November 18, 2008
PJB: As GM Goes, So Goes the GOP
By Patrick J. Buchanan
Understandably, Republicans are seething.
When Hank Paulson demanded $700 billion to haul away the trash in the dumpsters of JPMorgan Chase and Goldman Sachs — assuring us we could hold a garage sale of the junk — they rebelled. They acted as the nation, by 100 to one, demanded. They killed the Wall Street bailout.
The Dow quickly sank another 1,000 points, and, charged with criminal irresponsibility by the elites, the GOP buckled, reversed itself, rescued the bailout — and was wiped out on Nov. 4.
Now we hear from Paulson that the $700 billion Congress voted will not, after all, be used to buy up all that rotten paper on the books of the big banks. Some banks are using the cash to buy other banks.
So Republicans are right to be enraged. They are victims of the biggest bait-and-switch in political history. But they are now about to do something terminally stupid. With GM, Ford and Chrysler teetering on the brink, they are turning a cold stone face to Detroit and are about to follow the counsel of that quintessential Bushite Dick Darman, who said of our computer chip industry, “If our guys can’t hack it, let ‘em go.”
America responded — by letting George H.W. Bush and Darman go.
Are Republicans aware of what they are about to do?
When workers, execs, engineers, dealers, salesmen and suppliers are all factored in, the Big Three employ 3 million people who contribute $21 billion a year to Social Security and Medicare, and $25 billion in federal income taxes. Add in all the businesses that depend on the auto industry, and we are talking about one-tenth of the U.S. labor force.
As columnist Tom Piatak of Chronicles and Takimag.com writes, 850,000 retirees, and their families, depend for pensions and health care on the Big Three. If they go under, the burden falls on us.
And to let the auto industry die is to write America out of much of the economic future of the planet.
In a good year, like 2005, Americans buy more than 17 million new cars, and West Europeans as many. Tens of millions in Eastern Europe, Russia, China, India and Southeast Asia are now moving into the middle class each year. These folks will all need or want one or two family cars. If we let the U.S. auto industry die, that immense and burgeoning market will be lost forever to America, and ceded to Asia.
“Who cares?” comes the free-traders’ reply. Japanese and Koreans are setting up factories here. They can pick up the slack.
But that means Americans will work for and depend on foreign companies for a necessity of our national life as vital as the imported oil and gas on which our cars and trucks operate. All the profits of the mighty automobile industry in America will be sent abroad.
Before Republicans follow this free-trade fanaticism to their final interment, they might study the results of a poll by Peter Hart:
– Seventy-eight percent of Americans believe the U.S. auto industry is highly or extremely important. Three percent think we can do without it.
– Ninety percent of Americans believe the death of the U.S. auto industry would do great damage to our economic future.
– By 55 percent to 30 percent, Americans favor federal loans to save it. And by 64 percent to 25 percent Americans back President-elect Obama’s resolve not to let the U.S. auto industry go under.
If the GOP blocks these loans, and the industry dies, the party can forget about Ohio, Michigan and the industrial Midwest. For the Reagan Democrats will never come home again. Nor should they.
By the choices we make, we define ourselves and reveal what we truly care about. Thus, consider:
We bail out the New York and D.C. governments of Abe Beame and Marion Barry. We bail out a corrupt Mexico. We bail out public schools that have failed us for 40 years.
We bail out with International Monetary Fund and World Bank loans and foreign aid worthless Third World regimes.
We bail out Wall Street plutocrats and big banks.
But the most magnificent industry, the auto industry that was the pride of America and envy of the world, we surrender to predator-traders from Asia and Europe, lest we violate the tenets of some 19th-century ideological scribblers that the old Republicans considered the apogee of British stupidity.
Nancy Pelosi is talking about tying loans to a restructuring of the industry. But Congress is not competent to do that.
What needs to be restructured is the U.S. tax-and-trade regime.
Dump globalism. Instruct Japan, Canada, Korea, Germany and China that if they wish to sell cars here, they will assemble them here and produce the parts here. And we shall have the same free access to and same share of their auto market as they have of ours.
To accomplish this, use the same import quotas and tariffs Ronald Reagan used to save the steel industry and Harley-Davidson.
Reciprocal trade. Even Democrats like FDR used to practice it.
Tags: Bailouts, Barack Obama, Economy, Globalism, Trade
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If GM files Bankruptcy, GM as we now know it will die, but a new more efficient and more importantly slimmer GM will be born. I do not care what Jeffry Sachs says, the world (and definitely not the US) will live on if GM and Chrysler die. Ford will be fine until the original 25 Billion reaches Detroit and the Flagship brands of Chevrolet, Cadillac and Jeep (probably others too) will survive and be better off in the long run if GM and Chrysler can restructure now, but I guess recent history shows us that anyone can send out their minions to cry, whine, complain and warn of apocalypse and get billions of dollars for it. Isn’t change great. Oh yeah, guess where Mr. Sachs was born and raised?
You’re right, Pat. We can’t just let something as big as the auto industry collapse, especially now. However, that industry has many problems that managers don’t seem likely to be willing or able to solve, so why not try to do it in conjunction with a bailout? Your saying that Congress is not competent to do it is not convincing.
On a related note, although I voted for McCain largely because I feel that Democrats tried to politicize our war effort in order to ensure a Democratic victory (first in 2004, and then again in 2008), I also don’t want to see Republicans politicize our economic recovery effort for the same reason. It would be un-American for Republicans to drag their heels on every economic innovation that the Obama team tries to push through, including the restructuring of the auto industry. Your point about the need for some protection, at least for the short term, is also valid. We can’t let the car companies fail.
Yes, the US auto industry needs to be ’saved’. But, the reason this industry is in trouble is because its administrative caste did not see the writing of the future on the wall, and if more money is thrown at the same managers building the same cars and trucks the future doesn’t want in the US or elsewhere, if they can’t compete globally in the new energy efficient reality, then giving the same ‘dinos’ more billions will accomplish little to ’save’ (spend on) this badly run industry.
Bail out , yes, but only after a change of management and direction. They’ve had the warnings for years, and yet remained incapable of hearing.
Republicans Drink the Cool Aid:
As Rahm Emmanuel arranges to inaugurate Billary Clinton as Secretary of State in the administration of his Big-eared Puppet, Republicans are lining up to drink more of the Clinton Administration’s disastrous NAFTA & China-WTO cool aid.
GM, Chrysler and Ford are going the way of Westinghouse, Bethlehem Steel and Enron. The putrid bodies of deluded Republicans will be left rotting under the Asian Sun.
In two years of constant campaigning Joe Lieberman’s hand-picked candidate, John McCain, never once mentioned his vaccuous role as Chairman of the Senate Commerce Committee. Under his reign the Clinton Administration opened America’s markets to a tsunami of subsidized exports from the world’s largest single party, Marxist-Leninist-Maoist state.
What epitaphs can be written for the deluded followers of Jimmy Jones who were left rotting in the South American jungle in the 1970s?
