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Reason 5,670 why the bailout was a big mistake
Posted by: McQ on Thursday, November 06, 2008

Because it set the precedent for ailing industries to come to the government, hat in hand, and beg money. Only large entities which just simply "can't be allowed to fail" need apply however:
House Speaker Nancy Pelosi said Wednesday that Congress is considering bailing out Detroit's Big Three automakers.

"We may need to make a statement of confidence in our auto industry," Pelosi told NPR this afternoon. "We're not saving those companies, we're saving an industry. We're saving an industrial technological and manufacturing base... It's about jobs in America."

Pelosi held a meeting Monday with Democratic leaders to consider a request from Detroit's Big Three automakers for another $25 billion in "bridge financing" to help them survive a huge downturn in auto industry.
And their incentive to modify, fix or eliminate the causes and reasons they're in the shape they're in?


The part in all of this unions play?

Probably quite a bit.

The demand that unions "sacrifice" as well?

Most likely nonexistent.

The fact that government regulations have most likely added significantly to their problem?

Quite high.

The chance government will reduce those regulations and the costs associated with them?

None. In fact, I'd expect them to increase them as one of the costs of accepting the loan.

The chance that they'll end up in the same situation again?

Quite high.

I assume the airline industry will be next.
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Previous Comments to this Post 

Heck, I’m going to need a new computer pretty soon and my new car payment has put a dent in my free-cash. I should start lobbying for my bailout package pretty soon.
Written By: Robb Allen
Nancy, you go girl! Let’s keep subsidizing the bad business practices that have bitten Detroit in the backside and fatally poisoned it.

I keep thinking that there has to be good brand equity left in some of the Big-3 labels that some outside investor would be interested in. Let-em go BK, chop-em and sell off the good parts. The junk yard...s’cuse me, automotive recycler is a perfect metaphor. I am sure Watto can cut a good deal but only for real money (no republic credit...).
Written By: CR
URL: http://
Geez, more good intentions, which will bring on more good intentions, which will bring on, well, no need to continue. There appears to be no way of stopping this mess.

Written By: autot
URL: http://
Ayn Rand, prophet.
Written By: Grimshaw
URL: http://
I think the auto industry disaster is much more due to management caving in to excessive union demands, and screwing their shareholders, then it is to government regulation.

It is analogous to politicians who give municipal unions all the pension benefits they ask for ( in lieu of big raises ) because the politicos will be long gone by the time the pension bill comes due.
Written By: Andy B.
URL: http://
The downturn in the auto industry is global and not unique to the US auto industry.
I think the auto industry disaster is much more due to management caving in to excessive union demands, and screwing their shareholders, then it is to government regulation.
Let’s see. If they make the workers start working minimum wage, they’ll probably strike. If they strike for any length of time (a handful of months), they will go out of business. They could fire the union workers, but that would be reversed by the government. So your statement is a non-sequitur.

Yes they are living a legacy of bowing to the union. In the past two things drove this. They didn’t want production to be shut down against the domestic competition for long as they were selling everything they could make. They also had the government running some soft protectionism for them as well as forcing them to deal with the union on their demands. The government, especially Carter, backed away from one but not the other.
Written By: jpm100
URL: http://
We’re gonna become new companies, few small companies, just the big boys left who can work the government and deal with massive regulation better.
Written By: Harun
URL: http://
We’re gonna become new companies, few small companies, just the big boys left who can work the government and deal with massive regulation better.
Like the oil industry.
Written By: jpm100
URL: http://
What kills me about the auto industry bailout is that the Big Three are demanding money to help them retool to build energy-efficient cars.


How did Toyota and Honda manage to make THEIR hybrids without Uncle Sugar footing the bill?

And if people really want the electric / hybrid cars that libs claim will be the answer to our energy problems, then why aren’t private investors, including rich libs who seem to have boatloads of cash to donate to dems (spit), rushing to invest in the Big Three? I mean, if Ford or GM is going to unveil a supercar in the next couple of years, shouldn’t we all be rushing to buy stock? Why don’t we?

Answer: not many investors have confidence that the Big Three can make a car that will work, or if it DOES work, it will cost so much that people won’t want to buy it AND it probably won’t last more than 50,000 miles. Stupid management, greedy unions, and idiot politicians have unwittingly conspired to make a perfect storm. Management couldn’t / wouldn’t see that the demand for durable, energy-efficient cars would eventually return; unions continued to demand ’60s and ’70s-style benefits in a 21st century economy; and politicians kept the resulting house of cards propped up.
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