8,352 Forum Posts by "JMHX"
At 11/16/08 11:05 PM, Garthredbunlove wrote:At 11/16/08 10:08 PM, JMHX wrote:What makes you think bankruptcy will solve the problem?
What makes you think a bailout will solve the problem, when previous bailouts have proven ineffective?
Is what it is, brs.
At 11/16/08 06:54 PM, Al6200 wrote: This is what I think we should do:
1. Have the US government buy a majority stake in all of the failing US automakers.
If US Government control of its own agencies is any evidence, the auto makers will fail even faster.
2. Create a US Department of Industrial and Commercial Planning (we should do this whether or not we bail out GM), and have them appoint a group to oversee GM. The government should then either decide to eliminate the plants and companies that will never turn a profit, and pump money into the areas that have real potential.
Centrally planned economies have been proven failures for at least thirty years now. Just look at what the government managed to bungle when it was in charge of setting airline rates and routes: Expensive flight, limited options, and an overall burdensome experience for the consumer. Deregulation of the airline industry in the late 1970s resulted in a dramatic decline in airline ticket prices and a huge expansion in routes available. If anything, government tends to limit the ability of companies to quickly adapt.
3. Break up the United Auto Workers Union, so that each company has its own union. Unions are important because they give workers a say in how the company is run, but giving the union a monopoly on labor in an entire industry is incredibly destructive, because it means that there is no counterbalance to their power.
No disagreement on breaking up unions to reflect their decreasing share of power.
At 11/16/08 06:17 PM, Garthredbunlove wrote:At 11/16/08 12:55 AM, JMHX wrote:So explain to me again how not bailing them out is smart. It seems like we're damned if we do, and we're damned if we don't, but at least if we do there is a chance it will get paid back.
I would be happy to in two words: Chapter 11. Chapter 11 allows for GM to fix the problems that currently hold it down without involving government money and without involving the collapse of the company. Sure it will be painful - reform of a failed company always is - but it will certainly be a lot less painful than involving the Federal Government at a time when the Fed certainly doesn't have the money available.
Now if one of my ideas is followed - breaking down the Big 3 into the Medium 16 - the new companies would be able to absorb most of the employees affected by the fall of the Big 3.If you're so confident in your idea, why don't you offer to buy one of the 16? In fact, why hasn't this already been done?
The same question can be asked of Sovereign Wealth Funds: If they're obviously questionable, why hasn't anything been done to regulate them? The answer is simple: Sometimes the solution has to wait until the problem has fully matured itself, where the cost of leaving the problem unsolved is greater than solving it. Just because something isn't done at the immediate moment of efficacy doesn't mean it's not the best solution.
GM is the backbone of American industry? If that's the case, we're in deep trouble,The stock market IS down 40%.
Down 35% for the past year to date. But the DJIA is more than GM.
Regardless, what does this have to do with the fact that GM can be given loans?Not to mention, GM can be given loans. I don't see banks getting loans, they're getting bailouts. There is no logic to bailing out banks, while leaving GM to die, when GM creates far more jobs.
GM can be given loans, and I am glad you agree with me on this - private loans, from private companies. Not government grants of $50 billion. In fact, Chapter 11 protection will allow GM to do just this by soliciting capital from private companies as they retool their uncompetitive company.
If the current trend of bullshit and deserved slices across the face continues, I see no point in carrying on with this. Though rest assured that those who wished upon me great amounts of misery can now be content that, though perhaps not in the form they intended, their wishes have succeeded beyond measure.
At 11/16/08 12:44 AM, Garthredbunlove wrote:At 11/15/08 09:34 PM, JMHX wrote:
The lose of GM will be a lose of more than just GM. Side industries will also suffer. The entire area of Detroit will suffer. We're looking at a huge rise in unemployment. When something like that happens to this many people in one area generally causes some type of backlash. The government will likely be roped into helping these people and it very well could cost more (with no hope of ever seeing that money back), which is something you consistently ignore.