That same epitaph that will be be written for the deluded followers of the NEOCON lead Republican Party of Bush-McCain and Lieberman.
REFERENCE:
Dump globalism. Instruct Japan, Canada, Korea, Germany and Chinathat if they wish to sell cars here, they will assemble them hereand produce the parts here. And we shall have the same free access to and same share of their auto market as they have of ours.
It looks like free trade is going to be allowed to rip.
So cheap labour from “Overseas” will be the order of the day.
And the workers at “Home” can go to hell.
They need reorganize and restructure. Their cost of producing a vehicle is much higher due to retirement benefits and other union demands.
What we are not hearing is just how far indebt we really are due to our politicians spending our children and grandchildren’s wages for generations to come. Here is what the President of the Dallas Federal Reserve, Richard W. Fisher said in a speech this past May. Our federal debt is almost $100 trillion dollars once you total up all of the promises made by politicians who promise to bring home the bacon to buy their votes. You can read his whole speech at the Dallas Federal Reserve web site.
Go to I.O.U.S.A. and watch a short video on just how bad our federal debt is right now, how can we possibly afford anything? Go to Pete G. Peterson Foundation, the owner of the I.O.U.S.A. full feature film. Go to Eagle Forum and join one of the leading conservative organization that will help from keeping America from going bankrupt. All it takes is to have our AAA bond rating dropped to a AA rating and we will then be required to spend more tax dollars to just pay the interest on our loans. Look up two bills, S. 2063 and S. 15.
Pat, Thanks for this fantastic column. Instead of a $25 billion bailout the Feds should be paying $1 trillion in raparations for their abuse of the auto industry since WW-II:
1) Federal labor law that allows the UAW to pick off one company at a time and force that company to its knees with outrageous union demands, instead of letting the Big 3 lock all workers out until a fair settlement is reached. This has given us ‘30 and out’, nearly full pay while laid off, and outrageous health-care benefits, all of which are contributing to the current huge cash burn.
2) Letting the Japanese, Koreans, and soon the Chinese steal our markets with their cheaper labor.
3) Letting commodity speculators drive oil to $147/bbl and kill the demand for the only vehicles on which the Big 3 made money, and
4) Letting Wall Street’s greedy investment banks kill the credit markets and stock prices so that everyone feels too poor to buy a car, and can’t get a loan if they want one. With no money coming in, the Big 3 are hemorrhaging money to their retirees and laid-off workers.
Without the devastation from (3) and (4) the Big 3 would be doing fairly well.
How odd that we can bail out the crooks on Wall Street and keep paying their bonuses with taxpayer money, but not help the hardworking engineers and production workers that make the cars and trucks we all need and love!
50 Billion$ sounds good for the auto industry out of the 700 Billion bail out fund. The industry must be saved!!
And PJB, my liege, is right, the NEO Republicans are going to become extinct if they dont back a good plan for this 50 Billion$.
But the ‘big three’ have to streamline their exec staff (especially GM) and build more relevant cars.
I have always bought American cars;
Chevy, Dodge, Pontiac, back to Chevy, Oldsmobile & Saturn…so don’t blame me for this mess.
The Big 3 cannot be allowed to fail. These companies are as sacred to the U.S. history of invention and productivity as “Grandma and Apple Pie is to the meaning of intrinsic value to the American people, heritage and ideology.
Granted GM, Ford and Chrysler had not kept up with the times only as far as some of the styling (outdated) of their automobiles. For years we saw GM and Ford reluctant to change their designs only offering a different grill or headlight for a model change. This was a turnoff to a lot of Americans (including myself). The mechanics have improved considerably over the years to make them just as competitive with the foreign companies.
Millions of people will lose jobs as Pat accurately states. My own husband was a parts manager for a small GM dealership for over 23 years. He can attest to the solid and reliable vehicles GM has put forth since the mid 1980’s. He now works for a large Ford dealer (inventory) which is owned by an automotive group. To date, he reports he now only has four paid holidays per year, paid 3 day sick leave taken away and many office people have been cut back to 32 hours per week or eliminated altogether under the credit and gas mileage concerns. He was also advised that if in six months the conditions of the auto group do not improve - 50% of the work force of all their dealerships will be on the unemployment lines.
There is no excuse for the huge pensions, health benefits, salaries, un-enlightened leadership and exorbitant Union intervention that has caused these companies to be pushed over the top into begging (along with banks unwilling to finance or lend) for a handout.
Under the right and more youthful leadership, the Big 3 can emerge as the future innovators.They should be given another chance (with needed and appropriate changes) to allow this country to again be the premier nation for the automotive industry and lead the world. If they fail, we all fail and a depression would be likely.
Why don’t we simply let the auto industry go? This is the only truly american industry left. The auto makers have been killed by government involvement and unions. The idea that the auto makers cannot make products which the american economy wants is insane. What ever happened to “Buy American and Americans work”.
This attitude that foreign car makers make a better product is not truly apples to apples. Remember affirmative action which forced Detroit to hire workers and unions protected those workers and gave them the “right” to sit on their ass and not be productive. When they became weak, “our” government passed NAFTA to drive home a few more nails. I am sick of the talk of a Global Economy. Who cares! Now the auto workers make an average of $78 per hour where Toyota workers make an average of $48 per hour. This gives Toyota a $1300 dollar per car advantage. Nevermind these “foreign” makers already had suppliers whose workers eat rice and live in third world conditions. It is not the fault of americans that there are barbaric countries in the world. Move to Johannesburg you silly intellectuals. This is proof of your ignorant ideas of a great society.
We have given them a hand-up and they are using it to distroy a way of life when someone could get a job, buy a home in a safe neighborhood, and have children who could do the same thing.
It is NOT the auto makers who have destroyed the auto industry. It is the loss of conservative workers being replaced 2 and sometimes 3 lazy affermative action workers who had every opportunity in the great city of Detroit. Used their automotive welfare checks to turn wonderful homes, business and gettos.
http://www.white-history.com/hwrdet.htm
If you build it they will come.
How much proof do you need?
edtheone, you are a total idiot! Although I agree with you opening statements, I have to disagree about an auto worker being lazy. Have you ever seen the line at GM, pumping out a car every 60 seconds! Picking up doors, seats, etc. How in God’s name could a lazy person work on an assemply line? You would be very happy having an auto worker making 23 cents an hour like the Asians? You make me sick. 78 dollars an hour? Where? show me. Healthcare, holidays, most were given back. The auto industry is destroyed by the American car buyer who will buy an aluminum can for cheap for their deal little spoiled brats so they can drive to highschool. Instead of buying American. Yeah, I know, a lot of GM cars are made in Mexico and Canada. Thank you, NAFTA, for f&*%up the US auto industry.
I have mixed feelings about bailing out the auto industry. American auto makers have largely produced cars that are not designed to last and have taken American consumers for granted. When I see corporate elites defending America by taking a sober view on legal and illegal immigration, and turning away from globalization, maybe I will feel differently. I’d hate to lose the industry, but who says that an auto industry that is better for America can’t be developed without a bailout?
