Quotes of the day
posted at 9:45 pm on December 14, 2008 by Allahpundit
“What I found this year was a far cry from complacency. The ranks of line executives and engineers are thick with members of the Obama generation, who barely remember when GM was fat and happy. They are hungry to change the beleaguered company and prove its critics wrong. They are also piercingly critical of the old GM, candid to the point of eagerness in owning up to and analyzing the company’s mistakes and faults. The decades of denial are over…
In its rescue proposal to Congress, GM practically begged for a strong federal overseer with the power to force unions, dealers, and creditors to accept further retrenchment. GM wants the stick of a bankruptcy-like arrangement without the stigma of the real thing. In principle, a federal bailout could give GM a hard push into the future by wrenching its balance sheet into alignment with reality…
Whether a bailout can save GM depends, then, on which GM you think you’re bailing out, the calcified shell of the old GM or the new-economy company struggling to emerge. Given the record, counting on GM to succeed would be rash. But consigning it to fail might be even more so.”
*
“I was speaking to an extremely well-informed person yesterday who told me that he thought a GM bankruptcy would inevitably become a fire sale liquidation, create a cascade of bankruptcies of the other Detroit auto companies and suppliers, and therefore kill 2-3 million jobs. He said that he doesn’t like to exaggerate, but that this would be ‘Armageddon’. I take his concerns seriously, but there is a distribution of possible outcomes in the event of a Big 3 bankruptcy, and no matter how confident anybody manages to sound about it, the outcome is highly uncertain…
The money used for this purpose is money that is not used somewhere else. The amount that would ultimately be loaned to the Big 3 is unclear, but most observers believe that when all is said and done, it will be much, much more than the $34 billion that the Big 3 have requested. Let’s assume $100 billion. As a pure thought exercise, how many jobs could we create with an extra $100 billion of venture capital? How much more sustainable would these be than jobs in companies that need to come to Washington to beg for capital?”
Blowback
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
Trackbacks/Pings
Trackback URL
Comments
Comment pages: « Previous 1 2
I have to hit the hay. GOD HELP THIS NATION!!!!!!!!!!! TOMORROW NIGHT WE WILL TACKLE NATIONAL SECURITY WITH STAR GAZER. He needs some good ol’ fashion conservative brain drillin’. don’t know though. He seems to be stuck in opposition mode. Lube the gears there gazer buddy.
katy on December 15, 2008 at 12:07 AM
Central planning fosters oppression, central planning fosters servitude, central planning fosters cruelty; more abominable is the fact that it fosters idiocy.
Tav on December 15, 2008 at 12:08 AM
You need a little more Friedman and a LOT less Keynes. I still haven’t seen a response on how you propose to stimulate demand.
Laura in Maryland on December 15, 2008 at 12:09 AM
thanks katy. I’m not so much the opposition though. I’m just trying to say that there’s more to this issue than assigning blame and no longer caring. The U.S. auto industry is huge and if GM and Chrysler go down it’s going to make an ugly recession even uglier.
starfleet_dude on December 15, 2008 at 12:11 AM
BTW not all the “foreign” automakers are in the South. Honda is in Ohio. And if there is a chicken and egg argument, the Germans and Japanese and Koreans located in the South because of the unions. Right-to-work was there long before the Republicans. In fact it was The evil KKK democrats that set RTW in place. Right along with FDR promoting unions c. 1935.
Flying my Stars-and-Bars
Caststeel on December 15, 2008 at 12:12 AM
As Keynes himself put it, if nothing else the government could bury jars full of money and have people dig it up, since it would provide them with money to spend. Of course we can more easily issue stimulus checks and start up public works programs to get people not only working but getting paid money they would then spend that would stimulate demand for goods and services.
starfleet_dude on December 15, 2008 at 12:13 AM
Good Night, Katy. Before you turn in, could you please call down the basement to Starfleet, and tell him Momma says “go to bed”?
Thanks, hon.
