Wednesday, December 17, 2008

An object lesson on socialism, bailouts and recession

"There are no athiests in foxholes, and there are no Libertarians in financial crises."
--Paul Krugman

Just remember, it's not socialism if the money goes to the rich.

[remember to click on the image so you can read the fine print]

Enjoy the biggest flip flops of all political time from the "anti-welfare, pull-yourself-up-by-your-bootstraps" neocon folks,


[quote via MSNBC, photo uncredited at Pixdaus supplied by Estu]


babs said...

my '91 diahatsu, a 3cylinder korean wonder car, gave up the ghost last week after 15 years, 165k cross country miles. . . that car was a little TANK, R.I.P.

outside my window now is an '83 toyota camry - mileage says "84k" - so I'm guessing 284k - point me to the american made P.O.S. that could ever say that. the drive is sweet, clock/heater/and all bits work fine. . .

how many U.S. made vehicles do you see on lots that are - ahem - 25 years old?

One Mule Team said...

Well it isn't 250K but I have no doubt that my american made truck will be romping well past 200K. I think to a certain extent japanese manufacturers are enjoying a reputation for reliability built on the past not the present.

The idea that american manufacturers don't make quality vehicles is simply false. It is fine to discuss vehicles that are 25 years old or so. I certainly wouldn't want a 25 year old american vehicle. But looking at the vehicles that are being manufactured more recently is a different issue. Reliability isn't the problem.

Looking at three year reliability ratings, Mercury, Cadillac, Ford, Buick and Lincoln all produce vehicles better than the industry average by brand. Those brands are ahead of Mercedes Benz and Subaru and nissan as well, I believe. No american brand ranks below VW, Saab, Isuzi, Kia, Suzuki or Land Rover.

Looking at individual categories, american manufactures excel in the midsize car market, are relatively unimpressive in the sub-compact to compact market and are ok in the premium market. The trucks brands are among the best in the world and as a whole probably are the best, period.

Reliability isn't an actual problem but an issue of perception. Many of the other brands are viewed as "cooler" to own and this view is entrenched. Again, perception.

management has been an issue, no doubt. Toyota is doing fine b/c they didn't put all of their eggs into the truck basket. Also, foreign manufacturers have had a solid domestic market where the compact vehicle is king, gving them an advantage in that market much as US companies had an advantage in the truck market.

US automakers do have additional expenses such as health care not paid by other manufacturers. I'm not saying us companies are blameless but I think marketing and models have been the issue not reliability.

I also have no problem with a loan to automakers that provides oversight and comes with conditions. If these companies go under choas and job losses will wind their way through the market affecting, and not in a good way, tens of millions of people.

Now the irony of the republicans supporting a bailout, that is entirely another matter and is not lost on me.

Katye said...

Nice thesis, Bman.

The plight of the economy is such an interesting topic at this stage of the game. Too complicated for an easy synposis or history lesson as to how we got here...but the word that continues to come to mind for me is "entitlement".

It's impossibly hard to say, 'yep, those auto workers deserve to screw the pooch because their management made poor business decisions (makes, models, markets) for the last...oh...25 years' and yet it's really hard for me to say 'bail 'em out' because I DON'T think there will be oversight, rules or regs attached to any money.

The 'free' market is completely dominated by forces beyond the boundaries of the US. Globalization growth pains, ie American companies should be 'entitled' to do business with the blinders on to free market demands (i.e. makes, models, markets)is part of the problem US Auto makers are owning up to.There is a newly expanding world economy, like it or not, with way different rules in place. I like to think there is a newly expanded world consciousness coming up alongside the rape and pillage that is occuring, but I can't be THAT hopeful just yet.

Either way, there is a huge market correction underway and it's not going to stop any time soon. We (gov and consumers) have dug ourselves into a DEEP ass pit that won't be gotten out of without some serious frugality in the future. Frugal is a concept that I think possibly 2 whole generations in this country have no clue about, which makes the correction of the correction an ugly prospect.

You can't pay one dude to head a Corporation 15 million dollars and the worker of that corporation minimum wage and expect the worker to be the consumer that drives the economy. HELLO! Unfortunately, that dude making the 15 million has been SAVING his deferred in many cases, so a little correction in favor of the little guy is fine by me.

You can't work with the tax code for years and years and not be a touch bitter...ooh, I just said that with my outloud voice.

Where is Stu to set all us young'ins straight?

Bpaul said...

Great commentary on this post.

I knew that the poster was too simplistic when I posted it, but I was so irked by the situation I just let fly regardless.

I will say that when The Wife and I had our electrical contracting company, our fleet of vans were Chevy's, and they were MISERABLE. They were in the shop constantly, over piddily shit like doors that stopped closing right. We lost so much time to those damned vans.

So, I got a bad taste in my mouth about american made vehicles.