As it is, American citizens and workers are viewed by our corporate, government and financial elites as replacable by anyone, anywhere. Loyalty goes both ways!
The root is not being addressed. The fruit of faulty free trade, economic policies, illegal immigrants, NAFTA, CAFTA, etc., which Mr. Buchanan and Ron Paul have been screaming about for years, has now come to fruition. Now, just like a liberal mother hearing about her little Mikey getting in trouble “again”, she blames it on the mean teachers and principal, and sues the school, has the teachers fired, and buys Mikey a brand new bike at the expense of the taxpayers from that school district. These auto manufacturers, their unions, and government politicians have corrupted the whole auto industry, spoiling its workers with unsustainable pension plans and medical benefits, unbalanced trade practices (where are the tariffs?), unfair taxation upon American products, unbelievably stupid environmental requirements, and the pressure for exportation of our factories in order to compete with other countries by hiring cheap laborers in third-world-countries.
Now, with all that said, from what Mr. Buchanan wrote, we have got to save this industry. The problem is: Same old will mean “the Same Old”. If it failed, won’t it fail again under the same policies and procedures? The main fear of mine is that liberals want to “fix” it their way. They will not eliminate the taxing and loosen the restrictive environmental requirements, nor will they add fair trade tariffs, or reward companies that bring back factories to the USA. They will place more requirements upon these auto manufacturers to add more “green-friendly” and “fuel-alternative” changes, which will once again bankrupt an already tired and raped industry. Raped? Yes! By our ignorant and greedy and corrupt political pimps.
If we lose our auto industries, we have no line of defense in case of a war. We highly depend upon our auto industry during times of war to produce our equipment. No industry manufacturers, no win. As Pat hasso rightly said in his books, interviews, and articles of the past, we cannot afford to lose this fight, or we will never again win a fight with another country in battle.
So, yes to financial help. Yes to the government to change the rules back to an even playing field of trade and manufacturing. Otherwise, …can you speak Chinese?
The tragedy of the “Reagan coalition” is that it allowed uber-libertarian “free market” absolutists into the fold, elevating them as “economic conservatives.” In fact, their atomistic hyper-individualism is the antithesis of true conservatism, given the latter’s foundation in a coherent social philosophy.
Ironically, Pat’s greatest contribution to the advancement of an authentic conservatism could be to help restrain capitalism from leading us down the primrose path to an inevitable date with socialist tyranny.
Just how can you save the auto industry, when there are no customers owing to lost jobs and a credit crunch?
And gas guzzling autos are now a no-no.
Who will be next to be “saved” ? are some more equal than others?
The Big Three’s problem, to be blunt, is North America. They should have pulled out long ago. And rather than give them billions of dollars, just get rid of these stupid CAFE standards and get rid of the government running the auto business.
As for the GOP … it’s as simple as going back to the basics … the party of Lincoln … the party of Reagan.
Jimmy Lewis
SCS, Michigan
Blog: http://rougerevival.blogspot.com/
As FDR said of Congress, “They may be bastards, but they are our bastards.”
The US auto industry is different from the banks in that they are producers of goods rather than the suppliers of non-value added services. They are a strategic entity that goes beyond simply making cars.
For all of our investment in the service economy, all we’ve gotten is a bunch of greedy bankers that don’t know how to balance a checkbook.
The auto industry, like many other industries, is a repository for engineering knowledge. It would be foolish, in terms of our National Security, to simply let the ill-conceived theory of non-intervention take it’s natural course.
I’d like to see a more targeted bailout. One that focuses only on what needs to be fixed rather than just this handover of sacks of money destined to disapear into the same hole of mismanagement that caused all of this.
That will require investigation and some hard questions to be answered - I’d talk to the lower level auto industry people rather than the disconnected CEO’s.
We also, need to refocus that bail out money on incubating American tech-based industry, especially manufacturing.
It should be obvious to Congress and the financial institutions that new, goods producing business growth will buffer and underpin economic fluctuations.
Our economy must rest on a solid base of domestic durable goods production. If we had more solid industries to fall back on, we wouldn’t have to be as worried about Detroit right now.
Goods are real - the little digits on the greenscreen are just money already made. I’d rather have an economy backed up by real things rather than vauge cyberworld transactions.
I think that the present situation proves my point.
It would be important for Americans that the major car manufacturers not collapse. Using bailout money for this purpose is far wiser than using it for bailing out the financial sector.
I would make stipulations with the bailout money: union wage contracts need to be adjusted downward…they have been historically, notoriously too high. Other contractual problems with insurance, retirement, etc. need to be reviewed and adjusted.
What was said about “site here in order to sell here” is something we must earnestly work toward. Tariffs are appropriate to protect the sovereignty of our country.
I object. Republicans are not victims. Democrats are.
Buchanan should have the humility to listen to the economists, who overwhelmingly think the rescue package was a necessary evil. Through the debate, the plan has evolved into a much smarter idea of buying stocks depressed by mark to market (among other things) and then selling them later at a profit.
The weakest two of the big three should go through bankruptcy and consolidate. They need to consolidate their research programs, so that there is only one program spending money on inferior technology which never makes it to the market.
I agree with Pat, and strangely, Nancy Pelosi.
Any bailing out of the Big 3 automakers needs to be tied to restructuring, making sure they are on board to produce fuel efficient AND solar driver automobiles.
It is NOT out of the realm of possibility that this could be accomplished within 3 years.
Where there’s a will, there is a way.
I agree with Pat that it would be an economical catastrophic blow to our economy that I’m not sure we would recover from. However on principle I don’t like it when government over involves itself in the private sector. Sometimes nature running it’s course is best but here I’m not so sure?
Even when I listen to people talk about this problem no one seems to mention one of the root causes besides expenses, sloppy management and a failed business model. Marketing seems to be a huge problem because the younger generation doesn’t even want American cars anymore. They are all over the Honda’s, Toyota’s, Nissan’s, Mitsubishi’s, etc. I don’t know about the rest of the world but this holds true in our country. Some kind of restructuring of the marketing to go after the younger generation seems to be missing.
“Marketing seems to be a huge problem because the younger generation doesn’t even want American cars anymore.”
I don’t know about that, Sky. There may be something to Americans buying foreign products when pro-Americanism is portrayed as silly or even racist. But the problem to me is that America is marketed to death with stupid advertising. How does a person get into advertising, anyway? There must be quite a bit of networking involved because the results don’t suggest that the best and birghtest are at work.
I’ve had American-made cars, and they usually start falling apart after 4 or 5 years, no matter how well they are maintained. The headliners never last more than a few years, the paint fades, anything electrical is suspect, air conditioners are installed to sell replacements. Detroit makes garbage. I don’t think that Detroit makes a single solid, affordable, basic car. Instead the focus seems to be on cramming as many useless and poorly designed bells and whistles into a shell, in order to justify the price.