Laura in Maryland on December 15, 2008 at 12:16 AM
Aw, you’re just making that up. What’s next, picking on Stalin? ;)
I think our friend stardude is way too young to remember communism, Carter, or really bad economic times.
Laura in Maryland on December 15, 2008 at 12:20 AM
The only thing that has kept Chrysler afloat is Dodge and Jeep, their cars suck. I drive a Dodge truck and love it, BTW. This bailout has nothing to do with the industry, they are capable of producing very good cars and trucks, it has everything to do with bailing out the UAW. I have no probleme helping the industry stay afloat, I have massive problems propping up a thug union like the UAW and that is what the bailout is about. The union over steered and is about to drive itself out of business in a spin out wreck it can’t control.
I agree with a previous comment that if we must have a car czar it should be Mitt Romney, he knows the business and has the experience and know how to turn it around. That is why I voted for him and have been a very ardent supporter.
goat on December 15, 2008 at 12:21 AM
starfleet_dude on December 15, 2008 at 12:06 AM
Eh, when the higher gas prices hit, people still bought cars, but they made a beeline for the Toyota and Honda dealers. They knew what Detroit and the bailout advocates apparently do not, that Japanese cars offer better value for the money. If you are going to spend $20k you should get an all-around reliable car and Detroit seems to have a big problem in that area.
Perhaps if they weren’t LOSING money on every car they built, they could update their engineering and design and produce an American version of the Accord or Camry.
Bishop on December 15, 2008 at 12:23 AM
Starfleet_dude
Nice to see opposition and understanding. Katy has some experience you don’t, yet. It will come, Grasshopper. Meanwhile conversation is learning. Hang in.
Most projections of doom and gloom are false; intended to reduce rationality. Back off a bit, “smoke it over” and apply Occam’s razor. The “truth” is always an illusion but the facts of the matter are seldom in real dispute.
Now flying: Betsy Ross
Caststeel on December 15, 2008 at 12:23 AM
The people crying “Hoovernomics” don’t even know what it is. All the things they want us to do were already done… by Hoover.
Gianni on December 15, 2008 at 12:24 AM
Laura, I did you the courtesy of answering your question being old enough to respect when someone asks one in good faith to respond. Unfortunately, you don’t really seem to be all that serious about the subject. I wish you were.
starfleet_dude on December 15, 2008 at 12:25 AM
What Hoover did in 1930 was take the advice of his Treasury Secretary, Mellon, to let businesses fail and not do anything to staunch rising unemployment and runs on banks. It didn’t work. Later, Hoover realized his mistake and started to act proactively, but by then it was too late to halt the onset of the Great Depression.
starfleet_dude on December 15, 2008 at 12:29 AM
If I missed your response, I apologize. Could you please repost it. How do you see being able to increase demand for GM’s products?
Laura in Maryland on December 15, 2008 at 12:31 AM
I’d argue that while Japanese cars are better, they’re not nearly as better as they used to be. In the 1980s U.S. cars were markedly inferior in quality to Japanese makes, but by the mid-1990s that gap had closed to the point where U.S. autos were a fair value. What I think has hit Detroit hard is the fact that the SUV/light truck market that was so lucrative for them has collapsed thanks to $4.00/gallon gas, just as the housing bubble has also gutted spending as more and more U.S. consumers are struggling with greater indebtedness.
I’d like to think that something can be worked out with GM and Chrysler, but I’m not going to claim that it would be a sure thing. I’m just weighing the alternatives between help that might not pan out and an increase in unemployment that will certainly make things worse.
starfleet_dude on December 15, 2008 at 12:35 AM
Rewarding Failure
For a full week, GOP lawmakers bore the brunt of the bitter battle waged over an aid package for GM and Chrysler. Though the idea is wildly unpopular among voters, some Washington politicians were desperate to pass it — particularly the Democrats, who are beholden to the Auto Workers and other unions for tens of millions in campaign donations.
