The incredible hole of suck that is GM, Ford and Chrysler. (bankruptcy, loan)

[70Ford]

GM, Ford, Chrysler Want Emergency Aid : NPR
November 11th - need 25 billion.

Feb 17th - need 39 billion.
GM, Chrysler now say they need billions more | Freep.com | Detroit Free Press

In 3 months, they figured out they need 14 billion more dollars. Bullspit. They know what they needed. It's that "trickle" crap that banks pull. "Oh, we're only going to write off 10 million...ermm 40 million, ermm 480 million."

This is a slap in the balls. I mean seriously. The recession has been going on for a WHOLE YEAR. And you're telling me that they've just gotten around to figuring out how much they need to survive? That they need to cut costs? That the **** is gonna hit the fan?

Ok. Let's go with it. Let's say they are really that stupid. Why would you give stupid people 39 billion dollars? That doesn't make sense.

OH! We're going to make cars people want to buy! Gee, that makes a hell of a lot of sense. "Cuz, like Toyota and Honda aren't having any trouble at all...wait...they freaking ARE. So it's not the cars, MORANS. It's because people are tightening up. And a new car ain't on the list. Throwing money at them won't make people buy cars.

It's like your buddy saying "Hey, let's go to the strip club. And you're like, Nah. And he's like, but they need your money and you're like What? and he's like "I'm gonna give some money to the strip club people until you want to go to the strip club again. And you're not planning on going to the strip club for 5 years. So you say, Don't do that. And he's all like, "But they'll be no strippers if we don't go. They'll go out of business. And you just shake your head and he goes and gives the strippers 39 billion dollars.

You're still not going to the strip club. Does the strip club care? Nope. They just got paid.

People need to feel that their job is safe..and right now, it's not. People need to feel that tomorrow their bank won't disappear. People are scared, and rightfully so. Throwing money at GM won't fix that. It will keep people employed making something that other people don't want or can't afford.

Rationality is fighting with irrationality. I wonder who is gonna win.

[las vegas drunk]

I completely agree with you. It is just throwing good money after bad. I wish GM and Chrysler would just go out of business and quit taking are tax money. I am just so sick of all the bailouts.

[evilnewbie]

They should just file bankruptcy and restructure... their workers took advantage of the good times and now in the bad times, they need to pull their own weight...

[70Ford]

If people won't buy your product, guess what....you're bankrupt.
Auto parts makers ask for $18.5B in aid - Feb. 13, 2009

Don't forget the billions the auto parts compnies need.

[Oildog]

They should ask why Toyota or Honda or Audi isnt asking for a bailout...

try making products consumers want instead of fleet cars and rentals and you wont need a bailout.

[GregW]

This is the problem with a FIRE economy. If the credibility and credit run out there is no credit left to buy stuff. When buyers stop financing purchases the suppliers close and the credit owned by the company and the laid off employees doesn’t get paid back so it can't be loaned out the financiers go broke. When the companies, employees and financiers go broke they don't pay taxes and the government goes broke and stops paying wages or buying things the remaining manufacturers close and lay off all the remaining employees and the government does the same.

THEN WHERE ARE WE?

BROKE!

Time to start over with an Agricultural, mining and manufacturing economy financed on savings and investment. This kind of economy, if properly regulated to prevent booms and busts, creates actual wealth.

[bale002]

Originally Posted by GregW

Time to start over with an Agricultural, mining and manufacturing economy financed on savings and investment. This kind of economy, if properly regulated to prevent booms and busts, creates actual wealth.

Any structural economist worth his salt agrees with you.

The problem is that it appears that the powers that be in this country really do not want a production economy. This is illustrated in some of the monetarist threads posted by gwynedd1.

It is truly sad. Nor do I have confidence that a change could come from below - it is possible - but more likely it must come from responsible people, who care about economy and country, from the top.

There are no responsible people in this sense at the top right now and I see nothing of the sort emerging on the horizon right now, you?

If there were a grass-roots movement, it would have to start with local chambers of commerce and local government, people with real production ideas, skills and capital getting on with it.

But that's hard to do when FIRE-economy types dominate even these local institutions and they are still hard up for more.

The interest is in grabbing a larger piece of a stagnating or shrinking pie, not in expanding it, to the detriment of economy and country.

[cobolt]

I agree with all the above posters. It's really difficult for me to believe that any amount of money we throw at these guys will turn into anything good and productive in the long run. I'm also tiring of the "if we don't save these guys, it will mean more unemployment, catastrophe, blah blah" scare tactics and politics of fear. Let's scare the crap out of people so they'll panic and throw money at problems that can't be fixed with money. Uhmm. tried that before 3 times last year. Doesn't work. Already been past the third time's a charm deal. Let the bad guys fail. Yes, there will be unemployment and so forth, but what else is new? It's gonna get hard for a while, but it also leaves room for innovation and for others to step up along with the survival of the fittest. Sadly, we're all for propping up and enabling the weakest and leechers, both in business and society.

[delusianne]

Great thread title 70ford!

If anyone doesnt know this site, it's an aggregation of economic opinion/news; you can tell from its name that it concurs with you: iTulip.com - The Contrary Market View - For Independent Financial Advisor, Currency Online Trading, Commodity Online Trading, FOREX

Business is restructuring itself whether we like it or not. The Robert Reich blog entry below from a few weeks ago talks about it. Im sure there's much more online about it; if anyone could add any I would love to read more.

I think it's the defining moment of our time, maybe of our kids' time.

R. Reich from a few weeks ago on cyclist v. structuralist POV, and why the cyclist approach must be avoided next time if we can resist it: Robert Reich's Blog: The Real Fight Starts After the Stimulus is Enacted

(Found this while looking for another article: From Davos-We Are In The Midst Of A "Transformational Crisis." - BusinessWeek)

[delusianne]

Originally Posted by bale002

Any structural economist worth his salt agrees with you.

The problem is that it appears that the powers that be in this country really do not want a production economy. This is illustrated in some of the monetarist threads posted by gwynedd1.

It is truly sad. Nor do I have confidence that a change could come from below - it is possible - but more likely it must come from responsible people, who care about economy and country, from the top.

There are no responsible people in this sense at the top right now and I see nothing of the sort emerging on the horizon right now, you?

If there were a grass-roots movement, it would have to start with local chambers of commerce and local government, people with real production ideas, skills and capital getting on with it.

But that's hard to do when FIRE-economy types dominate even these local institutions and they are still hard up for more.

The interest is in grabbing a larger piece of a stagnating or shrinking pie, not in expanding it, to the detriment of economy and country.

I remember Bush in some speech talking a little about this: that we (the US, North America) were, or would be, the Information Economy of the world; the emerging economies would be Manufacturing...does anyone else remember this? I had the impression it meant we would lead the world by writing software, moving money, generating (electronic) paper.

I think that Information Economy business was a holdover/hangover from the days of the Tech bubble that no one wanted to look beyond, even though as I recall the bubble was bursting by then. This speech was made in the Greenspan days. We have been operating with that outdated and bubble-based business model all these following years.