November 10, 2008
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Auto Bailout
Democratic leaders are pressing the Treasury Department to bailout the automotive industry.
Congress had passed a $700 billion rescue plan but it was designed for financial institutions like banks. The reasoning at the time was that if the banks failed, the taxpayers would have to pay for it anyway.
But now the desire is to use some of that money to bailout the automotive industry in an attempt to save tens of thousands of jobs. Here is the link: Link
Do you think our tax dollars should go toward saving the automotive industry?
Comments (108)
Our economy is spoiled.
No, it’s not our fault that certain automakers have devoted themselves to making junky cars. If they can’t compete in the marketplace, then they deserve to fail.
Nope.
Yes? No? Unemployment is not good yet me (well, not me, since I don’t pay taxes, but the people) paying for the likes of Ford is not good either.
You know what would save the American automotive industry? Making better cars. ZING!
Agreed, they need to face real competition - because competition leads to better products for lower prices.
Tough call. That is indeed a HUGE part of our economy. I dunno. Hubby is much more well-versed on economic issues than I am. I think we’ll talk about that…eventually.
That woman is frightening me.
no.
just as long as they can afford social security.
no the previous bailouts have only slowed the hemorrhage of failure that is the US auto makers. maybe if they had actually made changes with the previous gov’t provided funds i would be inclined to have sympathy.
To save the jobs. Uh yeah.
To make better cars?? No.
No, why is it that everyone needs to get bailed out. Is there no accountability anymore? :sigh: I mean, wouldn’t it be better if we all just worked a little harder, made better products, and stopped whining about how the man is sticking it to us?
@UR_MUSE -
I second UR_MUSE
@StewieIsMyHero - Me too!!
We shouldn’t spend money to support an inferior product.
it would be in our better intrest .
This is indeed a tough call. I think that maybe the bailout that went towards the banks should have went to the auto industry but maybe that’s just my opinion.
…But since they already spent so much money that we really don’t have bailing the banks out, they should come up with another solution.
~1~
@DrugInducedDuck - you know, with all due respect, what the hell do you drive ? i have a 2006 impala SS which is probably one of the greatest cars i’ve ever had !
@StewieIsMyHero - LOL.
“The new law of evolution in corporate America seems to be survival of the unfittest. Well, in my book you either do it right or you get eliminated.” -Gordon Gecko in Wall Street
no please. if you keep bailing out the auto industry, they won`t work hard to make cheaper, more fuel-efficient cars.
you know, all you who are dissing the american automakers, just go and drive one for christ’s sake ! they WILL let you, you know ? then maybe you will actually know what the hell you’re talking about !
No idea.
@droptop11 - I don’t drive, I live in the city, and owning a car in the city is just dumb.
no, improoving it maybe. is boeing ever going to launch car sized jets? the Boeing Company is a major aerospace and defense corporation. it would look like a like a Halo 2 Banshee???
just for the sake of not increasing the unemployment rate even higher than it already is!
God help us all. The airline industry will be next. Followed by the IT industry who never really recovered from the bubble bursting back in the early part of this decade. When does it end? When will it end? I am absolutely terrified of what Pelosi will do to our economy and our country in the days coming. That woman is pure evil. I’ve brought myself around to giving Obama a chance, but Pelosi has already proven how destructive she’s capable of being.
@droptop11 - I have only driven Dodge vehicles all my life – my most recent is a 2008 Dodge Charger, which is by far the best and most superior car I’ve ever driven. My father was retired from 40 years at Chrysler before he passed. As a whole, my entire family has only driven Dodge or Chrysler or Plymouth vehicles. I believe in the quality of the vehicles from personal experience, but I still don’t think the bailout is a good idea.
@DrugInducedDuck - than how in the hell can you make that comment about american car quality ??
@DirtyAndShaken - my impala SS will take you off the line, butt you will catch me at around 70 !,,,,,,,the charger is another great american car !
@droptop11 - Because I’m American, and we have the 1st Ammendment.
@droptop11 - Good point! Actually, I helped my dad restore a 1966 Impala back in the late 80s/early 90s. It was a beautiful car. I wish I’d been old enough to drive it at the time. I miss that car. I have great respect for Impalas.
No. Let the free market decide who wins this one.
@QuantumStorm - If the free market is in the process of commiting suicide, I say we intervene.
@DrugInducedDuck - oh puleeese ! wrap that flag a little tighter around your balls !! lol !
No. Drive imports. They rock.
@huginn - This is hardly suicide. The free market does not consist of US automakers alone. Granted, it will be a bumpy ride, but it is not the end of days. If we should intervene, it should be by relaxing restrictions on the market and adopting a more laissez-faire attitude in order to give US automakers a more competitive advantage.
