Here is one:
Re “Auto Executives Face a Hard Sell on Capitol Hill” (front page, Dec. 5):
I am one of those skeptics who believe that no amount of money will effect changes in businesses that keep their leadership in place. Promises aside, they’ve led their companies into the fix they’re in. A structured Chapter 11 is the way to go.
Also, I strongly suggest to the president-elect to institute a $1 tax on every gallon of gasoline on the day he takes office. With it, he can finance the desperately needed rebuilding of our infrastructure and create jobs. We Americans must have a powerful incentive to give up our wasteful, lazy ways ”” buying big cars, spending and driving unnecessarily.
Barack Obama must be honest with us; it’s not the economy of the country that is in peril, it’s the economy of the earth ”” and all its inhabitants.
Lawrence Holofcener
Fuel taxes already pay for the construction and maintenance of our highways and, moreover, they are used to fund massive public transportation boondoggles like light rail that are perpetual drains on the public purse.
I agree that bankruptcy is the way the Big Three should be given, but imposing a $1 a gallon tax is a blinkered, insane idea in the face of a deep recession.
I doubt if anyone who pretends to know that bankruptcy is the answer for American auto companies has truly considered the ramifications from these companies breaking the promises they have made in contracts that affect so many workers, suppliers, and communities. But, I guess in an age where the federal government leads the way with spending money we don’t have and ignoring the consequences to future generations this is the new morality. Jeffersonian beats the drum for bankruptcy. Does he understand how many innocent victims will suffer? Does he understand that there will be unintended consequences for consumers as well as the foreign companies he is a fanboy for? It is my understanding that one prominent foreign owned auto company recalled more vehicles than it built last year, and yet we never read about that. I wonder who benefits from this powder puff treatment?
Of course I understand that there will be pain, ToH. I worked at an assembly plant for years…many of them were, and are, my friends. But I also understand that the Big Three have made frightfully bad business decisions for decades, decisions that are now bringing them to the brink of insolvency. It is not in the interests of our country to prop up companies that misallocate and mismanage resources. It is even less in our interests to allow politicians to decide what vehicles these companies will produce, surely leading to even more egregious misallocation of capital.
No, if GM and Chrysler go Chapter 11, they might have a chance at survival, possibly as one company. The gravy train for the UAW will be derailed, but it’s going to be regardless. But I submit to you this is a far superior solution than making them perpetual wards of the state, an American Leyland manufacturing shoddy product no one wants at a price no one is willing to pay.
What Jeffersonian said!
Thank you, Jeffersonian.
The Taxpayers extended a credit of historic proportions to the Banks so that they would, in turn, extend credit to the rest of the economy.
I. If the Big 3 are not worthy of the Banks’ credit then the Big 3 are not worthy of the Taxpayers’ credit. They should be allowed to fail.
II. If the Big 3 are indeed worthy of the Bank’s credit, yet the Banks do not lend to the Big 3, then it is the Banks which are not worthy of the Taxpayers’ credit. They should be allowed to fail.
Therefore:
If the Taxpayers bail out both the Banks and the Big 3, then the Taxpayers are being defrauded.
I fail to find any substantive difference between what the Detroit automakers are accused by Congress of having done for decades — [i]i.e.[/i] spending far more money than they take in, and constructing unsustainably generous retirement and health care plans for their people — and what Congress itself has done for the entire nation over the same period.
Basically I am a free-trade list republican, but I fear that some help for the Big 3 would be in all our best interests. Many of my friends and neightbors are employed directly or indirectly by the auto industry. One thing to consider: Many of the vehicles they compete against are made in socialist-governed countries where retirement pensions and health care are state funded. Looks like that is where we are headed, anyway. You guys elected a left-wing socialist for president, so why not start converting to socialism here? Why fight it? It is inevitable. Sad. The demise of free enterprise capitalism.
[blockquote]I fail to find any substantive difference between what the Detroit automakers are accused by Congress of having done for decades—i.e. spending far more money than they take in, and constructing unsustainably generous retirement and health care plans for their people—and what Congress itself has done for the entire nation over the same period. [/blockquote]
At the risk of seeming reductionist, let me point to two:
1) The Big Three cannot print money
2) The Big Three cannot use guns to acquire revenue
Therein lies the difference between private and public. It’s also the reason we should never make the people with all the guns and the people with all the money be the same people.
You lost me in #9, Mr. J, but on this we agree: There is a need for reform in the auto business. But, I believe there’s room for reform all around. And I would submit that the big three are very different today than they were just a few years and even months ago. Perhaps we also agree that the market, rather than the government, should determine what vehicles should be built. But, we part ways is here: The government is already making demands on the industry that cost billions. These are the equivalent of unfunded mandates that neither customers nor automakers want to pay for, but take huge commitments in capital to fulfill.
Making the American-based auto industry the scapegoat for this once-in-a-century credit debacle is a knee-jerk reaction based on half-truths from times past. I believe the auto industry was never wrong to try to provide healthcare, a living wage, and some measure of job security to its workforce. And I submit to you that it’s legacy costs, not current labor costs (even with the obvious abuses here and there) that threaten the competitiveness of the U.S. automakers. Yet, for the most part, they have continued to live up to these old agreements rather than simply cry “uncle” and back out of them through bankruptcy. This is a sign of integrity, not a sign of weakness. Our foreign competitors do not have that burden to bear (for various reasons).
This is a complex problem, and won’t be solved easily. But, let me ask you this: What will we have to show for the hundreds of billions thrown at the banks and lending institutions when all is said and done? At least if you lend a small percentage of that money proportionally to the big three, you will be first in line for assets if they fail. But, if the government and Wall Street screw up the lending climate so that NOBODY (not just the big three) can get reasonable access to working capital (others are coming up empty as well, ask your local entrepreneurs) who is really to blame for that? Certainly not the automakers and their suppliers.