In case you've had your eyes closed for the past twenty years, Detroit has already been dealing with sky-high unemployment and the crime that comes with it. Detroit has already been doling out government handouts to a large proportion of their population precisely because companies like Ford continue to lose money, close factories, and cut jobs. Now if one of my ideas is followed - breaking down the Big 3 into the Medium 16 - the new companies would be able to absorb most of the employees affected by the fall of the Big 3.
The lose of GM is the lose of exports. It's true that we are now a service based economy, and I'll bet you can't find a economist in the whole world that will tell you that's a good thing. Service industries don't export, which is why we're still importing more than we're exporting. So long as that continues we will have added inflation to the dollar. GM is the back bone of American industry.
GM is the backbone of American industry? If that's the case, we're in deep trouble, what with it struggling to even achieve basic solvency. We have plenty of multi-billion-dollar companies in this country that produce and export goods the rest of the world wants, and these are companies that don't have to hobble hat-in-hand to the Federal Government for assistance keeping their doors open. Failure is an essential component of capitalism. Without it you get precisely what we have here: A company that has obviously failed unwilling to accept that its business model is outmoded, its payouts unsustainable, and its era passed.
Not to mention, GM can be given loans. I don't see banks getting loans, they're getting bailouts. There is no logic to bailing out banks, while leaving GM to die, when GM creates far more jobs.
Absolutely untrue. The Economist had an excellent lead in this week's edition on the subject. Bailing out the banks is essential precisely because their fall would topple everything else. In this system nothing can exist without access to credit - companies cannot get venture capital, homeowners cannot bet mortgages, borrowers cannot take out loans. The financial structure of this country is so interlinked with the world that the collapse of the American financial sector would lead to worldwide financial collapse.
GM, in contrast, has limited scope, and it is a scope that has been decreasing for years. They put it best by saying, "Banks qualify for help because the entire economy depends upon their services. They are vulnerable to sudden collapses in confidence that can spread to other banks that are perfectly solvent. A good car company does not face the same threat. And althought Detroit employs a network of suppliers, which would suffer if production shuts down, nothing would sap a recovery and job-creating enterprise like locking up badly used resources in poorly performing companies."
Sounds like someone's boyfriend left them.
At 11/15/08 08:23 PM, SkunkyFluffy wrote:
You know, with things now as they are, I don't know what harm could come from talking to me. I guess I can see it, though. I don't really know.
At 11/11/08 11:52 PM, smileagent wrote:
-The 2008 Sub-Prime Mortage Crisis: Banks practice predatory lending on their customers and give unqualified borrowers gigantic loans that they cant afford. CEO who caused the mess later get bailed out while the borrowers default on their loans and have to declare bankruptcy.
While no one is going to argue that this is indeed a crisis, I question blaming deregulation for it for several reasons.
1. Fannie Mae and Freddie Mac - Here are two government agencies (the most regulated in the United States) which still purchased bad mortgages, perhaps unwittingly, in securitized bundles. Even under the direct oversight of Congress and a slew of federal fact-checkers, Fannie Mae and Freddie Mac had to be bailed out to the tune of hundreds of billions of dollars.
2. Risk and the Markets - Keep in mind the majority of the problems in the market are due to a REGULATED asset - mortgages - and not, as many on the left have claimed, because of CDOs and CDS's. In fact, CDOs have been stable throughout the collapse, providing a much-needed back-channel of equity for corporations and banks that are starved of liquidity through other means.
3. The Impotence of the Fed - The Fed is the ultimate regulator: It sets interests rates, giving it de facto control of the money supply. Yet in this case its regulation has proven ineffective more than once, and in some cases has deepened the crisis by devaluing the dollar with wave after wave of interest rate cuts. The goal of these interest rate cuts - increasing liquidity for banks - has been ineffective: short-term loan rates for banks are still sky high, and the confidence the Fed hoped to create has not materialized.