In addition to major restructuring by the automakers, GOP senators insisted on givebacks by the United Auto Workers. The UAW responded with a resolute “No.” But the bailout foes won, killing the $15 billion in aid.
And they were right to do so.
Gold-plated union contracts are a big reason for U.S. automakers’ woes (though managerial incompetence at the Big Three also played a role). The average Big Three worker made $73.26 an hour in 2006; the average worker at a foreign transplant, $44.20. Bailout foes wanted the gap to be shrunk by the end of next year.
A chart making the rounds on the Internet tells it all: Last year, Toyota made 9.37 million vehicles. GM, virtually the same number. Yet, Toyota made a profit of $38.7 billion on its global operations, or $1,874 per car, while GM lost $38.7 billion, or $4,055 a car, almost entirely due to its operations in the U.S.
Even so, the UAW vowed to make no big changes unto 2011, when their current deal expires. That basically would lock in the Big Three’s lack of competitiveness for at least three more years, requiring billions and billions more in bailouts or bankruptcy.
Immediately after the bill failed Thursday night, Senate Majority Leader Harry Reid said he “dreads” seeing what the stock market would do on Friday. “It’s not going to be a pleasant sight,” he warned. For the record, the NASDAQ rose 2.2%, while the S&P 500 increased 0.7%. He needn’t have worried.
As for the UAW, they rolled the dice, betting they could lose in the Senate and still get bailed out. It looks like their gamble paid off.
- Investor’s Business Daily
MB4 on December 15, 2008 at 12:35 AM
Isn’t it obvious, Laura. All liberals will buy American cars, going forward.
Entelechy on December 15, 2008 at 12:35 AM
The jars full of money have to come from somewhere, either printing extra money or taxes. Too much taxation, and we see productivity decline. To much printing, and we become a banana republic whose currency is more valuable as Charmin. Where is this money to come from?
Laura in Maryland on December 15, 2008 at 12:37 AM
For every $1000 that someone pays for a GM vehicle one gets a lotto ticket to be Senator from Illinois. It is The One’s old seat after all. Liberals should be out in force at the opportunity.
MB4 on December 15, 2008 at 12:39 AM
Thanks. Because I really do have to go to bed, I’ll just say that GM is faced with having to decide how much to downsize. They’re already looking at eliminating Pontiac and also focusing on higher-mileage cars, perhaps including plugin hybrids. I’d like to keep the U.S. up to speed on such technology, rather than cede it all to the Japanese and Europeans because I don’t want to see the U.S. become more of a service economy than it already is.
starfleet_dude on December 15, 2008 at 12:40 AM
and all conservatives will buy American cars, OR ELSE!
I wanna see Bawney, Reid, Piglosi, and Dodd all crammed into a Chevy Cobalt on I495 at rush hour.
Laura in Maryland on December 15, 2008 at 12:42 AM
O.K., just one more. The answer is we borrow it now and pay it back later when we’re out of the recession we’re currently in. That will involve raising taxes, at least back to the rates that were in effect during the Clinton administration. That isn’t the productivity killer some claim, and it’s certainly less than the top rates were back in the 1950s. But income has grown most at the top end and as Dillinger said when he was asked why he robbed banks, his reply was “that’s where the money is”. Really. Wage income has largely been static over the past eight years while investment income as a share of national income has grown dramatically, so if you’re going to deal with paying off debt it’s going to be necessary to raise rates at the top.
starfleet_dude on December 15, 2008 at 12:45 AM
Have worked on all kinda cars since I was a kid. Poor boys have no choice. Brits, Krauts, Japs, all of ‘em. Earliest is an ’04 Baker. Don’t personally go that far just bragging.
Ol’ man Honda taught the whole world how to build cars c. 1970. Superior engineering works every time. And the engineering extends even into the maintenance. Toyota listened and “raised”. Build more of ‘em. Other Japs kinda heard. American cars took a hit, compromised and recovered. Brits died slowly. Germans just made expensive; not good, just expensive. Nobody else much mattered. Politicians put in quotas and the furreners just brought in more expensive cars; for a little while. Takes some time to build a car plant but they did it.