No, if a company is mismanaged or for some other reason fails then it is a risk that was taken. Other industries have fallen apart before and other large companies have fallen apart before, why should we start hurting the masses of taxpayers for the ineptness of auto companies?
@QuantumStorm - Good point, relaxing the restrictions would make it a more competitive playing field and give us something closer to a free market, which is something that I don’t believe we have had for at least the majority of the last century.
@QuantumStorm -
No. The automakers have been in trouble for years. They were a great boon for our country in the past, but I think their time is up. They have shown they can’t compete. We should focus our resources on what we are good at.
No, no no no no no no.
This is a socialist saying NO!
wth. people must stop.
Would that get people to buy more cars? Or make more cars people won’t buy?
No!
No.
No!
NO
NO. Bailing them out only absolves them of their responsibility to their customers, employees, stock holders, and the market. If the government does anything, it should relax regulations, making it possible for a start up company to build cars without having to invest too many millions of dollars just to get a vehicle on the market.
To keep the market alive, old companies need to be allowed to fade away, making room for newer, more dynamic companies. Development has stagnated for years, since the big 3 automakers have cemented their position through restrictive legislation. I truly believe we’d have vehicles running on alternative energy sources were it not for the government coddling the big 3 for so long.
Preston Tucker is one of my heroes.
I don’t even think we should have bailed out the banks. Way to use taxpayer dollars on toy wooden arrows and the feeding of big buisnesses taking over smaller ones! Oh, yeah… real smooth!
…oh yeah… almost forgot… 50th!!!
Lol, considering my parents both worked for GM, yes. Actually, a few of my other family members were and still are on salary and they were going to cut their benefits, which is bull. My grandfather worked for them for over 30 years and had his benefits cut…and he’s almost 85 and needs health insurance.
GO MICHIGAN!
Not one red cent to Detroit!
Who cares!? “I don’t have to worry about my mortgage anymore; I don’t have to worry about putting gas in my car!”
On another note…I think it’s inevitable that some of that money would be going to the autoindustry seeing that the loans that the autoindustry give are in some way connected to the banks. It is all about sharing the love.
HELL. NO.
nobody is bailing me out…
NO WAY! When an individual gets in a financial bind, there is only bankrupty as an option, YET the new law apparently makes individuals pay back a percentage of what they claim bankruptcy on, which Lord only knows how much that could be based on what they owe!
And the reason, the banks and auto industry is in this mess is simply because gas went to an all-time high thus impacting the cost of groceries and other stuff, like truck delivery cost. While I used to could get a can of corn for 2/$100, it’s now 92 cents a can here. And, the economy, in my opinion, did not worsen under Bush’s term as many have said. If you notice, people only started having a hard time when gas went from $1.60 a gallon, what I recall it to be BEFORE to sky high this past year. Figures, Obama gets elected and gas is at least reasonable now. I just have to wonder how great everyone would have thought he was/his term if he had been, or any other President, in office when gas prices skyrocketed. As I just telling my husband a few minutes ago, ALL we need now is to keep the gas price either at what it is (here $2.07/gallon) or lower and everyone will slowly get back on their feet, although I still don’t think grocery costs are going to go down much. They have seen people have to have groceries and will pay it so why go down, rofl!
On another note, as partially stated above..I was happy with President Bush. The way I see it if you subtract the Hurricane issues and the out of this world gas prices, he would have been thought a good President in history. He simply had to work with what he got handed out during his term, disasters and major inflation!
Anyways, that’s my thoughts, Dan, lol!
Cheryl
No.
I do not drive. I do not own a car and Nancy Pelosi is even uglier than Hillary.
Which donation do you think she is repaying with her amazing socialist plan?
Maybe the government should make cars so everyone can have one!
@Legendairy - Please stop.
If the automakers switched to making hybrid, electric and bio-fuel vehicles…yes.
dhl is going under,,, circut city filed for bankruptcy this morning,,, hahahahaha,,, no one can afford a computer,,, how are they going to afford a new car?
how many of you followed clintons advice to sign a living will not to be sustained by artificial life?
why sustain dying car companies with what few dollars may still be available,,,,
better to use this money to create an economy,,, then later on, maybe someone can afford a car.
Nope.
ps: creating an economy does not include bail outs or stimulus packages……
Whats the difference!?!?! A few trillion here, a few trillion there, the tax payers are always happy to help!!
Sure! If one bailout didn’t work, the only logical thing to do is another bailout!
Here’s an idea: tax the car companies less!
And people shouldn’t buy things they can’t afford.
