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Wall Street Journal: 'Just Say No to Detroit'

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On the very top of this weekend's WSJ, there's a Chrysler Pacific dashboard with a red slash through the steering wheel. It reads...

BAIL OUT DETROIT?

WRONG WAY,

DO NOT ENTER

Just Say No to Detroit

Given the abysmal performance by Detroit's Big Three, it would be better to send each employee a check than to waste it on a bailout, says David Yermack.

PT-AK196_NOBAIL_D_20081114170031.jpg

Before Michael Moore became famous for documentaries like "Fahrenheit 9/11" and "Sicko," his first big success came in 1989 with "Roger and Me." In that film, Mr. Moore followed General Motors chairman and chief executive Roger Smith with a camera crew, asking him why the company was closing plants and producing low-quality vehicles. Mr. Smith looked flustered and inartfully avoided Mr. Moore's camera crew while it lingered outside his country club or GM's executive offices.

"Roger and Me" was entertaining, but it missed the real story about Roger Smith, who turned out to be a forward-thinking genius. Mr. Smith made big investments in information technology and satellite communications, acquiring Electronic Data Systems in 1984 for $2.5 billion and Hughes Aircraft in 1985 for $5.2 billion. Mr. Smith's successors divested those businesses at huge profits -- EDS was taken public in 1996 for more than $27 billion, and Hughes, renamed DirecTV, went public in 2003 for more than $23 billion. (The man who sold EDS to Roger Smith at a bargain price was H. Ross Perot, who then convinced many people that the experience qualified him to be president.)

Mr. Smith understood all too well that GM shouldn't continue investing in its failing automobile business. That was 25 years ago. Today, our government is being asked to put tens of billions of dollars in GM, Ford and Chrysler, but we would be much better off if Washington allowed these companies to go bankrupt and disappear.

In 1993, the legendary economist Michael Jensen gave his presidential address to the American Finance Association. Mr. Jensen's presentation included a ranking of which U.S. companies had made the most money-losing investments during the decade of the 1980s. The top two companies on his list were General Motors and Ford, which between them had destroyed $110 billion in capital between 1980 and 1990, according to Mr. Jensen's calculations.

I was a student in Mr. Jensen's business-school class around that time, and one day he put those rankings on the board and shouted "J'accuse!" He wanted his students to understand that when a company makes money-losing investments, the cost falls upon all of society. Investment capital represents our limited stock of national savings, and when companies spend it badly, our future well-being is compromised. Mr. Jensen made his presentation more than 15 years ago, and even then it seemed obvious that the right strategy for GM would be to exit the car business, because many other companies made better vehicles at lower cost.

Roger Smith, who retired as chairman in 1990, seemed to understand that all too well, and so did Chrysler's management, which happily sold their company to Daimler Benz for $30.5 billion in 1998. That deal, one of the savviest corporate divestitures ever, ended very badly for Daimler, which essentially paid Cerberus a few billion dollars (by agreeing to retain pension liabilities) to take Chrysler off its hands in 2007.

Over the past decade, the capital destruction by GM has been breathtaking, on a greater scale than documented by Mr. Jensen for the 1980s. GM has invested $310 billion in its business between 1998 and 2007. The total depreciation of GM's physical plant during this period was $128 billion, meaning that a net $182 billion of society's capital has been pumped into GM over the past decade -- a waste of about $1.5 billion per month of national savings. The story at Ford has not been as adverse but is still disheartening, as Ford has invested $155 billion and consumed $8 billion net of depreciation since 1998.

As a society, we have very little to show for this $465 billion. At the end of 1998, GM's market capitalization was $46 billion and Ford's was $71 billion. Today both firms have negligible value, with share prices in the low single digits. Both are facing imminent bankruptcy and delisting from the major stock exchanges. Along with management, the companies' unions and even their regulators in Washington may have their own culpability, a topic that merits its own separate discussion. Yet one can only imagine how the $465 billion could have been used better -- for instance, GM and Ford could have closed their own facilities and acquired all of the shares of Honda, Toyota, Nissan and Volkswagen.

The implications of this story for Washington policy makers are obvious. Investing in the major auto companies today would be throwing good money after bad. Many are suggesting that $25 billion of public money be immediately injected into the auto business in order to buy time for an even larger bailout to be organized. We would do better to set this money on fire rather than using it to keep these dying firms on life support, setting them up for even more money-losing investments in the future.

Two main arguments are being raised to justify a government rescue of the auto industry. First, large numbers of jobs may be at stake, perhaps as many as three million if one counts all the other firms that supply the Big Three. This greatly overstates the situation. Americans are not going to stop driving cars, and if GM, Ford and Chrysler disappear, other companies will expand to soak up their market share, adding jobs in the process. Many suppliers will also stay in business to satisfy the residual demand for spare parts even if the Detroit manufacturers go under. If the government wants to spend $25 billion to protect auto workers, it would do better to transfer the money to them directly (perhaps by cutting each worker a check for $10,000) rather than by keeping their unproductive employer in business.