Down to the present. Democrats took thirty years to produce a financial problem of epic proportions. Small problem: it was born out of control. Frankenstein vs. the Dr. is not a win for the Dr. US cars were compromised for many reasons. They took a hit in a weakened condition. BMW, MB, Toyota, Honda built on rock, sound business. Envy is not a basis for decision making. Go Chapt. 11
Flying Stars and Stripes 1846
Caststeel on December 15, 2008 at 12:46 AM
Lol, and I left out the most obvious, what does Starfleet dude drive?
Laura in Maryland on December 15, 2008 at 12:46 AM
I see him standing in the rain
Raindrops falling on him
He doesn’t even seem to care
He stands there and smiles as if just at me
And I know
(I know, I know, I know, I know)
He will make me rich and happy
(rich, rich, happy, happy).
Money in his hair
Money everywhere
I love the Money Man
Oh, I don´t know just why
His Hope and Change simply catches my eye
I love the Money Man
He seems so sweet and kind
He sweeps into my mind
I know I have to say bravo
(bravo, bravo)
He smiles over at me
It’s as if he takes me by the hand
And we walk
Through the dark as if alone
And I know
(I know, I know, I know, I know)
He will make me rich and happy
(rich, rich, happy, happy).
Money in his hair
Money everywhere
MB4 on December 15, 2008 at 12:47 AM
We cannot afford more debt, and certainly not for a failing proposition. Also, why not Chapter 11?
Laura in Maryland on December 15, 2008 at 12:49 AM
When you’re right, you’re right. When do you break out the Jolly Roger?
Laura in Maryland on December 15, 2008 at 12:52 AM
A Moonbeam, of course.
Cheshire Cat on December 15, 2008 at 12:54 AM
Jolly Roger Jan. 20 with drinks pennant below.
Caststeel on December 15, 2008 at 12:55 AM
I still don’t see what the problem is. Let them all go under, force the UAW to have to work for market wages, and let the chips fall where they may. All these people who are worried that this could be the end of civilization obviously just didn’t stock up on enough canned goods, seeds, guns, ammo, and reloading supplies.
BadMojo on December 15, 2008 at 12:55 AM
Large car companies have bit the dust before.
This person no doubt deserves their due but if history holdsm when a competitor goes out the remaining firms benefit.
I can’t help but think, were it not for Dem-union collusion politics the American auto industry would already have their marching orders and the draconian unions would get their draconian just deserts.
Speakup on December 15, 2008 at 12:56 AM
BadMojo on December 15, 2008 at 12:55 AM
Jolly Roger Jan. 20 with drinks pennant below.
Caststeel on December 15, 2008 at 12:55 AM
Amazing how easy it is to be rational. Thanks Mojo and so many others for reminding me.
Stars and Stripes C. 1945
Caststeel on December 15, 2008 at 1:02 AM
I am willing to give you the benefit of the doubt that you think your arguments are sensible, but you are trying to draw analogies (direct comparisons, actually) between wholly disimilar environments and seem to be of the mind that all that is needed is for someone to start spending and the economy will just kick back into high gear.
You have mentioned nothing about the disintegration of illusory wealth, the need for competition, the growth of brittle companies that live off of very specific economic conditions and crumble under all others (which is what Keynesian policy fosters), open economies where money spent can disappear into the current account deficit as easily as being plowed back into domestic production/services, … Central planning, also, tends to ignore all of these problems, since no central planner could ever handle these issues in any sort of an efficient way. Central planning is fine for static societies where growth is not an issue – but that is not us. We are a growth-oriented nation. Only capitalism, the trial and error of it, provides the environment for the development and growth of rigorous business models, and a strong business sector that is able to withstand downturns without everyone going bankrupt at once. The further we move away from capitalism, the weaker our businesses become and the more susceptible they are to minor economic changes.
