The auto industry’s Christmas present from the government — in the form of a $1 billion loan to General Motors and a $5 billion stake in GMAC — may have left other industries hoping that the giving season isn’t over yet.
The steel industry is pressing President-elect Barack Obama to boost the flagging demand for U.S.-made steel by instituting a “buy American” clause in his infrastructure stimulus package, the New York Times reported.
“As steel production goes — and it is now in collapse — so will go the national economy,” writes the New York Times, referencing the maxim once applied to The Big Three automakers.
But why stop at manufacturing industries? Rep. Frank Nicastro of Connecticut and some of his fellow legislators want to save two local papers, The Bristol Press and The Herald, which are hanging by a thread after their publisher said it cannot afford to keep them.
Which companies are really too big to fail? If you were writing the check, who would you bail out?
(Pictured above: Workers secure a steel beam at a construction site on 8th Avenue and 42nd Street in New York, April 21, 2008. REUTERS/Shannon Stapleton)
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General Motors is heavely invested in manufacture and sale of cars in Russia, but they wouldn’t take any of our “bailout dollars” over to Russia to enhance that effort, now would they?
- Posted by ronWhat’s the bet in a year or 2 the Big 3 automakers who have now joined the ‘corporate dole queue’ are either begging for more help or racing each other to get the first affordable plug-in electric vehicles on the road.
- Posted by BradOut of these 3, 1 will fail, 1 will hang on to the past for as long as they can and eventually die of exhaustion, and the 3rd will embrace the future and new technology and go on to prosper. We should start a betting book on who the succesful auto maker will be. How about that?
Brad
Just to expand on what I touched on above. I do not think the Big Auto Makers have max’ed out the efficiencies of the internal combustion engine.
http://www.dailymail.co.uk/sciencetech/a rticle-1049151/The-sports-car-Venice-tan k.html
- Posted by B.FreeI remember the old way gov’t use to fix things (by old I mean hundreds of years ago and by remember I mean read in text books) and that was to lower taxes. Can you imagine how quick every economic problem would be fixed if we got rid of the income tax? But doing that would mean we’d have to get rid of a lot of government power, won’t ever happen.
Revolution will soon be necessary, just be sure to pick the right side.
- Posted by MichaelWithout a First Class Tax Paying Base , We Cannot Afford A First Class Infrastructure . Republicans never had a clue ! There thinking is all for me none for you ! Sad that a vote for republicans is a vote for your slavery ! We must change the regulation that legalized the speculation of revenue ! ( 1983 ) Deregulation of the Fed.
- Posted by Glenn CarpenterThis is going to start looking a lot like the line in the welfare office!
- Posted by HeatherIf we let half the country go bankrupt, the only answer is totalitarianism, or else people starve and we can’t get toilet seats for our bombers. Maybe everybody who’s good for it should get the government loan they need at a market rate, of printed money (we can do that because we’re in deflation). OK, so who’s good for it? Shall we let our esteemed politicians decide? I think it’s the righteous answer, I’m just not clear on how to make it work. Typical real-world problem. People and products are real. How do we realign our games with reality without losing the principles we love?
- Posted by Pete CannI actually see a glimmer of hope. You see, taxes and the act of collecting taxes are a huge friction on the economy. If this tax cut works, we could eliminate this antiquated process, and let the government raise monies via inflation instead. Think about every productive person in the country getting a week of extra, productive, time without doing tax returns.
I say let Pelosi and Obama spend like crazy now, because then they’ll get the blame for the additional inflation they cause in 6 years, when the government’s bonds have to be re-financed (just like a mortgage). I’m not Democrat or Republican. I’m in favor of the Constitution. What a concept.
Actually, each project that the government takes on needs to have an ROI analysis done by independent 3rd parties. If the project increases the velocity of money enough to have a net positive return, then do it.
- Posted by JeffMr. Pointer, whom or what you are, no one cares. This country, has been destroyed by highly educated fools. A chicken farmer with a little common sense could have done a much better job, for the past eight years. I do not have the handicap, that you have. Thank goodness I do have some common sense.