If anything, the blame lies with simple human errors and manipulations in entirely regulated industries. Mortgages are regulated, yet they caused the great bulk of this financial panic. Even regulated companies suffered. The answer to the problem is not more regulation, but smarter regulation, and a restraint in keeping government hands off of CDOs and CDSs when, even in the best interest of reform, any regulation would choke off the final vein of liquidity available to stressed markets.
2500 pages and it all comes to this.
The bottom line is, a bail-out of GM is unnecessary, and I'll put some meat on the original ideas in hopes of answering some of the criticism.
1. GM needs a bailout to protect the economy - Not true. In fact, this is precisely why Chapter 11 Bankruptcy Protection was created. It allows companies protection from creditors while they sell off unprofitable or redundant sections of their business, build a new, profitable business plan, and trim whatever excess needs to be removed. GM asking for a bailout simply shows a lack of creativity and the belief endemic in the auto industry that Uncle Sam will foot the bill for a lack of original thought.
2. GM's failure would send a shockwave through the economy - Not nearly as much as we think. The United States of 2008 is not the United States of 1955. We are no longer dependent on an industrial economy, and haven't been for some time. The same doomsayers warned of a collapsing American economy when U.S. Steel, Bethlehem Steel, and a dozen smaller steel companies went under several decades ago. What did the U.S. economy do? It adapted. We are now a primarily service-based economy that produces high-value-added consumer items. This is why the GM case stands out: It's so odd. Losing GM would be more a loss of nostalgia than anything. This leads me into my next point:
3. WE WON'T HAVE A DOMESTIC AUTO INDUSTRY!!! - Wrong. Instead of spending $50 billion on a bailout of an unprofitable and lazy auto maker, why not let GM make money by selling off its underperforming assets? The Big 3 Auto makers control 16 car brands. Many of these overlap (Lincoln and Mercury, anyone?) It would be better for the market and for the companies to have these brands spun off into independent companies that would be small and nimble enough to pursue rapid changes in marketing and development while becoming more responsive to consumer sentiment. Sure, a few may fall, but the majority will adapt due to their name recognition and newly svelte payrolls.
4. We'll lose a lot of American jobs - Not that many. Union rolls have been shrinking year after year for most of this decade, and it's strange to most the outsize influence that unions hold even as they represent a decreasing percentage of people. Auto employees get better benefits than almost every other profession, and their unwillingness to compromise is a testament to putting self interest before company interest, even if doing this means neither company nor self end up any better. The announcement today that the unions would not compromise on pay or benefit cuts shows their intransigence on the matter. It's not making things any easier.
At 11/15/08 01:51 AM, Garthredbunlove wrote:
If you don't do the bail out, or help out, or do something, you take Detroit from a 2nd world nation, into a 3rd world nation. You get millions, yes millions, of people unemployed. The saying around here goes, "every job in the auto-industry supports 11 jobs outside."
And perhaps the best thing to do is sustain the blow we have been postponing for too long and allow the market to correct itself. Involving the government will surely result in a more cumbersome organization, and if previous government controlled organizations are any measure of their effectiveness, it'll cause even more problems down the road while suffering huge cost overruns. One need only look at the postal service, which recently posted a $2.8 billion loss, to see how government keeps organizations alive that would be much more cost effective and competitive under private control.
Somewhere between there and there is where I'm at right now. I think.
The doomsayers have long been prattling on that refusing a multi-billion dollar bailout to General Motors would send the American economy into a tailspin not seen since the Great Depression. This is likely true. I have resigned myself to that fact and so should you. Be under no illusions: Times will get tougher before they get better. But could this whole situation have been avoided? I believe so. Let me show you why.
Since at least the 1980s and possibly as early as the 1970s, the American automotive industry has been losing ground to foreign competition. The response of the American government, bending to ill-informed populist will, has been year after year of subsidy to the auto industry. Taxpayers prop up a GM health plan for union workers that the company cannot support on its own. Taxpayers prop up cars that cannot compete through tacit acceptance of tariffs that make better cars more expensive. Taxpayers prop up a company with a rusty and shaky business plan instead of demanding the company reform its business model, sell off troubled assets, consolidate, and post performance.