And then we have the bothersome issues of our Constitutional Republic and the zero value that you seem to place on preserving that, even though it is what made our country the greatest, freest, most productive, most creative nation in the history of the planet. But you would throw that away to avoid short-term pain.
And then there were all those monetary issues that I have raised, but you chose to ignore, for whatever reason. As I said, our system is dependent on confidence in our institutions and that is not endless – no matter how much many would like to think.
P.S. Your buried jars of money was a beautiful example of the silliness of Keynesian theory.
progressoverpeace on December 15, 2008 at 1:02 AM
ROFLMAO!
Laura in Maryland on December 15, 2008 at 1:04 AM
Wow, I’ve never been accused of being rational before…
BadMojo on December 15, 2008 at 1:11 AM
progressoverpeace on December 15, 2008 at 1:02 AM
You’re right. Our Constitutional Republic is the prize the fascists HOPE to CHANGE. Finance is just one segment of this war. Keep the Republic sound and it will recover. It has survived attack before to again show the world that American exceptionalism succeeds where all others fail.
Islam has also attacked “the world” before and failed. Energy has no real record but didn’t OPEC originate c. 1972? And wasn’t crude at $147 in July?
A weak president? We have had our share before. History shows how to deal with them tho’ it is never easy.
We have a lot going for us. Common sense and perseverance to our Christian foundations (which, BTW, are common with most every other religion) will, once again see us through.
Trials will strengthen us. Without them we get lazy and weak. “So many opportunities.”
Flying Ft. McHenry c. 1776 replica
Caststeel on December 15, 2008 at 1:32 AM
Bedtime.
Taps
Caststeel on December 15, 2008 at 1:34 AM
Let’s see, what do Japan, Germany and the South have in common. They all feared the industrial strength of the United States. What else? Oh, that’s right. They all declared war on the United States.
So now the Japanese, Germans and Confederacy have joined together to destroy the arsenal of democracy.
The South remains an agrarian culture with little regard for industry or merchants. Their textile mills couldn’t compete globally and neither could their furniture makers. The have to import industry, like the Japanese, or California’s defense plants.
rokemronnie on December 15, 2008 at 2:20 AM
Not this big. Packard and Studebaker were never the size of the Big 3, that’s how they got called the Big 3.
Not if the competitors cannot supply demand because their own supply chain is disrupted. That’s what a “cascade of bankruptcies” means. GM goes down and takes a bunch of critical suppliers with them. That means Ford and Toyota can’t build cars because they can’t get parts. Auto parts are not 2x4s, you can’t just get them delivered tomorrow. When Plastek went belly up, Johnson Controls stepped in to arrange a new operation with the tooling so they wouldn’t have to stop their own operations. Furthermore, while it’s true that under normal circumstances the remaining companies would raise their prices due to reduced supply, if GM is liquidated, there’s at least a 4 month supply of cars in the pipeline at GM and their dealers. Those cars will be blown out at distressed merchandise prices. The kind of prices you need to have to overcome the resistance of no warranty. As Is. That will make it almost impossible for Toyota and Honda etc to sell many cars, certainly none at a profit, for 4-6 months at least.
Toyota dearly wants GM to survive and they’ve said so.
rokemronnie on December 15, 2008 at 2:30 AM
starfleet_dude on December 15, 2008 at 12:13 AM
Just where do we get the money to do this? I’m just about tapped out as I suppose others are. Going to raise taxes on the Evil Rich? Well thats trickle down, and I don’t need any more trickle down. Let them fail, either way the economy will take a hit. If they can’t pull it out in bankrupcy, someone will buy up the plants and start over. Maybe, just maybe, we can get government out of this with all their standards for vehicle and make a fresh start. Maybe, just maybe, the new owners will tell the unions to shove it. Green cars won’t cut it, the tech isn’t far enough along yet, and won’t be for some time. The chosen one and his crew are just going to screw the whole mess up…
N4646W on December 15, 2008 at 3:29 AM
Just chucking a generalisation out there, but.. How far would $100 billion go to cover 2-3 million extra people on welfare?