Having worked as an auto mechanic, I can tell you that any American engine under 3 liters displacement is junk, pure and simple. The Big 3 have payed lip service to fuel efficient vehicles by plugging Japanese, Korean, and some European engines into Mexican bodies and selling them under American labels. Yes, it is within our strategic interests to have a healthy auto industry. The key word here is healthy. The Dems want to presreve the stauts quo where pot smoking, beer guzzling union laborors can crank out lemons all day and management longs for the return of the good old days when they could tell customers “You bought it! It’s your problem!”
Let them fail. Then the government can step in and sell off the divisions as new companies holding them accountable to produce a decent product which meets todays needs.
Bernie says:The Dems want to presreve the stauts quo where pot smoking, beer guzzling union laborors can crank out lemons all day and management longs for the return of the good old days when they could tell customers “You bought it! It’s your problem!”
Yeah, right. It’s all the laborers’ fault, not the engineers and designers. And not the CEO’s !?!?!?!????
Why does everyone continue to perpetuate the myth of a 700 billion dollar bailout? The original bill was for 750 billion. That was not passed. The second bill, which was passed, was for 850 billion… at one time… after that is used, they can do it again. It is a blank check. The price tag is up to 4 trillion. And hey, where did the “money” come from?
The dollar is history. This is a planned financial coup. Get your heads out of the sand. These companies are failing because we’re being robbed. The federal reserve is destroying the dollar (debt note) by printing more and more worthless paper. This is called the FIAT money system.
Who gives a sh*t about the auto industry. When I fail, I take the hits. Whether from job loss, or bad decisions. All those people in the car industry, who trusted their masters, should take their retirements and cash out, and put it into gold, silver, and other commodities. To force the citizens of the United States to pay for someone else’s mistakes is ludicrous. PREPOSTEROUS, as Congressman Ron Paul would say. It’s called STEALING.
Solution? Stop printing debt notes. Print our own money backed by silver and gold. End the fed (november 22nd). End our occupation of other countries. End regulation of the free market, and regulate the banksta’s. Whip the money changers from the temple!!! Give congress back her oversight, and authority. Restore our personal liberties, and restore property rights. Become a sovereign nation again. Close the borders. And by God man! Listen to Ron Paul. He was right 30 years ago, and he’s right today. If not? Enjoy the bread lines. Fools. All of you. Shame on you! Especially you Buchanan. Because you know better.
http://www.youtube.com/watch?v=tWk4SSeF1NM
Long live the revolution! http://www.campaignforliberty.com
Ron Paul on Fox Buiness, 11/18/08
http://www.youtube.com/watch?v=zp7UHYbCfBg
Putting aside the question of whether WWII was a necessary war, the allies won it with a major assist from the U.S. auto industry. The car and truck companies _ there were more than three then _ quickly retooled from producing civilian vehicles to building Jeeps, trucks and tanks for the U.S. military.
Losing the domestic auto industry would be a blow to national defense if another nonnuclear world war broke out.
MaryAnn,
Read closly. I did not say the auto woker, I said the affirmative action auto worker. I worked in Atlanta Assembly years ago making ElCamino’s and do know the labor intensive job. I became a supervisor and was told by a new hire Jesus told her she did not have to work today. She did not. She kept her job while other were sweating building cars. This was nothing compaired to the stories being told by the Detroit supervisors.
I am sure this is an emotional topic for some, but cost of employees is the issue.
Todd, I guess I can’t be a traitor no matter what the cost. This little Chevy truck I have just keeps going and going very reliability. I remember in the early eighties when we first started seeing people drive what we termed traitor mobiles. I have never bought one and on my worst day couldn’t even force myself too. I guess I’m an American. When Pat says “I guess there isn’t any economic patriotism anymore” I think he has a point because people no longer think as Americans they have become selfish.
Yeah, right. It’s all the laborers’ fault, not the engineers and designers. And not the CEO’s !?!?!?!????
(Quote)
I did say “And Management” We can also blame the buying public. In the 80’s, the Big 3 were gearing up for less oil following the Arab Oil Embargo (Anyone remember the gas lines of the 70’s?) GM had acutally planed to retire the V-8.
The last V-8 was supposed to be the 1987 Corvette. Two things happened. The Iran - Iraq war produced an oil glut because both sides needed reveue to support thier war effort and the buying publics response to the more fuel efficient versions of the vehicles they loved was “Its gutless!”
Cries for “More power!” were echoing back to the board rooms. Even Toyota ended up shoe horning a V-8 into thier 4 Runners and no longer offers a 4 cylinder variant of the vehicle.
Detroit never had a reputation for small fuel efficient vehicles and still has not convinced the public it can do it.
Pat Buchanan has always advocated fairness in foreign trade with some safeguards that would prevent trade deficits. I totally agree!
In his latest article, Pat called for reciprocal provisions in our trade agreements. That would be good if we could trust our negotiators to make such agreements and our trading partners to abide by what they sign. There is an alternative that we can put in place and enforce unilaterally. I discussed this proposal briefly with Pat Buchanan when he was campaigning for president, but he had a lot of other things to think about at the time.
We should allow tariff-free access to our markets only on products from countries that buy enough American goods and services to balance trade. To do that we need a trade-balancing tariff on imports from any country with which we have a trade deficit. The trade-balancing tariff on imports from a specific country would be proportional to our trade deficit with that country. That will provide an incentive for foreign countries to buy more American products in order to gain tariff-free access to our consumers.
Revenue collected from the trade-balancing tariff should be offset by a reduction in personal income tax to give Americans more purchasing power.
I have been pushing this idea for many years, but it has fallen on deaf ears. Now may be the time for it to find favor with a Congress that desperately needs a way to save our economy.
Tom Keith
4216 Wendell Dr.
Edmond, OK 73013
(405) 830-1039
tgkeith@att.net
Pat’s column is right-on. We bail out everything from Mexico to Wall Street and Paulson’s banker cohorts. Just enough bailing out to get John Q Public to start figuring out that it just may be the biggest hoax yet. But then, just like the little boy who cried ‘wolf’, the real danger appears on the scene. As if perfectly timed for failure, the only valid candidate (the auto industry) worthy of saving becomes a casualty, deemed unworthy of salvation due to its proximity and apparent evil stature to the preceding hoaxes. While it is true that the “Big 3″ need to conduct business differently in many ways from the way they have been; and the Union’s priorities (Yes, I’m a Union member) need to get a little less self-centered and a lot more patriotic, I think we all need to do the same. While it may be true that Toyota and Honda, for the most part, have built superior vehicles that were much easier on Americans’ pocketbook, it has always occurred to me that true, loyal men and women to our Republic could have still purchased vehicles made right here at home. I have always been willing to accept what may or may not have been second best or the less economical vehicle available on the market. My priority has always been and will always be to buy American. If enough of us would do that, Ford, GM, & Chrysler couldn’t help but improve their product until they, once again, would be the leaders.. and the phrase, “Made in Japan” might return to its previous laughable stature of 50 years ago. So yes, we must preserve our auto industry one way or another, subsequently implementing a plan such as Mr. Keith (see above) suggests. It’s a good one. Changes must, however, be made and millions that get spent on everything but building an automobile must be redirected. But please… if and when this reprieve occurs, each and every last one of us must do our part to make the industry a lasting success. Our economy, Our people, and Our Country need our loyalty. Even if it may not be the ‘best deal’ or even the ‘best value’ out there at the moment, it will be so in the future if we will all begin to faithfully Buy American.