@JUSTAVAPORHERE - Wait, you do know that Bush was elected in 2000, right? I don’t know how you managed to deceive yourself so badly, but I never paid more than $1.30 for gas until well over a year after the shrub was elected. I’d love to know how you think it didn’t worsen under him…
actually… it’s not a bad idea. It’s not ideal expenditure and in an ideal world we could let these companies fail. But we can’t. The US Economy is driven by consumer spending. If many thousands of people lose their job, how will that increase spending?
Then again these companies are laying off many people anyway so it’s not at all clear whether letting them fail will cause more or the same number of people to lose their job. However, the psychological effects of having one or more of the big three auto companies fail will be far more devastating. People will tighten their belts. Stocks will drop. And the depression will deepen. Honestly, it makes more sense to me to bail out the automakers in spite of their stupidity than the banks with their corruption.
IF the economy was running smoothly I would be happy to have had let the automakers take what they get, but right now we have to do something. So the question is HOW should we spend money on the automakers? A huge blank check I think is probably not the best way, but guaranteeing any loans the automakers receive from banks so that they get the loans they need to retain in operation together with short term government loans might work well. Conceivably the government could also take over some of the union backed pension and health care obligations of the automakers. That might also give them enough leeway to stay in business.
@DrugInducedDuck - Someone great once said that no one in the city drives because there’s too much traffic. (Philip J. Fry)
Seems like now would be an excellent time to purchase a vehicle… prices seem to be falling. I wonder what some of these salespeoples would do to seal the deal and make a sale… Wonder if I could talk them into having a dance-off….
Absolutely not. We’ve bailed out the automotive industry over and over — sometimes through explicit handouts, sometimes through relaxing standards so they can “compete” with foreign cars — and it’s done nothing. I don’t know anyone who really thinks that Ford or GM makes a better car, overall, than Toyota or Honda. If they would actually *gasp* think of making cars that appeal to more people, I’ll bet they would do better.
(Oh, and get rid of the unions, too — that might make them better.)
This is a double edged sword.
On the one hand – the “bail-out” thing goes against the very concept of capitalism. Yes i said it. What is capitalism? The means of production are privately owned – and by way of /competition/ does one earn profit by selling more than his competition. So when the government decides do “bail out” GM or Chase Bank or what have you – it says that, in our world of corporate darwinism – that these companies were not good enough to evolve in the changing times.
On the other hand – these companies employ thousands and letting the buisness fall would create a surplus of most likely unskilled (as far as the automotive industry goes, most workers are not very skilled outside of placing this here and screwing that there, clearly exceptions, but not always the case) workers who would then struggle to find jobs, and then social darwinism kicks in and they starve and suffer. But then everyone pays taxes for it and the buisness never learns its lessons.
So if you truly believe in capitalism – you would prefer to let the company go.
Yet if you do that, you find pressure on yourself in the workplace.
But if you believe more in the humanitarian cause – you would bail it out.
Yet if you do that, you find yourself bailing out more and more companies.
Its a no-win situation in my honest opinion. Clearly theres more issues than this but it would take forever to write out why or why not we should bail out a company in general. I say forget about them….they’re laying off people en-mass anyway. But then again. If we dont have people working, our economy will move from shambles to a pile on the floor.
@nephyo -
Perfectly well said and reasoned as well. Like i said – theres no clear winner in this. But i like the questions you’ve raised.
Lets the Japanese make our cars.
Absolutely not! Then what incentive do they have to make a better product? Then who is next to be bailed out? Bunch of whiny crybabies want their cake and eat it too! Make a better product!
Absolutely not – I’m sick of how the government spends our hard-working tax dollars.
dear government,
please stop throwing our money away. we already pay enough taxes as it is. and if you have to make us pay for these big businesses mistakes then at least get us some kind of “employee” discount!
sincerely,me
Where do people think we get all this money?
Stop trying to spend money that we don’t have!
the Greek root of “economy” is “oiconomia.” it means, literally, “a plan.”
The problem with our “economy” is that it is not a plan; it is instead a conglomerate effort to solve problems as they arise. A plan is a pre-decided, pre-deliberated system that also allows for running tweaks; in other words, “free-market,” because it fails to plan, is a plan to fail.
I’m being superficial today. I’m not responding to the question. I am simply noting that this is a horrid picture of Nancy Pelosi. She has green hair.
No.
when the smoke clears, everything will be nationalized except health care.
No!
no. no. no.
thank you very much.
Will that make my next new car cost less?
Hey why don’t the taxpayers just not buy anything for themselves? Give everyoneall their money!
hell no. I didn’t want the bail out plan in the first place. At least not how it’s being used.
