The Observation Deck

What happens to the pensions is that they get taken over by the PBGC and they apply their formula to decide how much is actually paid out. Then we bail out the PBGC. But that will be a whole lot cheaper than permitting the domestic automakers to operate status quo.

Tim, I respectfully disagree. Right now 1 in 10 jobs in the US are dependent on the auto industry. And our military needs us to have the auto industry in our country in case we need them - we have already outsourced too many industries.

But I think we can do this bail out intelligently. We want more green jobs. Loan them money like we did Chrysler who paid every dollar back to make energy efficent cars - to experiment with natural gas and other alternative energy sources.

Additionally working to reduce health care costs will benefit all of our industries and help the American people.

I think the group of economic advisors can help make this a win win situation.

I think the financial bailout was a fiasco. AIG used it to reward salespeople and others, The banks are filling their coffers and not lowering interest rates or making new loans, which would help the auto industry as well. It is my understanding that part of the problem is that few new loans for cars are being given compounding the problems. Maybe the government should insist that the bailout should entail more than enriching the shareholders.

JMHO

Lynn Farris wrote:I think the financial bailout was a fiasco. AIG used it to reward salespeople and others,

Why do you think an auto industry bailout would be any different?

Using billions of tax dollars to fund the auto industry is the American version of the Soviet policy of paying two people to watch a cow.

Bill, I understand where you are coming from but I don't think we can let this industry fail - it involves so many people and our national security as well.

I am a firm believer that we can learn from our mistakes and put enough controls on it that we all benefit. If you are watching Obama carefully, he is a student of history. He has learned from Clinton's mistakes and is eager to make sure he doesn't repeat those in his transition. When we loaned Chrysler money in the past, they paid it all back.

BTW, working to fix health care is a bailout for all of our companies and our people - but that isn't quick.

Working to solve our energy dependance is a national security issue as well as an environmental one. And it is one he promised to work on regardless.

Lynn, while i disagree with you on the auto industry bail out I can agree to disagree. However I need to take you up on one thing you said.

Bill, I understand where you are coming from but I don't think we can let this industry fail - it involves so many people and our national security as well.

How does the big 3 involve our national security?

If memory serves, the first Chrysler bailout was a $1.5 billion loan. The current bailout is in a way different league. We're already in for a $25 billion loan, and whatever they add in addition is likely to take it to $100 billion or more, money that has no hope of ever being recouped in any way.

can the Big 3 guarantee that the bail out money will stay in the US? Ford is spending a lot of money in China...

Stephen Eisel wrote:can the Big 3 guarantee that the bail out money will stay in the US? Ford is spending a lot of money in China...

and Mexico...

Here's what the railway workers got 70 years ago:

http://en.wikipedia.org/wiki/Railroad_Retirement_Board

However, rail transport was generally more important than personal automobiles.

some of the union rules didn't keep up with new diesel engines.

manufacturing is generally more important than wall street. wall street had been hollowing out local and regional banking agencies for decades. the sole purpose of Wall Street is to gather savings/investment and distribute them to stuff like manufacturing, canals, and rail. it became easier for wall street to generate quick "gains" by speculation fueled by outsourcing and liquidations.

the appeal of a pension plan in giganticism is the idea that pooling the funds can buy bigger spreads of equities. the company doesn't have to pay its workers as much if they are earmarking their wages for after retirement. workers aren't responsible for saving some of their income for later.

The 65 mpg Ford the U.S. Can't Have (clicky)

TOO PRICEY TO IMPORT
First of all, the engines are built in Britain, so labor costs are high. Plus the pound remains stronger than the greenback. At prevailing exchange rates, the Fiesta ECOnetic would sell for about $25,700 in the U.S. By contrast, the Prius typically goes for about $24,000. A $1,300 tax deduction available to buyers of new diesel cars could bring the price of the Fiesta to around $24,400. But Ford doesn't believe it could charge enough to make money on an imported ECOnetic.

Jim DeVito wrote:Lynn, while i disagree with you on the auto industry bail out I can agree to disagree. However I need to take you up on one thing you said.

Bill, I understand where you are coming from but I don't think we can let this industry fail - it involves so many people and our national security as well.

How does the big 3 involve our national security?

It's one of the last large reserve tool and die industries left in the US if you include the ancillary parts manufacturers. You lose them and you lose your capacity to make other large mechanical devices other than cars if needed.

Steve Hoffert wrote:

Jim DeVito wrote:Lynn, while i disagree with you on the auto industry bail out I can agree to disagree. However I need to take you up on one thing you said.

Bill, I understand where you are coming from but I don't think we can let this industry fail - it involves so many people and our national security as well.

How does the big 3 involve our national security?

It's one of the last large reserve tool and die industries left in the US if you include the ancillary parts manufacturers. You lose them and you lose your capacity to make other large mechanical devices other than cars if needed.

I still don't get it. How does the inability to build big metal things hinder our national security? I would imagine you are referring to tanks and military planes. I am not to sure we need a ford casting plant to build tanks and planes. I am pretty sure the tank and plane manufactures build that stuff. Also so far this country has been so scared and war hungry that I don't see us letting the ability to make war things slip away.

Anyway, Don't we get all that stuff from cheney co.

Tim Liston wrote:If memory serves, the first Chrysler bailout was a $1.5 billion loan. The current bailout is in a way different league. We're already in for a $25 billion loan, and whatever they add in addition is likely to take it to $100 billion or more, money that has no hope of ever being recouped in any way.

The bailout is going to happen no matter what we say but at least in a year or two we will have earned the right to say "I told you so"

GM stock is now worth $0 per share.
http://biz.yahoo.com/rb/081110/business ... clays.html

GM will lose about $15 billion this year and $25 billion next year. It will run out of cash before the end of next spring. Any money loaned to GM by the government will never be repaid.

What should happen is that GM should declare bankruptcy and operate under bankruptcy protection. The labor contracts should be voided, unprofitable plants closed and a new management team installed.

What will happen is that the federal government will loan hundreds of billions to GM and Ford simply to keep them operating under the current management team under the current union contracts. Welcome to Argentina.

Next year the federal budget deficit will be $1 TRILLION DOLLARS. Welcome to the Obamanation as the Weimar Republic or was that Peronist Argentina? I'm getting my economic models confused!!!

Hi,
AIG just went to the trough for a second time. $85 BILLION the first time now $65 BILLION more. All done licky split. Why throw so much money there and bicker about helping the auto industry?

Here's my idea to help all US businesses universally: Universal Health Care.

If the government picks up health care then all businesses that now have health care factored in their cost structure will get a huge break. Those bisunesses that didn't address health care before will now have a healthier work force. Plus, all US businesses will now be far more competitive on the World market. It's a big issue but we need a major program change and this would help everyone and not just the fat cats.

Don--- You have identified yourself (or maybe O'Bryan did) as a libertarian.

If that is so, how do you reconcile that philosophy with support for national health care run by the government?

Stan