Auto bailout...nobody stating the obvious. (loans, make money, salaries, fees)

[texdav]

Originally Posted by f_m

I'm wondering to what extent the subsidizing was done. I haven't seen details about it. The US government does provide money for various research projects to the US companies, over $2 billion so far on various projects like PNGV and Freedomcar.

The 15 billion that was going to be use in the senate vote was from a subsidity that was set aside for the big three for future car innovations.That was the deal reached by Bush and Pelosi on where the money came from.I can remember when lobbyist got teh governamnt to get japnese compnies to actaully self limit imports when so the big three could keep sales up ;I beleive during the Reagan administraiton.From what i saw all it did was raise prices of cars overall to the comsumer.

[12GO]

Great post Dwatted Wabbit

[hello13685]

Right. Nobody is stating the obvious that these greedy companies have purposefully built products that self-destruct or otherwise fall apart at the seems at 60,000 miles (requiring constant service and parts replacement starting at that point). This was the American way (as opposed to the Japanese way), and the Big Three are just gonna have to eat it. Even if they are bailed out, who in their right mind will buy a piece of their crap? If people are ticked off that they are getting bailed out, you think they're going to run out and support them with MORE hard-earned dollars? My entire family drives Hondas, many of which make it to 100,000 miles on oil changes and tire replacement alone.

Hindsight2020: I buy your arguments, but by your logic of the college degree being the high school degree of the 21st century, must you not therefore conclude that those who hold only a high school diploma are the high school dropouts of the 21st century? If so, current college diploma earners may indeed expect to earn more (just as holders of high school diplomas in the 20th century could expect to earn more than high school dropouts).

[f_m]

Originally Posted by texdav

The 15 billion that was going to be use in the senate vote was from a subsidity that was set aside for the big three for future car innovations.That was the deal reached by Bush and Pelosi on where the money came from.I can remember when lobbyist got teh governamnt to get japnese compnies to actaully self limit imports when so the big three could keep sales up ;I beleive during the Reagan administraiton.From what i saw all it did was raise prices of cars overall to the comsumer.

That money was from the $25 billion they were going to loan any carmaker (meeting the requirements) for future cars, but that's a loan not subsidy.

http://articles.latimes.com/2008/sep...ness/fi-auto25

[Nepenthe]

Originally Posted by hindsight2020

What IrishTom said. College degrees are average nowadays and do not deserve any more compensation than a skilled trade that does not require a degree and is in higher demand... snip

I subscribe to the subjective theory of value (as opposed to the labor theory or the intrinsic value theory). Things are worth what people will pay for them, whether those things are widgets, cars, or employees. Someone could have Ph.D.s in multiple disciplines, pages of publication listings, a 190 IQ, and enviable awards, recommendations, and accomplishments. The supply of this type of "worker" will probably be extremely small. Yet, if the demand for this type of worker is even lower -- if these qualities are not valued in the workplace -- then the price paid (known as salary) would be low.

If the cost of entry into a job or career is low -- say, it requires a GED, an IQ of 80, and two weeks of training -- the supply might be higher for a job or career.

If the desirability of a job or career is low (the alternatives are better, the work is dangerous, distasteful, boring, etc), this would also be reflected in the supply of workers specializing or willing to work in that job or career -- the supply might be lower for an undesirable job or career. You have to consider both supply and demand as well as alternatives. If demand for a type of job is relatively high and supply of workers for a type of job is relatively low due to the high costs of ramping up for said job -- neurosurgeon comes to mind -- the two forces acting in concert will tend to push the equilibrium price (neurosurgeon's salary) up. If alternatives are more desirable (salary is higher, satisfaction is higher, bodily risk is lower, etc.), then resources (workers and their training/schooling) will tend to flow toward those alternatives, lowering supply for the first.

If an American-made automobile -- designed and built in the US -- is objectively superior to another similar automobile -- let's say it gets better mileage, has smaller panel gaps, is quieter, is more aerodynamic, accelerates faster, holds more stuff, etc. -- and the cost of creating that automobile was higher (due to anything, design and engineering costs, labor costs, whatever) -- the value associated with that vehicle will STILL be SUBJECTIVE and this will determine quantity sold based on demand. Some of this subjectivity might be down to what some might call irrationality -- "I'll never buy another domestic car" or "Japanese and European cars are always superior," for instance. Subjectivity is like that.