- Posted by NormanChief execs of these companies never asked advice of American people during outsourcing, off shoring, layoff American labor, lowering wages, establishing their golden parachutes and removing promised pensions and benefits to workers who spent life at their factory at the first place, and therefore they shouldn’t ask any taxpayer money to save face.
- Posted by nowayGood comments by all. Americans are not favoring bailouts and obviosuly are not convinced that the bailout for the financial sector was appropriate and scrutinized. I think we threw money (financed by the Chinese) to bad. The Dems sold everyone on home ownership they coulnd’t afford and the Christian extremist snuck into the GOB and messed up the wiring. We all voted and paid the consequences. We also have the world’s smallest trade department and no longer have anything worthwhile to export. The only thing left is to make sacrifices (relocate, change expectations, re-train, re-brand) and rebuild this country’s infrastructure. We can use that idle and worldclass steelmaking capacity between Indiana and the downriver area of Detroit for making Rail! We should be laying rail for mass transit and commerical transit across the whole country. Why? Rail increases the need for “smart fleet cars”…Rail increases domestic and international tourism…Rail reduces the need many vehicles during the work week….Rail enables idle civil engineering resources to revamp the nations infrastructure. We need to build our way out and evolve as we go through the process. When we are behind an initiative…we make history.
- Posted by CWThe bail out money should be inject back into the government - a better government with “Checks and Balances” system in order “to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity…”
- Posted by mythnrealityThe concentration should be on jobs. But also on job training. Here in Kentucky there have been many people who lost their jobs because of their link to the auto industry,tools,transportation,manufactur e. For some people they have been at their jobs for years,worked their way up from teenagers to now middled aged and it is not going to be easy to find another job because of their age. I would like to see the feds reach out to companies and instill job training programs with tax incentives to give people a chance to learn and earn their way in life. With more jobs,more revenue and less unemployment payouts.
- Posted by noraNo more mailouts,PERIOD. How about help for seniors who lost much of their savings because of this fiasco and the crooks at the top???? A new genertion of people who will live at or near poverty level has now been created. We will have to receive more government help to make it. Save any additional bail out money for that!!!
- Posted by clelaYay! Massive pork for the fat cats! Tell the public anything, they’ll believe it. What we desperately is a new private airport for all the private jets heading to DC to feast on the massive pork. Privatized profit, socialized loss. More warm yellow trickle-down for the little guy, yay!
- Posted by Pork LoinIf the gov’t is bailing out, meaning just giving money, to capitalist enterprises, that’s out. If bailout means loan - at rates the companies themselves charge us, the consumer - then that’s OK. For instance, however much GMAC would charge a customer who had iffy credit and was about to go broke, then that’s what GM has to pay. With repossession/liquidation as an option.
Some other conditions could/should be:
- Posted by RussBring the jobs “outsourced” to foreign countries back here.
Force the union into making it economically attractive to bring the jobs back to the US - probably meaning getting rid of the union.
Cease buying parts from other countries - when you advertise your product as being an “American Revolution” or whatever, it implies it is American-made. Make that so. Do these things step by step, not all at once, as it would be unreasonable for an “instant fix” = set targets and goals that must be agreed upon and adhered to. Variance from the agreement means give back the money - all of it - immediately.
Quit making junk. Why one wouldn’t do this anyway is beyond me, but if the car companies and anyone else wants the taxpayers cash, NO JUNK is a must.
No more “sell it cheap and make it up on service and repairs and phony-baloney financing tricks” as a business model. How about let’s try “make it really good, so it won’t need all the back end nonsense” for a change?
And, finally, make all the obscenely-paid executives compensation, and continued employment, almost entirely dependent on performance - just like everyone else. No more bonuses for leaders who drive the companies into bankruptcy. And fire the guys who thought up that idea in the first place - they need to be the first to go.
I’m sorry, I think we are getting way off base here. These “bailouts” are not about helping stupid rich people, but about saving all of us. Yeah, they are getting off “easy” too, but guys, are you willing to starve your families just to punish those who deserve it? Wouldn’t it make more sense to fix the problem first and THEN go after them? Seriouosly.
- Posted by Laz