Although admittedly putting a car company on welfare doesn’t seem too appealing either, but..
Reaps on December 15, 2008 at 4:22 AM
You need to get out of the 1800′s friend. If you knew anything about the south you would know that most of that industry that closed down in places like Ohio and Michigan actually moved to places like San Antonio, Houston, Mobile and other industry friendly places in right to work states. The agrarian culture with little regard for industry or merchants exists in the north.
conservnut on December 15, 2008 at 7:06 AM
And this is exactly the problem with Keynes. Where do you think this money will come from? Do you believe there is a big ol’ money tree out behind the White House, and they just need to get picking faster?
DrMagnolias on December 15, 2008 at 7:11 AM
What the hell does the first quote mean by “the Obama generation”? People in their 40′s “barely remember” the days when GM was stable? Really?
Lehosh on December 15, 2008 at 7:33 AM
+1
I don’t know how rokemronnie made it all the way here from Gone With the Wind, but in case he hadn’t noticed all those car companies that are actually making money seem to have big non-union plants in… Dixie.
Lehosh on December 15, 2008 at 7:37 AM
During the initial Federal banking scandal bail-out as the POTUS campaign was concluding, many of us wondered why Romney wasn’t speaking out loud enough to be heard.
At this latest Big 3 US AUTO industry request/demand for a Fed bail-out, ROMNEY’S RESPONSE WAS PROMINENTLY PRINTED FOR THE NATION TO REGARD. I appreciated that clear economic stand.
Nanny Uncle Sam is a twisted old fart who is best kept far from Czardom. Why would anyone trust Harry Reid or Nancy Pelosi to make a sound business decision? Their record is set: corrupt momentary politically expedient seizures for more personal power via Socialist tyranny. Obama will become dictator with lapdog McCain paving the way sabotaging conservative bulwarks.
The Grand Old Party of Conservative Ideals needs to boot McCain, having already provided him every opportunity only to find him far short of the mark and drilling holes in essential bulwarks instead of combating enemy forces. Saboteur.
maverick muse on December 15, 2008 at 7:38 AM
rokemronnie @ 2 a.m. sounds sleep deprived, as though a Northerner bigoted against the South.
As per agrarian Americana, it became the new corporate industrial producer 50 years ago.
When Unions over-reach their own purpose to become the new Robber Barons, they have lost the virtue upon which they were founded.
The factories are built, and Northern industrial complexes yet exist. Drop the Unions. It’s a brutal global industrial complex. Whatever initial worker rights that unions forced upon industry have become legislated laws long established now. It is the right of businesses to hire whom they deem best, and if unions can’t trim benefit packages into what industry can provide in the black, there’s the problem.
MEANWHILE, CLOSE THE BORDERS. We have plenty of American citizens looking for work who need not compete against immigrants, ESPECIALLY ILLEGAL ALIENS. That remains the pit against “right to work” state laborers.
Whereas Unions once were needed to protect laborers against abuse from industry, perhaps they can now convert to protect citizen laborers against the competitive alien workforce. It won’t happen since Socialism is a global cause, and union leaders are strict Socialists who coerce the subjugation of members through violence and promises of candy for all the obedient little boys and girls. Via Socialism, there is no place where Liberty presides over Constitutional Rule of Law for free enterprise to thrive.
I am not ridiculing union members unless they deny the faults within their own system. Empathy is extended from those American laborers who have lived without union “protection” or benefits to those laborers facing the hardships endured in right to work states.
There is no free lunch. There is no comfort to be found from Obama’s progressive/Socialist leadership, only more hardship and less success despite all efforts to produce outstanding American goods. For corporate America to coerce more Socialism via bail-outs is a crime against our nature and the seal of failure.
maverick muse on December 15, 2008 at 8:11 AM
In all this discussion about the bailout, has anyone been able to point to a section in the Constitution that authorizes to act in such a manner? This seems patently UNCONSTITUTIONAL.
dominigan on December 15, 2008 at 8:24 AM
What’s a constitution?