No.
Yes… because my husband works in this industry and we need an income.
No! The automotive companies that are using 2.3 BILLION dollars of their reserves a month should stop making big ass cars that get 3 miles to the gallon and start making an affordable, dependable car that gets 30 or 40 (wouldn’t 50 be nicer) miles to the gallon.
Nope.
NO! The money should be split up among all legal adults in America! They’ll spend it on stuff, and what’s the economy based on? The sales of stuff! Thus, the refuel of the economy.
Why is the American government being so stupid? Oh… wait… it’s almost always been stupid…
uh.. i need a Steve bailout. just me, no other Steves
HELL to the NO! They’re the reason why public transportation sucks balls. GM back in the day bought out public transportation just so we’ll buy cars and spend thousands of dollars on gas. F-that. Screw the automotive industry. We as Americans need to ride bikes more often to lose weight and ride public transportation to reduce our carbon footprint.
No, No, No, a thousand times NO!
@k_cakes - uh, that makes no sense.
yeah, i think so. that’s a really big portion of the economy.
then again, my whole family’s in the car business, so i’m probably biased.
No. We shouldn’t have bailed out the banks…and we shouldn’t bail out this. The whole thing about a free market is that there are fluctuations due to the risks that companies take. If they mismanage their funds, that is NOT the fault of the American people and we should not be the ones to pay. Left alone, the market will right itself in due time. Government intervention kills the economy. Pelosi and our socialist Congress are going to run this country’s economy into the ground.
@ELLOgovena - it does make sense. if the auto industry is in trouble, it will want to sell more cars, right? so it will try to develop better products, i.e. fuel-efficient cars (since that’s what is in demand right now).
when japan first started flooding the market with their smaller, more fuel-efficient cars, the american auto industry did poorly and asked to be bailed out. well congress did indeed bail it out and what happened? they kept making big cars. … because big cars have a bigger profit margin.
my econ teacher is kickin` knowledge!
@California_Gal - AMEN!
wah, wah… sounds like my 2 year old.
As soon as someone is handin out free money, the rest of the low lifes fet in line. Is this the kind of change we should expect?
I feel bad for the many people who might lose their jobs, but how many times are we going to have to do this again? Just wondering. Life is hard and sometimes terrible, but we can’t bail people out every single time. I don’t think it’s possible.
In its present form, the American auto industry cannot be saved. We’d just be throwing more good money after bad. Any business that cannot survive without government support does not deserve to survive. Another bailout just enables continuing inefficiency, corruption & waste. We need to force them to fix themselves.
Nope. The reason they’re failing is because their cars and trucks can’t compete with the quality and dependability of so-called imports (many of which are made here in the US). Many of the cars are gas guzzlers so why would anyone want those cars? Why didn’t Detroit clue in when the rest of us did about big cars, trucks, and SUVs?? I would never own anything but a Toyota or a Mazda again.
No
Well… It amounts to a small-scale nationalization of the auto industry. The fact is, Ford, GM and Chrysler all made and continue to make shitty cars. They need to adjust to what consumers want and deserve, and they need to do it soon. It troubles me that, due to the speed at which the auto industry has become accustomed to introducing new cars, if this goes through, we won’t see a return on our investment for a while.
It doesn’t help that buying a used car is basically always a better decision than buying a new one, for multiple reasons (insurance costs, value, etc.).
It would only be fair to bail out automakers if you bail out banking. Both made poor decisions and investments but employ millions of people; not just through direct employees but all the support staff and industries that require their business.
@Zettista - Oh, and Mazda’s are Fords… if you didn’t know that already and it
didn’t seem you did since you were making general assumptions of all US
automakers.
Forgot about that! I used to drive a Ford Courier with Mazda seatbelts in it. You’d think I’d remember that little quirk!
No. When federal money goes into a private concern, then that firm becomes, in essence, a government subsidiary. A GSE… like Freddie Mack and Fannie May. This is nothing more than socialism on-the-sly.
The main reason the auto industry is in trouble is because of federal mandates in the first place. Another is the huge overhead due to heavy union contract demands and the resultant pension funds. Yet another is the continuance of an uneven playing field in the arena of overseas sales. GM, like many U.S. firms, operates under a number of disadvantages that foreign competitors lack.
The answer: Remove unfair and frivilous federal regulations and tax burdens from the auto industry, institute the National Right To Work Law and make reciprocity the fundamental rule of our overseas commerce policy… as it should always have been.
Of course, under an Obama administration, the precise opposite of that will happen. Democrats have successfully stymied all such attempts at reform and now, with a fellow socialist in the White House, will continue their assaults on the free economy of this country.