William DeSimone
OrygunBilly@comcast.net
I don’t really know if I would bail out the big 3. They should be able to take care of themselves by now. How come the foreign car builders - Toyota, Nissen, and the others that build cars in the U.S. are thriving in the same labor market here? Why not analyize what they are doing right and go in their direction. Why should we subsidize the huge benefits the autor workers get, while the rest of us struggle to put food on the table?
The Neo-Cons like Bush, Gingrich, Bob Dole, McCain, and 2/3rds of Republicans in the Senate and House not only do not reciprocate on trade but they think massive trade deficits are GOOD. Now they think a failed US automanufacturing IS GOOD! They want US auto BANKRUPT! They want Americans to be earning what the JAPANESE earn, which is codeword for Chinese, cause hey they all look the same to them.
I switched from Republican to Constitution Party as soon as it looked like McCain was going to win, which was like early 2008. I didn’t waste my vote.
While working in San Jose Ca., I cam accross an article in the Mercury News. It was about the Toyota USA plant in Fremont. The CEO of Toyota USA was asked about GM’s problems. He began to point out the lay out of the Toyota plant. The Employee entrance was purosely placed in order so that they have to file past managers offices on thier way to and from work vitually forcing them to talk to one another. As Toyota was threatening to topple GM as the worlds #1 producer of cars, the word from above to the workers was “Hunility, hunility, humility, keep you mind on wha got us here, no boasting.”
The CEO went on to point out that in his plant, the workers wear the hats and shirts bearing the name and logo of the products they work on, in the GM plants, they wear UAW shirts and hats. This shows where thier loyalites truly are.
In the Toyota plant, lunchroom gossip is about the challenges of the day, in GM lunch rooms, the banter is about “My pay! My benifits, My time off”
So he went on to ask “Who can build the better product?”
Todd, I guess I can’t be a traitor no matter what the cost. This little Chevy truck I have just keeps going and going very reliability. I remember in the early eighties when we first started seeing people drive what we termed traitor mobiles. (Quote)
Toyota boasts that their vehicles are more American than those of Detroit. Your Chevy is most likely a Mexican body with a Canadian drive train. While the S-10 with the 4.3L V-6 did in fact turn ut to be a fairly good vehicle, the early models with the 2.5L I-4 and 2.8L V-6’s were utter lemons. Even the later model 4 cylinder S-10’s, while reliable were terribly gutless. Likewise, the Ford Rangers followed the same path. The 2.9L V-6’s were known to crack heads.
Currenty, the most unrelibale small truck is the Chevy Colerado which replaced the S-10. Chevy “Solved” The problem the same way Ford “Fixed” it’s Ranger. Ford turned over the Ranger to Mazda. Over the years, Mazda phased out the American engines and parts and replaced them with tier designs. Likewise, Chevy turned over the Colerado to Izuzu. So if you think you are buying American with a smal truck, you are not.
Here’s a viewpoint from someone who has been in automotive retail for 25 years. 1st of all, there are no more bad cars……only bad marketing and managment. GM builds cars that are every bit as good and sometimes better than Toyota.
It’s also important to realize that they have almost identical market share (20% each). Honda and Ford are close to each other at either side of 10%. How then is it that GM is facing bankruptcy with 1/5th of the largest auto market in the world?
There are several problems. A lot of it has to do with branding. There are currently north of 6,000 GM dealers vs 1500 for Toyota. What happens is GM builds too many cars for too many dealers. When that happens, the only way out is to dump inventory at the wholesale and retail level. GM and it’s dealer body, have done a wonderful job of training customers to wait for the fire sale. Look at the fall off after any large promotion: Employee pricing is the most recent folly. This sort of marketing cheapens the brand and widens the perception of quality between the domestic and import manufacturers.
There is a notable differnece in labor costs as well as legacy but that is just a piece of the problem. A larger issue is duplication of product within a company. GM spends boatloads of advertising dollars selling Silverados at Chev dealers. Then they turn around and spend equal amounts of money to market the same truck that happens to say Sierra (GMC) on it instead. Chrysler is guilty of the same thing. Do we really need town and country vans and Grand caravans?
What needs to happen is that GM should kill off everything except Chevrolet. Eliminate 2/3rds of the dealerbody and get their labor contracts thrown out. Obviously, this is a chapter 11 reorganization.
The next step would be to recover a captive financing arm that would allow them to lease vehicles again. By building brand image and consequently building residual values, they can afford to play in this essential market.
While we are on the subject of radical thought, here is another: We can’t fully blame the manufactureres for building gas guzzlers. The buying public is culpapble too. 6 months ago, SUV’s were “sale proof” and you couldn’t buy a hybrid with a pistol. Now, SUV sales are back and Priuses are available on nearly every lot in the country. This is a case of short-sightedness on the part of the consumer. $50/bbl oil is really gonna drive the nail in the coffin of the domestics. Ford, especially, is on the verge of introducing American versions of some great European cars that are fun and fuel efficient. Their next gen Hybrids are also gonna be great. While we are in this temporary lull of cheap gas, lets raise the federal taxes $1.00 per gallon. We’d force people to efficiency and lessen our dependance on foriegn oil. We’d support that market for the vehciles that are being built and just on the horizon.
That money would go a long way to paying for this massive restructuring. When oil goes back up, repeal the tax and we’d have a fairly healthy domestic auto business and not be the economic victims of the oil market.
Dear Mr. Buchanan: the fact that the american auto industry has spend decades making crappy cars is not the issue. If it was, the financials who have spend decades running our economy into the ground would also have not been bailed out. What this is about is putting the 3 million auto related union workers in the street to destroy their union won benefits for the profit of the financial banker class. (i am not a union member.) These workers vote mostly democratic as well. What needs to be done is to fire the entire upper level management teams at the “big” 3 and replace them with someone else - can always buy mangers from toyota and honda. Too bad the auto industry is not israeli owned and controlled. I expect then a bailout might be less of a problem. all best. i love your columns even tho i often disagree. AI
Have to agree with Mr. Carguy on a lot of his comments as well as Mr. Buchanan on the importance of keeping the car companies going, at least until the economic crisis settles down. To let them fail at this time would truly ensure entry into a thirties style depression.