Taxpayers prop up a company that is no longer competitive because Americans are afraid of "what comes next." But America's industrial supremacy was built on the back of these companies! Populist politicians and Union leaders shout. This is true, but this is also the past. Keeping alive through artificial means when they can no longer compete is as pointless and costly as keeping a brain-dead relative alive for years when all hope of recovery is gone. But there is a key difference: We are paying for life support for GM when the hope of recovery is still alive and well.
Why do we do this? Nostalgia. No one wants to see our automotive industry shrink. Gosh, we made awesome cars with fins in the 50s, and everyone knows the song Pink Cadillac. Therein lies the problem: When is the last time an American auto-maker produced anything genre-defining? When is the last time a consumer was persuaded to purchase an American brand over a foreign competitor? Our nostalgia for preserving GM at all costs has led to a coddling of the company that has stifled innovation and competitiveness. After all, why compete when someone will cushion your failures? Why work hard when the bottom line will be there anyway, thanks to American taxpayers?
It now seems GM will be denied its bailout by Congressional Democrats, in a rare show of libertarian spine. This may well lead to a collapse. It did not have to be this way. Had government from the beginning denied bailouts that softened the competitiveness of GM, the company may well have adapted and remained successful - even if that means breaking away from the "old ways" and nostalgia for how things once were. Now, babied and bloated from government subsidy, any attempt to deny GM the drug of subsidy it has used for so long to sustain its addiction will result in the death of the patient. The fall could have been so much less painful had we adopted this policy from the start.
American taxpayers let GM dig its own grave through their unwillingness to elect politicians who do not believe in the permanent bailout philosophy. Now we stand to suffer for our nostalgia. The pain will be intense, but it is necessary to correct artificially strong markets. Whatever happens to GM, much harm will come to the American taxpayer. The only redeeming hope in this morass is that, from the wreckage, other automotive manufacturers - and future automotive manufacturers - will learn from the mistakes of GM and focus more effort on competition than on the reckless pursuit of endless subsidizing of failure.
Tomorrow we go to sleep in a vastly different world than we woke up in.
Where you linger like a haunting refrain.
As far as epic threads go, I built a good one.
As far as epic failing at relationships, I build great ones.
In Pashto, "Joe Biden" means "Bringer of Asskicking"
It helps that Joe Biden bench presses terrorists in the morning.
Gentlemen, apparently I'm getting my first (second?) professional publication with an article about the different dimensions of interest group politics on domestic and foreign policy. The American Political Science Association is picking it up for their Spring 2009 convention and Fall 2009 journal publication.
Given that the majority of my experience has been furiously flipping through the pages of magazines in search of publications by George Mason professors, living vicariously through the work of others in an attempt to convince myself that my degree wasn't a three-year waste of time and money and effort, this comes as some form of a relief.
At 8/24/08 01:28 PM, neogeo57 wrote:At 8/23/08 01:28 AM, JMHX wrote:Andalso, John mccain is more american then him. Refused to get out early in a war-camp when he had the chance. Adopted babies that mother Therisa told his wife to do.
John McCain wouldn't have had to stay in a torture cell had he been a good enough pilot not to get shot down, the kind of ace pilot Joe Biden probably would be.
At 8/23/08 11:48 PM, aviewaskewed wrote:At 8/23/08 11:43 PM, JMHX wrote: There are days when it's okay and days when it rattles around my fucking head and drives me up the GOD damned wall.Triple posting is so not cool. Talking to yourself shouldn't be seen in public :)
Serious issue.
There are days when it's okay and days when it rattles around my fucking head and drives me up the GOD damned wall.
GOD DAMNIT BOYLE GET OUT OF MY HEAD
Spellung and gramar
