Monday, November 17, 2008

Panic in Detroit

Do I understand the financial markets or the economy? No. But I do understand that Wall Street has been promised over $700 billion, half of which has already been handed out with no oversight and no disclosure of who is getting the cash. AIG alone has walked up to the bail-out window to the tune of $150 billion in three months.

So it seems to me giving the automakers $25 billion—less than three percent—of that same bailout money to preserve millions of real, living wage manufacturing jobs and to help prop up an industry that actually makes a product—as opposed to one that shifts hypothetical credit defaults and bad loans around—doesn't seem so outrageous to me. Add to that the fact that this loan can be conditioned on The Big Three implementing some changes that will benefit the environment as well? It looks like fucking bargain by comparison.

Will the failure to deliver this money actually result in one or more of these dinosaurs going down? I don't know. But as someone who lived the last seven years in southeastern Michigan, I can tell you with certainty and seriousness that if one of them does, it will be akin to dropping a nuclear bomb on that area—everything from mid-Ohio north will be wiped out.

(NOTE: I have links to throw in there for a lot of that stuff, but I don't have time for that shit now...I'm at work after all...)


Smitty said...

I agree. At first, my gut told me that the Big 3 made shitty business decisions like continuing to build massive gas-guzzlers whereas the other companies were building affordable cars that didn't break after 36,000 miles.

But my gut also once told me that I could take several shots of drambuie after eating a plate of raw kibbie, so what the hell does my gut know?

Really, if even 1 of the Big 3 fails, industries that support or supply those companies, which reach all the way South the Florida and all the way West to California, and include thousands of dealerships, will also collapse.

So yeah, $25 million with big strings attached sounds like a bargain to me.

Bob said...

If the Government can give/loan over $100 Million to AIG, a company that employs 100,000 worldwide, they can LOAN $25 Million to three companies who employ 3 Million people in the United States alone.

Does anyone think AIG will pay it back? Doubtful. At least the big three have a good track record. When Chrysler received similar loans in the ealry 1980's, they paid back the loans, with interest EARLY.

Bob said...

By the way, simple way to pay for any loans to the big three...a new 10% tariff on any car or part that is imported from any country that restricts auto imports from the United States.

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