One of the misconceptions being touted by the talking heads is the fallacy that the US automakers only sell gas guzzelers. My friends (i love to say that) I’ve got some waterfront property 40 miles west of Boca that has a beautiful view that I would love to sell you, if you believe that. Comparable size and weight vehicles (except diesel and hybrid) get about the same gas mileage. So if you think a Nissan Armada or a Infinity Q 45 gets 30 mpg please come see me. Europeans buy 75% of their new cars with diesel engines because they can get close to 40mpg.They aren’t the big V8s they are 1500 cc to 2000cc motors. Their gas engines are as small as 1000cc. Americans want and buy big cars and trucks and when gasoline goes north of $3 a gallon they feel it. Can you imagine a soccer mom squiring her kid around in a 1000cc Citroen tin can? Can you picture Joe the Plumber in anything but his 4 ton dually? (how else could he haul his 30 foot sport fisherman he bought during the housing bubble). No my friends Detroit was building what America wanted, as long as the petrol was cheap. Ask CARB why they killed diesels for the US and Europe seems to think they’re OK.
Detroit has lost market share for a lot of reasons; perceived quality and prestige is a big factor. today at a stop light there were 2 BMWs 1 Mercedes and 1 Lexus in front of me, none of them got better gas mileage than my Ford Escape and the cheapest of the lot cost twice as much. Yep Detroit has a real uphill battle but maybe they can pull it together if they get serious about quality and refinement and can slim down like Carguy sez. If I had to bet on any of the big 3 surviving I would have to go with Ford. Chrysler and GM need to fire all of their designers and start over. Some of the garbage they have on the showroom floor is just plain ugly. One of the things I would make the top management do as a condition of the loan is that they drive a Honda civic for a month and then drive the equivalent vehicle from their company for a month. After that drive the competitors vehicles say like the BMW X5 as compared to an Escape. If they do that they just may learn why they’ve lost market share and not blame it on somebody else.
As GM goes, so does the GOP? Perhaps this would be true if the current problems can be overcome with the proposed bailout. But, suppose the Big 3 just eats up the Bail Out money and asks for more and eventually go under anyway? If the Big 3 are truly hopeless, why delay the inevitable?
And, if a once-nothing country like South Korea could build a world standard auto industry from scratch within a couple of decades, who says the US can’t build wholly New Auto industries following the demise of the Big 3?
Destruction was good for Germany and Japan in WWII because it cleared the way for new factories with new technology. I say let’s pretend that that the US auto industry has been totally bombed out, and we need to start wholly from scratch–with new machinery, new labor contracts, new labor-management relationships, etc.
Don’t try to revive a dinosaur. Let new eggs hatch new creatures better suited to the new environment.
Bernie, You sound like a salesman at a Toyota dealership. I know there are faults with our country but I’m not into putting it down as bad as you always seem to. I don’t hate my country that’s the Democrats job. Now our politicians, that’s another matter. I love my country but our politicians? We’ll save that for another day.
Have you heard that the Party of EVIL (the Demoncraps) is considering seizing everyone’s 401K’s?
http://www.usnews.com/blogs/capital-commerce/2008/10/23/would-obama-dems-kill-401k-plans.html
“Nine days after an attack on the United States, this tiny clique of intellectuals [Neocons] was telling the President of the United States…that if he did not follow their war plans, he would be charged publicly with a “decisive surrender” to terrorism.
– Where the Right Went Wrong”
________________________________________________________________________
They also had a large number of willing accomplices who laid a power base in the Christian Zionist false Gospel of world rule from Jerusalem by a worldly “messiah” and a false “prosperity Gospel” of “debt is good” especially if it is owed to some TV preacher, et al … ad nauseam. This could only work to promote power for a while before the whole house of cards came down. It provided what others wanted (they are very much behind and involved in infiltrating both Republican and Democratic ranks for their own goals). The switch now in true dialectic fashion was also foreseen and planned for. For background (including a link to Mearsheimer-Walt) and current events and hardware see:
http://euphrosynoscafe.com/forum/viewtopic.php?f=6&t=8695
Wasn’t it Dick Darman who also said: “What difference does it make if the US exports computer chips or potato chips?”
Anyway, Pat, I think that if the GOP adopted your formula of traditional values coupled with economic populism, the party could be competitive against the Democrats. But I don’t think that will happen. It was not for nothing that the late Sam Francis called the Republican Party the Stupid Party. Besides, the party is too beholden to transnational corporate capitalism, and the ideology of transnational corporate capitalism is “free trade”.
Carguy has some good points. The $1.00 per gallon surcharge is not. In Georgia we pay a yearly car tag fee. Why not add $5.00 across the country to all drivers with tag and license renewals. This would be a lot easier to swallow financially and all drivers would benefit in the future with the innovations that could come from the Big 3?
It’s fair to criticize the American auto industry executive management. These CEO’s and upper level managers are just stooges for the blind-greed major stockholders (with a few exceptions). But, calling American auto technology poor is just plain wrong.
This misinformed chant of poor design and manufacturing inefficiency coming from our nontechnical media and Washington talking heads is not only wrong, but harmful to any chance of recovery.
There is a streak of unfairness running through the criticism of the big three’s focus on big trucks. Mercedes, Honda and Toyota also make their share of SUV’s and trucks. For the most part the American auto manufactures have built to satisfy consumer demand. If America doesn’t want big SUV’s – stop ordering them.
As for quality, Ford’s “Quality is Job 1″ effort has been a resounding success. Ford, in the Eighties, effectively integrated statistical process control into its manufacturing line and got the union on board. They experienced significant increases in quality and customer satisfaction.
GM’s Saturn plant is a state of the art manufacturing facility with advanced engine block casting techniques. GM has invested in fuel cell technology and alternative fuels. They will be putting the Volt into production and have received significant concessions from the union in order to keep manufacturing domestic.
Chrysler has been on the forefront of standardization and styling. Merging with Daimler, however, was a big mistake. All Daimler brought to the table was the tired old “German Engineering” hype and baloney. The result was a defocusing of the company and erosion of their customer service.
Here’s the worm’s-eye view solutions for the Big Three:
1) You need cash? Liquefy some of your assets like your foreign investments.
You claim that you’re concerned about American jobs, then focus your investments here, not in Cherry and Tata. Need to close a plant? – try the ones in China. The cash rich Chinese government will be happy to take your plants off your hands for a good price.
2) Stop introducing new models every year – it’s not necessary. Retooling hundreds of millions of dollars every year to just offer a new style is a waste of money. Instead introduce new models on 5 or 6 year cycles. Reduce your product lines to a smaller core of models. The money you will save in standardization and increased volume per model can be passed onto the consumer – thus making you more competitive.
3) Think beyond cars. Get into the mass transit business. In the early 20th century every American city had an extensive mass transit system. You could take a train anywhere for a reasonable ticket. In the 1940’s and 50’s the auto industry bought up every train line and trolley system they could get their hands on and junked them in order to force car dependency. The Auto Industry has terrific Engineering and R&D resources - It’s time to rethink the train, the bus and light rail and get on the forefront of this technology instead of your usual “me-too” behind the eight-ball pole position.