Mule does make a good point though, Ford trucks are still kick ass and are one of the front-runners in their class. If farmers in the midwest use them, they must hold up, because farmers talk. If they gave out after 200k the next year not a farmer in the country would buy one.

I appreciate folks making such great commentary posts.


babs said...

bankrupt the U.S. automakers, give the leftovers to the workers - then bail the WORKERS out, and give them a "green" agenda to work with. . .

they're doing it in south american factories, eh?

a long time ago I remember watching M. Moore's first docu-commentary - "Roger & Me" - about how Flint Michigan was left high 'n' dry by the auto industry as "globalisation" and outsourcing took hold. recommended.

f**k the overpaid - they have their dosh, they can bugger off now.

One Mule Team said...

More than the automakers, what irks me presently is the Wall Street bailout with banks sitting on billions of taxpayer money.

The other, historic bailout that really chapped my hide was the airline industry bailout post 911--then they turned right around and laid off some 20,000 people. What a crock!

Catherine Just said...

I really like all of this dialogue. It's funny because I am married into a family that owns Chevy, Hummer, Nissan, Kia, Cadillac, Pontiac, Buick and GMC truck dealerships. I have never been a fan of most of these. I was brought up to believe that Chevy and other American cars were all crap. We never had one growing up so I couldn't say if that were true for us - just part of what we believed in our home.
My family only buys cars that are BMW, Honda, Acura, and the like. And a lot of them ended up needing a lot of work, a lot of the time. Mainly BMW. But boy are they sexy looking cars so who cares right?
Anyhow - What I'm getting at is that now I have a Chevy Cobalt. At first I was totally against the idea because of my families beliefs and that of most of the people I knew. Plus I didn't think it was a sexy car. However, I LOVE this car and actually must admit that it's the best car I've ever had. Yep, you heard right. yes, I've only had the car for about 3 years so we shall see what the future holds.
My husband has only driven cars that his family sells and actually had his last Chevy for 10 years and it was a great vehicle the entire time. no major complaints which is surprising to me, but true. He tells me that in his lifetime he's had cars that were stereotypically ugly, but not one that was stereotypically bad. that also surprises me. not that this really matters - but wanted to just throw it out there since we are effected by all of this in a totally different way than most of you guys because it effects our family.
I think in the middle of all of this Citibank got $30 billion without much of a ta-do and the people who have worked for these car companies are waiting desperately to find out if they have a job regardless of the management issues that these car companies have had. I think that totally sucks no matter what you think of the car itself.
I just think it's crazy that they are giving out so much money to wall street etc and then sitting on their thumbs with this car thing.
I personally wouldn't mind a 1962 corvette myself.
And I also wouldn't mind an overhaul in the auto industry itself if it made the american cars have a better name, and more positive customer response to it's vehicles.
Jerry has more to say on the matter - but he's running around and I can't catch him right now.

Chuck Butcher said...

I'd guess I qualify as a car enthusiast. I've had involvement with Japanese cars that left a horrid aftertaste and yet my son has had one that was outstanding. I seem to have missed the 80s and 90s in domestic vehicles, however my wife's 2003 Pontiac gave up nothing to its price matches while I didn't like it and the 2004 SSR beats anything in its price range.

Perception is a huge issue with big ticket items and previous problems and how they were dealt with make or break you. I deal in big ticket items, believe me, there is no small problem at these price levels.

Chuck Butcher said...

Babs, 165K at 10K/yr cross country and it's dead? sorry to tell you that in an American car 150K is where you start to expect it to nickle and dime you, not die.

As for 25yrs, my work truck is a '78 K20 Chevy that has spent the last 20yrs carrying overload every day, it's on its third engine and second tranny and well over 500K miles and going strong. It doesn't have an easy life.

Just as a so what, I use a 1950 Chevy COE 24K GVW dump truck. It does lack a few modern conveniences...

As for how many 25 year old foreign vehicles? About 10% as many as US built ones and this area is hard on vehicles. NE OR.

babs said...

I was comparing a 3cylinder foreign car to a comparable US built CAR actually - trucks are a different breed, and as BP says, they serve different "markets" and therefore are held to different standards in the construction - "farmers talk" indeed.

prior to my living a car-free 20years in europe - land of superb, and affordable transit options - I owned a Ford Pinto, a Chevy Vega, and a Datsun B210 - my first car was a '65 Chevy Malibu, but then the late 70's and one of those "oil shortages" made small cars "necessary" (hehe, old enough to see "history" repeat itself)...

the aforementioned US small cars REGULARLY broke down for various reasons. . .the Datsun was stellar, and I kept it until I left for London - not one breakdown, and cheap to run. . .

. . .like my Diahatsu. which may not have been a truck, and maybe 165k is not so impressive - but it's a rare US made SMALL car that would see that mileage, in my experience. . .
(I'm in N. Oregon too)