid, no Social Security, no welfare. FDR’s answer: vast federal spending, tough new regulations on business and higher taxes — like Herbert Hoover before him, only more so. The Depression lasted until war orders from the Allies brought U.S. industry back to life. Before 1940, not once did unemployment fall below 14 percent. In May 1939, Treasury Secretary Henry Morgenthau testified: “We are spending more money than we have ever spent before, and it does not work. … I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. … I say after eight years of this administration we have just as much unemployment as when we started … and an enormous debt, to boot.” Politically, the New Deal was a smashing success, with FDR’s landslides in 1932, 1934 and 1936 virtually wiping out the GOP. Yet, economically, the New Deal was a bust, failing utterly to restore prosperity. Despite the indoctrination of generations of schoolchildren in New Deal propaganda, that is the hard truth. Consider, now, how Ronald Reagan responded to the economic crisis of 1980, the worst since the Depression. In the “stagflation” of that Jimmy Carter era, interest rates had reached 21 percent and inflation 13 percent. Reagan’s answer was the tight money policy of Fed Chairman Paul Volcker and across-the-board tax cuts of 25 percent, while slashing the highest rates from 70 percent to 28 percent. While unemployment hit 10 percent in 1982 and Reagan lost 26 House seats, in 1983 the tax cuts kicked in. From there on out, it was boom times until Reagan rode off into the sunset, having created 20 million new jobs. “The Seven Fat Years,” author Robert Bartley called them. Reagan had followed the lead of Warren Harding and Cal Coolidge, who had cut Woodrow Wilson’s wartime tax rates of near 70 percent to 25 percent, resulting in “The Roaring ’20s,” a time of unrivaled prosperity. The JFK tax cuts of the 1960s, also a Reagan model, were equally successful. Harding, Coolidge, JFK and Reagan all bet on the private sector as the engine of prosperity. All succeeded. Franklin Roosevelt bet on government. And the New Deal failed. It was World War II that pulled the United States out of the Depression ditch of the 1930s. Comes now the financial collapse and economic crisis of 2008, inherited by Obama, with 40 percent of all stock values wiped out in a year, foreclosures pandemic, and unemployment near 7 percent and surging. In crafting his solutions, Obama seems to be brushing aside the Reagan, JFK and Harding-Coolidge models, and channeling FDR and the New Deal Democrats. Already staring at a $1.2 trillion dollar deficit for the year ending Sept. 30, about 8 percent of the entire U.S. economy, Obama intends to add a stimulus package of $700 billion to $1 trillion, yet another 5 percent to 7 percent of gross domestic product. The resulting deficit would be twice as large as Reagan’s largest, 6 percent of GDP, which was the largest since World War II. And how is this Niagara of money to be spent? Hundreds of billions will go out in checks of $500 to $1,000 to wage-earners and individuals who do not even pay taxes. This is much like the George McGovern “demogrant” program of 1972, where every man, woman and child, if memory serves, was to get a $1,000 check from the U.S. government. Other hundreds of billions will go to shore up state and municipal spending. Other hundreds of billions will go for “infrastructure” projects, another name for earmarks, which is a synonym for pork. Now, as Obama does not intend to raise taxes, at least now, he is going to have to borrow this near $2 trillion from foreigners or U.S. taxpayers, or the Fed will have to create the money. Undeniably, this will have an impact upon the economy. But what will that impact be? Where in history, other than World War II, is there evidence that such a mass infusion of spending restored prosperity? Obama and the Democrats are taking a historic gamble, not only with their careers but with the country. If this monstrous stimulus package, plus the trillions in hot money, do not work; if the two ignite rampant inflation, rather than real growth, we are all out of options. The toolbox is empty. And what will follow may truly resemble the 1930s. | ||||||
| 75 | Perm Dude ID: 154552311 Fri, May 29, 2009, 10:13 |
Iococca likely to lose pension & company car in Chrysler bankruptcy. The article is written unclearly, but it seems Iococca and others holding unsecured debt with Chrysler won't get squat in the end. Sucks, for sure, but one of the few cases I know of where the executives (and a retired one at that) aren't first in line. | ||||||
| 76 | Boldwin ID: 133532810 Sat, May 30, 2009, 20:31 | One executive who actually earned every penny. | ||||||
| 77 | Perm Dude ID: 154552311 Sun, May 31, 2009, 18:43 | I agree. A hardcore democrat too, BTW. | ||||||
| 78 | boikin ID: 532592112 Tue, Jul 14, 2009, 12:34 | Did ron paul get on right this time? Maybe everyone has seen this already. | ||||||
| 79 | sarge33rd ID: 236141411 Thu, Jul 16, 2009, 17:45 |
Chrysler financial repays $1.5 billion TARP loan FARMINGTON HILLS, Mich. – Chrysler Financial announced Wednesday it has repaid in full the $1.5 billion of Troubled Asset Relief Program (TARP) government loans. | ||||||
| 80 | Perm Dude ID: 5510572522 Tue, Mar 23, 2010, 23:23 | Pay Czar trimming executive salaries at 5 companies. | ||||||
| 81 | Boldwin ID: 362262121 Fri, Mar 26, 2010, 12:04 |
Obamamotors newest concept car catches the true nature of Obama... Welcome the new EN-V You can't make this stuff up. | ||||||
| 82 | Perm Dude ID: 5510572522 Fri, Mar 26, 2010, 12:13 | If there is no demand it won't sell. If there is, what's your problem? | ||||||
| 83 | Boldwin ID: 362262121 Fri, Mar 26, 2010, 12:14 | And if that's all that envy delivers I'll keep on throwing my fate to the free enterprise system. | ||||||
| 84 | Perm Dude ID: 5510572522 Wed, May 25, 2011, 00:53 |
Chrysler repays loan six years early. Obama's re-election ads are writing themselves these days. The DNC already has a pretty good one up: | ||||||
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