Tell the Unions to get real (and mean it)– if they won’t make reasonable concessions, shut down the Detroit plants and move them to another part of the country where the people will appreciate a good job. Modern manufacturing is far more mobile than in the past. ( By the way, we could use a nice auto plant here in Florida – the weather’s better than Michigan. )
The auto industries’ problems are solvable, but they need real leadership – not these stockholder monkey-puppets that are in charge now.
The unions need to make concessions but so does the board of directors – you can’t keeping squeezing for profits when the company needs to take a breath.
Bernie, You sound like a salesman at a Toyota dealership. I know there are faults with our country but I’m not into putting it down as bad as you always seem to.(Quote)
Toyota, not GM is the standard for making cars.
Simple fact. If we were as great as you claim, GM would not be going bankrupt. Pure and simple.
The likes of you screaming “Be patriotic! Buy our junk and live with it!” doesn’t cut it.
You cannot fix a problem until you first admit you have one.
As long as the big three continue to run the companies as they now do the bail out is usless. Chrysler has workers who are willing to work, but they won’t allow it due to a job restriction (i.e. can’t lift arm over head). These employees could do many other jobs, but the company chooses to pay them to sit home on their bums, and then pay private investigators to follow them around to make sure they can’t make up thier usual income with an odd job that wouldn’t require them to work 10 to 12 hours over their head. Then when workman’s comp runs out they tack on to our social security. If you don’t believe this do a little leg work. I live with one of these people. Management needs an overhaul; and until these egg heads are cast out, the bail out money will only be used for more frolicking around on their private jets.
Coke Heads, Alcoholics & Addicted Gamblers never voluntarily give up their addictions. They have to overdose, cripple a family member, or bankrupt their families before they wake up and change. Some never do.
Likewise, the American elite, and its befuddled Republican sockpuppets, will not give up their insane policies of using America’s corporations to implement social re-engineering. And, the UAW will never end a class-war dogma that extorts from the US Auto industry such wages, pensions & health care benefits that are far in excess of the industry’s international competitors.
At the same time, the US elite ensures that Ameican markets remain wide open to nations that run nationalist & predatory economic strategies: China, Japan, Korea, and the rest of the Asia rim.
The game is about to end. America’s deluded coke-head and alcoholic elite is just about to wrap the family car around a tree in the coming road-bend.
REFERENCE from BERNIE:
“In the Toyota plant, lunchroom gossip is about the challenges of the day, in GM lunch rooms, the banter is about “My pay! My benifits, My time off”
So he went on to ask “Who can build the better product?”
Carguy makes good points.
The Dealers have very good insight on the Auto Industry - Congress should be talking to them as well.
After all, this is a mainly a sales & marketing Problem not a design and manufacturing problem, as the TV guys would have you believe.
Pat,
I love hearing your opinions and you are a great fit on MSNBC, and you are exactly right about the big three. It is not patriotic, as an American, not to support it.
Actually Honda has surpassed Toyota as the NEW standard. Sorry but you had to have an update since your info is now dated.
I’ve never been of any other mindset than to buy American and I cannot understand how others get to a place where they betray their countrymen. Oh that’s right……SELFISHNESS and self interest.
United we stand and divided we fall. I guess we are in a free fall?
Although I am not a republican, it is finally a breath of fresh air to see someone who finally gets why the big 3 should be helped. And by the way, it is a loan not a bailout like the financials. Thank you very much for explaining it to everyone.
Pat,
I saw you on Hardball today talking about the trade imbalance of automobiles between Korea/Japan and US and I want to ask you this: have you ever been to Korea? There are plenty of foreign cars on the streets of Seoul, namely Lexus, Honda, Mercedes, BMW, Volkswagen, but not so many American brands. And the foreign car business has been steadiliy growing and Koreans’ appetite for foreign cars don’t seem to be diminishing despite all the depressing news about economy. To put it simply, it’s NOT the mythical restrictions and unbalance imposed by FTA and the Korean government that are hindering the sales growth of the American imports. Koreans DON’T WANT to buy American cars. If you buy a Lexux in Korea, you have pay a lot more than you’d pay for the same model in US and bring it to Korea even after paying all the tariffs, luxury taxes, and necessary expenses. And Toyota Korea openly admits that their marketing strategy is based on “high-margin policy”, meaning they will price Lexux higher than other competitors’ models to make their models look more “prestigious”, i.e. they tell it to your face that they will rip you off! Consider also the fact that the buying power of Korean consumers is less than that of Americans or Europeans, and yet these ridiculously priced Japanese (and also German) imports are selling like hotcakes amongst upper-middle class people who can afford them!
When you buy a foreign import in Korea, it’s not because the model you choose is the most economically sensible or practical choice; you’d buy a Korean car for that. You buy a foreign car because 1) you want one 2) Korean auto companies don’t offer models that are comparable to the cars made by Mercedez, BMW, Toyota, Honda, etc. And many Koreans are willing to pay the high premium to get the car they want, even though owning a foreign car means a lot of hassles (parts/services are more expensive, insurance premiums are higher, etc.) Some of the German models are known to receive quite a few complaints from the customers but it doesn’t seem to be stopping new customers from buying them. If I had enough desposable imcome to spend on an expensive foriegn car, I still wouldn’t buy an American car. Torus or Malibu, for example, are fine cars, but would I WANT to buy them when I have other better options? For what?
American auto companies have killed themselves not free trade policies or “predatory” competitors like Korea or Japanese. Politicians always pay lip service to the auto workers: “American workers are the hardes-working and the best and most efficient workers in the world”. Has anyone consider the possibility that they may not be?
Actually Honda has surpassed Toyota as the NEW standard. Sorry but you had to have an update since your info is now dated.(Quote)
If you really want the truth, Acura is now the most reliable, Honda is second, Subaru is third. Scion is Fourth, and Toyota has slipped to fith.
However, Toyota is the largest producer of cars in the world with GM still nudging ahead every now and then.
Notice there is not a one of the Big 3 among the top 5 most reliable?
US industry has been ransaked by a deadly duo of Economic Nationalists on the Pacific Rim and smirking fools at Wash DC base propaganda organizations like the Heritage Association.
This latter “Holier-than-Thou” crowd grins out from their Wash DC sincecures while Industrial America bleeds to death. They have destroyed America’s industrial leadership while pandering to their dual-nationality, geo-political strategies.
No one needs to go to Korea to know the nationalist warfare that the Asian nations wage against America. It only takes a look at the Balance of Payments data.
That data says that unless the US institutes Bi-lateral trade agreements, which require balanced trade and full mutual rights, the nationist regimes of Japan, Korea, and the four China’s will drive the American economy to its doom.
Dual-nationalities, which feed off the American social carcass, and brain-dead Americans will be all too happy to let help them do it.
I’ll keep my Chevy. As I said it runs great at 137,000 and still going strong. I haven’t seen my mechanic in so long I almost forget his name. I can do alot myself but I haven’t had to do anything in a while however it’s almost time for some more shoes and pads.