JeffinOrlando on December 15, 2008 at 8:52 AM
Fail a small basis and no one cares. Fail on a galactic scale and the government will save you.
The moral: it doesn’t pay to fail small.
Fail huge.
drjohn on December 15, 2008 at 9:06 AM
Everyone still seems stuck on pointing fingers of blame rather than seriously looking at the problems we’re facing here and doing something about them. President Bush at least to his credit is taking GM’s and Chrysler’s crisis seriously enough to not just ignore what’s going on, but sadly his own party seems set on repeating the same mistakes Herbert Hoover made when he took Mellon’s advice to let businesses fail back in 1930, rather than act to salvage the situation.
starfleet_dude on December 15, 2008 at 9:47 AM
Why do you seem set on repeating the Herbert Hoover line? How many more times can we expect to see it in this thread?
progressoverpeace on December 15, 2008 at 9:51 AM
When people stop making claims that are contrary to the facts of history about the Great Depression, I’ll not have to bother bringing up the mistakes Hoover made and how they compare to the present day talk I hear from the GOP, progressoverpeace.
starfleet_dude on December 15, 2008 at 10:03 AM
I wish everyone in America would read the James Manzil article and really try to understand what he’s saying. It’s not that hard to understand for the economic layman. Sadly, the article won’t float around outside its assigned “conservative” circle. And if other people do read it, they’ll feel they can ignore. They know it’s not compassionate since it’s in the National Review.
I’m trying an experiment of bypassing the ideological filters and sent the article to a friend who is an ex-Marxist and thinks Bill Ayers is a great guy. I cut and pasted the article into an email with James Manzil’s listed as author, but omitted the detail it’s from the National Review. I bet she’ll agree with it.
thuja on December 15, 2008 at 10:20 AM
Good morning Stardude:
I am going to go a little easy on you assuming you’ve been busy studying for finals. Your teachers only present the “facts” that support their agenda and world view. Every great hero needs a villain, so the left necessarily has created one in Hoover to make FDR appear the great hero for “ending” the depression. World War II helped end the depression, but it took until the 50′s for the effects to work their way throughout the country.
Economic policy can take years or decades to catch up. That is why there are short and long term indicators and measurements.
I can tell you study hard and have the best interest of our country at heart. Don’t trust your teachers. They are part of the establishment and therefore part of the problem(liberal establisment, man). I’m glad your asking and debating, that is the best way to learn.
Laura in Maryland on December 15, 2008 at 10:28 AM
starfleet,
Don’t believe everything you see on TV. I saw that show this weekend and the great depression is not as cut and dried as they made it seem. It’s always the evil businessmen who are out to line their own pockets, right!
No!
The unions have gone too far. The rank and file will not turn down benefits but they are willing to compromise. This is the union bosses in concert with democrats that will ruin us all.
Vince on December 15, 2008 at 10:54 AM
Read some history of the Great Depression Laura, and you’ll find that Hoover’s inaction did help to bring it on. Sure, the stock market crash of 1929 was a terrible event, but it was the deflation after that which cratered the economy from 1930 to 1933. Hoover himself did finally realize that the advice from those such as Mellon wasn’t helping and was only putting more Americans out of work and closing banks, but he never was really willing to do what needed to be done to stimulate the economy.
starfleet_dude on December 15, 2008 at 10:59 AM
“Hoover’s inaction” would have been appropriate, letting the country go through the painful process of reorganizing after the distortions of the boom. But that process was made even more painful than necessary by deflationary monetary policy, so Hoover was pressured into government spending, which further distorted the economy and prevented it from recovering. FDR not only continued this distortion, but doubled down on it. It wasn’t until FDR died, and the end of WWII allowed the economy to overrun the government programs in place that prosperity returned.
Look, if we don’t feel the pain at some point, the economy just continues to pile up dead wood. It is pretty likely that the failure of one of the big three will greatly help the other two, but, most of all, the unionization of the auto industry is not sustainable.