There's another force at work here -- the amount of pain the working staff can inflict by refusing to work. This is where unions come in. It's based on the inability to obtain alternatives and in this respect I suppose the best analogy to the consumer market would be with utilities or commodities.

I wanted to describe this to show my understanding of these concepts and show that salary is not what I'm talking about below. Moving on...

Originally Posted by Humanoid

The US isn't in particular need of interior design firms...

There's the message. Humanoid wants your company to fail, or at least couldn't care less that it is. He doesn't think you contribute anything to the good of society, to the advancement, after all. He disdains your waste. You don't produce anything tangible, after all. We're not in particular need of you. Off with ye. Come back when you produce something important.

Fortunately, it's a big country and he alone does not get to decide what is important, what is valued and how much, and who fails or succeeds. If he did he'd probably put many tens of millions of people out of work as soon as possible.

Originally Posted by Humanoid

...manufacturing on the other hand is rather important right now.

Rather important? The consumer market and the labor market will determine that. Beyond the allocation of resources and the valuation of consumer and labor elements, why do you insist on placing manufacturing on a pedestal above everything else?

Originally Posted by Humanoid

The amount of resistance to help working Americans is amazing...

Your arrogance is also amazing. As if people who don't work in a factory (i.e., I'm not a "working American") should bow down and realize they're worthless and should realize the absolute superiority of "working Americans" in factories because they actually "work" while we're good for nothing. Viva la revolution, eh?

Originally Posted by Humanoid

...I'm talking about the paper pushers that leech on the productivity of the working class.

And you aren't pushing class warfare?

Originally Posted by Humanoid

If its not clear how something supports production, then its more than likely waste in the system... One thing matters in an economy - production.

This supposes two things: A) that people are unwilling to pay for anything other than tangible produced goods, and B) that an economy can never in time progress beyond being a strictly industrial economy.

Originally Posted by Humanoid

...working Americans, rather than say the leeches of Rentier capitalism.

Ahhhhh, here we go. How can anyone take your opinions and assertions seriously when you display such obvious bias? Such venom and disdain and an apparent but thinly-veiled Marxist agenda? Passive income is bad, mmmmkay?

Originally Posted by Humanoid

When I go into an office, I see a lot of paper pushers. I really don't know what they do, I ask and still don't really get it. Does it take that many people to do that? When I go into a factory, a development studio etc....I understand what is going on. Everyone seems to be productive.

Originally Posted by Nepenthe

Yah, I see what you mean, as this would also be my four year old niece's take.

To clarify, I think this is ridiculous. You don't see little elves clearly putting wheels on wooden toy choo choos when you go into an office, so they must not be doing anything important? You don't understand the cursory explanation given when you ask around so it must be something that should die out?

Maybe it's off-topic for this thread. It is not the money issue I'm talking about. It's the attempt to shame, vilify, belittle, discredit, and debase those who aren't directly involved in factory work and manufacturing.

[AnthonyB]

This white collar/blue collar superiority argument is ridiculous.

There is absolutely no good reason for all other workers to deliberately support and subsidize only one group of workers, be they bankers, farmers or auto workers.

Either they produce something other people want and can justify their salaries, or they can't. Whether that something is asset management, car doors or high fructose corn syrup, the market should be deciding the value of that work. If the businesses fail - because they sucked at organizing other peoples money, made cars nobody wanted or produced a product that makes us fat, they should fail and successful businesses should take over.

[Nepenthe]

A Modest Proposal For The Auto Industry: Stop Building Cars

[neil0311]

Originally Posted by Humanoid

Allowing the US auto makers to fail right now....is pretty much absurd. If they collapse the costs will be far greater.

This false dichotomy that either we have to pump in government money or GM, Ford, Chrysler will just cease to exist, and the world will stop turning, is incorrect. There are bankruptcy laws on the books for a reason. The "big three" have the ability to utilize these laws to restructure and emerge in better shape, but they won't do so. The union doesn't want bankruptcy because it would mean that a judge would have the power to throw all their collective bargaining agreements out the window and start over.

[Irishtom29]

Originally Posted by car54

I'll never forget those early 70's film images of UAW workers laughing as they took sledge hammers to a fugly little Toyota.

Confucius say...He who laughs last, laughs best.

You won't laugh if frustrated workers become radicals and communists and turn the hammers on you.

[Dwatted Wabbit]

Originally Posted by 12GO

Great post Dwatted Wabbit

Thank you, 12.

Next I want to go to Haavahd and get my MBA so I can be a financial wizzard like #43.