Pat, this entire subject is going to be a mere footnote to the history of the decline of America, and Western Civilization and Christendom. I just finished viewing your wonderful Book TV intervew — my advice is to get busy immediately on your next important work re the sweeping tide of religious fanaticism and ethnic identity that is irretractably changing the face of the western culture, while we’re mired in economic and civic decline. Rome is burning, the memoirs (however notable, I’m sure), can wait!
Republicans like free trade (i.e. idiot trade) because it keep the stock dividends coming. Liberals like it because it “sounds” good.
Conservatives hate it because it guts our nation’s ability to be strong economically. Conservatives are today’s black sheep in American politics because liberals use the term as an epithet. The politically correct have internalized this propaganda from the left, obliging many republicans toward political correctness making RIN-DIFs of themeselves — i.e. Republicans in Name, Democrats in Fact.
These RIN-DIFs playy a losing game. The more republicans that succumb to this PP (propaganda pressure), the weaker the Republican party becomes, for RIN-DIFs will simply never be as liberal as those democrats (in name).
True conservative ideas like those of Pat Buchanan are not just the country’s last hope to be free and prosperous, but the Repuiblican party’s only hope to compete with the liberal juggernaut. Either sign on and be conservative, or become a democrat. Stop sullying and perverting the party that remembers the past.
Free trade, does that mean even more cheap third world goods, from China and India, flooding Europe and USA, putting our people on the soup line.
Just what we need during a recession.
They go up, we go down.
Can this be true?
GM Investing $1 Billion in Brazilian Factory with Bailout $
General Motors will invest $1 Billion in a Brazilian Factory with US Bailout money! It is a lie the bailout will be used to protect American jobs.
Quote:
General Motors plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker.
According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government and will be used to “complete the renovation of the line of products up to 2012.”
“It wouldn’t be logical to withdraw the investment from where we’re growing, and our goal is to protect investments in emerging markets,”
http://www.laht.com/article.asp?Arti…tegoryId=12396
Can this be true?
Billionaire Hedge Fund Managers Under Investigation
Soros Claims He Just A Lucky Hungarian That Made Billions
So What Did These Fraudsters Do
They run a group of ‘Hedge Funds’ that bet on the collapse of America. They would buy a $ trillion dollars in mortgages for 2% down, or buy stock futures for pennies on the dollar, and the bet was everything would collapse. Sort of like you borrowing $10,000 from your bank, with $200 down, and then betting on a fixed horse race.
These same people were on the opposite side of the trade, and if they lost, they stiffed the banks, and that is what is behind the derivative debacle.
A derivative is simply placing an enormous bet with borrowed money. Abe Felder borrows $100 million, and then bets that corn prices will collapse, he loses, and Citicorp is stuck paying the Grossman Farm Collective the $100 million. When Citicorp goes bankrupt, then the American taxpayer gets the bill.
George Soros
Soros Fund Management
Famed as “the man who broke the Bank of England”, after netting more than $12bn by betting the pound would fall out of the Exchange Rate Mechanism in 1992, the 78-year-old has attacked unfettered free market capitalism as being at the root of today’s crisis.
Jim Simons
Renaissance Technologies
The world’s most expensive hedge fund manager, 70, charges clients 5 per cent a year, plus a whopping 44 per cent of returns beyond a certain level. His fund runs “black box” programmes that harvest tiny profits from billions of automated trades.
John Paulson
Paulson & Company
Having run an obscure fund for 14 years, the 52-year-old last year made what rivals called “the greatest hedge fund trade of all time”.
Philip Falcone
Harbinger Capital Partners
The 47-year-old made his fortune trading junk bonds in the Eighties. His firm was founded in 2001 and made another fortune last year betting against sub-prime mortgages. His two funds boasted 114 and 176 per cent returns in 2007.
Ken Griffin
Citadel Investment Group
Last year, it looked as the 40-year-old might become one of the world’s biggest financial players after buying up so many distressed funds, banks and brokers. Now he is fighting to save his fund after losing 35 per cent of it this year.
“Billionaire Hedge Fund Managers Under Investigation”
Who would have thought?
Dual passports???
Quotes from “Where have all the Leaders Gone”, By Lee Iacocca:
“First globalization is inescapable. And second because it is inescapable it is GOOD.”
When discussing he is experience at a “global village” conference he write on page 124:
I told them I was writing a book on leadership, and I asked them to help me out. “write to me,’ I said. And tell me what Globalization means to you. Their responses came from all over the world and they were filled with optimism and passion. YES to globalization! YES to cooperation! Their enthusiasm was infectious and I would like to thin it will infect the world.”
Certainly it has infected the world and it had infected the pensions of elderly Americans who are not as well off as Mr. Iacocca.
Page 112: “To fear globalization is to fear change.”
Is this the Automotive leadership consensus?
Anyway, shall I go on? Do you want more quotes from this TRAITOR???? He goes on and on about how great Mexican invaders are, How we need to tear down walls that protect our borders, how nice we should be to them and extend every third world immigrant a helping hand and let them in on “the American Dream,” Apparently the “American dream,” only exists for third world trash coming into this country at the expense of hard working taxpayers to rob and rape.
This moron is so stupid I can’t believe this idiot was a millionaire CEO and managed to do anything beneficial for the Chrysler Corporation, and obviously it was not enough nor was it long standing!.
Let the industry DIE!
I will continue to drive my little Big-3 Ford Escort wagon, with its Mazda designed engine, assembled in Mexico, since it continues to run so reliably and gets such good mpg. I think that if I’m ever invited to MSNBC, I will decline any offers of coffee though.
If the GOP liked the bankruptcy of Lehman, they’re gunna luv the end of GM.
Like a binging alcoholic that is destroying his livelihood and family, the GOP refuses to stop sucking down global “free trade” moonshine that does not exist outside of the self-destructing classrooms of an effete and self-congratulating academic elite.
None of America’s “allies” in Asia practises “free trade”. They practice a “Neo-Mercantilism” that takes advantage of Asia’s competitive advantage in cheap and sweated labor while targeting America’s advanced industrial sectors thru government subsidies and non-tariff trade barriers.
Just like a psychotic alcoholic, the GOP and its academic dream-spinners are just about to wrap the second American family car around the nearest telephone poll. It will be the second diaster within the space of four months.
Fannie Mae, Lehman Brothers, & Bernard Madoff should have been the wake up call that screams out American economic management is the hands of the insane.
Now the GOP is bent on smashing up America’s industrial heart-land and completing the transfer of US manufacturing to China, Japan and Korea.
Good-luck folks. Just light up the Opium Pipe and sell off California. There’s 49 more states left.
REF:
Opposition to the automaker bailout is fueled by the widespread perception that the companies themselves are responsible for their predicament, not the faltering economy. In the new poll, three-quarters of Americans said Detroit’s woes are mainly the fault of its own management decisions, and a sizable majority of those who blame the front office object to government help.
http://www.msnbc.msn.com/id/28248202