Count to 10 on December 15, 2008 at 11:23 AM
Count to 10, it wasn’t the government spending that was causing massive unemployment and bank failures from 1930 to 1933, it was deflation. You’re argument is contradicting itself by claiming that FDR’s New Deal spending hurt the economy while even more spending to pay for WWII helped it. The resolution to this contradiction is to realize that first, the New Deal did ease unemployment from 1933 to 1936, but in 1937 Roosevelt mistakenly decided that debt reduction was more important and the U.S. economy declined as a result. It took the massive Keynesian stimulus of WWII to finally put enough money in worker’s hands to boost the economy, which did boom after WWII.
starfleet_dude on December 15, 2008 at 11:31 AM
This is what I call the moral argument for bankruptcy, as it’s not an economic argument at all. It’s fundamentally misguided because it’s taking money out of people’s hands by unemploying them, and the result will be a further deepening of the recession we’re already in. The problem isn’t that there’s dead wood, it’s that we’re piling it up in the form of more unemployed people who could otherwise be doing something useful. Thanks to the collapse of the financial sector due to massive leveraging on a scale not seen since 1929, banks and businesses don’t have the money to spend thanks to having to sort out massive debts. So if we’re going to revive the economy now, the government will have to act to stimulate it.
starfleet_dude on December 15, 2008 at 11:36 AM
More dissimulation. Those car companies aren’t making money anymore. Toyota is now losing money. The business model of Toyota and the other Japanese companies is to sell a lot of cars, worldwide, with small profit margins. Take away 30-40% of most of their worldwide markets, as has happened, and their profits go away. All the Southern transplants have cut way back on production. While there are structural cost issues with the Big 3′s union contracts, other car companies make mistakes too. The plants in big Dick, Shelby’s Alabama make SUVs, which weren’t selling well this summer when gas was $4 and now that nobody can get credit the sales projections are not on an upward vector. That crooked mouth hypocrite Shelby’s pet Mercedes plant has cut production 40%, has offered all its employees buyouts, and will close down for half of January and another full month later next year. That Mercedes plant, btw, has the company’s worst quality. Toyota’s had to pay about a billion dollars in consumer claims due to engine sludge, and many of those engines were made in Toy’s Alabama engine plant. A dirty little secret of the Southern transplants is that their quality is way below that of transplant operations in Indiana and Ohio – I guess some of that agrarian culture still survives in the South, unlike their own textile and furniture industries that faded in the face of foreign competition.
The South has been leaching off the industrial Midwest, Pacific coast and Northeast for more than a generation. The federal government has transferred over a trillion dollars out of those regions to the South. Taxpayers in Michigan paid for those Mercedes and Hyundai plants that big Dick, Shelby loves so much.
The difference between the North and the South is that when GM built the Saturn plants in Spring Hill, TN, the local residents, though the economy there had significant plant related growth, resented that the then laid off UAW workers were assigned by GM to work in the plant. The locals continue regard them as interlopers, foreigners, who took high paying jobs that locals think should have gone to Spring Hill residents, not Detroiters.
By comparison, we Michganders regard those Southerners, black and white, who came north for economic opportunity and work in the factories here, well, we don’t think of them as outsiders but rather as our neighbors.
rokemronnie on December 15, 2008 at 1:56 PM
Mea culpa if this is OT. I have not read the thread. But I was just on CNN and Pelosi was talking about Detroit and gov. funds in general. I started getting angrier and angrier and using the c word and b word and f word at the tv, wife was yelling down at me to to change the channel so I did and came here.
When she started talking about “everyone must come to the table” I just lost it. Apparently, the UAW could give a shit about coming to the table and I just lost It.
\
Willl now imbibe in something so I can sleep without murderous thoughts.
God bless the HOt Air crowd, whatever your beliefs, and let us all continue to believe in a USA in which freedom reigns.
riverrat10k on December 15, 2008 at 8:53 PM
Comment pages: « Previous 1 2