Second, it is suggested that the failures of the U.S. financial industry, which have cost us something like $700 billion, justify bailouts of other sectors of the economy. This makes no sense. If the government diverts our national savings into businesses that have long track records of destroying investment capital, eventually we'll end up with an economy like France's -- or Zimbabwe's.

Other arguments are on the table as well. Some see the troubles at GM and Ford as opportunities to retool the auto industry to produce environmentally friendly cars. Given their long track records of lobbying against fuel economy standards and producing oversized gas guzzlers, this suggestion seems ridiculous, sort of like asking cigarette companies to help with cancer research.

Not many of my students today remember "Roger and Me" (many confuse the film with another picture from the same era about the cartoon character Roger Rabbit). However, Roger Smith's example casts a long shadow over the auto industry today. It's time to cut our losses and let society's scarce investment capital flow to an industry with more long-term potential to create jobs and economic value.

http://online.wsj.com/article/SB122669746125629365.html

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What an absolute jackass!

No kidding. I think that there is a long term bias against blue collar work in this nation, and no one seems to have it worse than the wall street elite.

Chris

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dont worry he'll get his when no one can afforda wallstreet journal subscription because of econimic collapse.

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It is precisely the surrender mentality of fools like this that will give us an economy "like Zimbabwe".

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I don't understand it. Wealth is created by having lots of people do lots of interesting things, from building cars to running Italian resteraunts.

Wall street types seem to think that real welth is on the trading floor, when what is swapped on the trading floor is only a symbol of real wealth.

Chris

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I don't understand it. Wealth is created by having lots of people do lots of interesting things, from building cars to running Italian resteraunts.

Wall street types seem to think that real welth is on the trading floor, when what is swapped on the trading floor is only an illusion of real wealth.

Chris

Fixed.

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Interesting this guy makes the assessment 25 years later that Roger Smith was a genius. Back 25 years ago, Roger Smith was ridiculed for what he was doing. So I suppose if I use the author's logic to this, presuming he'd consider his ideas of what to do with GM today as brilliant, then conversely in 25 years he'd be seen as an idiot.

Do I have this thinking right?

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Interesting this guy makes the assessment 25 years later that Roger Smith was a genius. Back 25 years ago, Roger Smith was ridiculed for what he was doing. So I suppose if I use the author's logic to this, presuming he'd consider his ideas of what to do with GM today as brilliant, then conversely in 25 years he'd be seen as an idiot.

Do I have this thinking right?

Spot on.

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I like this guy and his writing style. He makes some good points, but the short-term ramifications will be quite severe. Sure competitors would come in and replace GM and Ford, but the buffer period will be rough. It is true though that the financial institutions were quite healthy before the meltdown, whereas GM has been limping along for years.

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Anyone praising the actions of Roger Smith is of questionable mental capacity.

The man caused much of the mess GM has been dealing with since his tenure.

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Anyone praising the actions of Roger Smith is of questionable mental capacity.

The man caused much of the mess GM has been dealing with since his tenure.

Oddly, I agree with your assessment.

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Oddly, I agree with your assessment.

Even more oddly, I knew that you would. :AH-HA_wink:

We've discussed the "Clown Prince" of GM management before.

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Remember what I said???

Wall Street will ooze with this kind of logic in order to try and sway the government and citizens. All because Wall Street can make a buck on the back of the little man and at the hands of 300 years of history.

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In 1993, the legendary economist Michael Jensen gave his presidential address to the American Finance Association. Mr. Jensen's presentation included a ranking of which U.S. companies had made the most money-losing investments during the decade of the 1980s. The top two companies on his list were General Motors and Ford, which between them had destroyed $110 billion in capital between 1980 and 1990, according to Mr. Jensen's calculations.

I was a student in Mr. Jensen's business-school class around that time,

Hmmm.... That says a lot.

The definition of sheep? I think so...

Two main arguments are being raised to justify a government rescue of the auto industry. First, large numbers of jobs may be at stake, perhaps as many as three million if one counts all the other firms that supply the Big Three. This greatly overstates the situation. Americans are not going to stop driving cars, and if GM, Ford and Chrysler disappear, other companies will expand to soak up their market share,

Wonder who cut him the check?

adding jobs in the process.

But no where near the 3.5 million that would be lost... But then again, since americans (especially american business men) cannot see past their own noses, that DOESN'T MATTER.

Other arguments are on the table as well. Some see the troubles at GM and Ford as opportunities to retool the auto industry to produce environmentally friendly cars. Given their long track records of lobbying against fuel economy standards and producing oversized gas guzzlers, this suggestion seems ridiculous, sort of like asking cigarette companies to help with cancer research.

Yeah... And they did that to try and shut people like you the hell up, by MAKING A PROFIT!

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No kidding. I think that there is a long term bias against blue collar work in this nation, and no one seems to have it worse than the wall street elite.

Oh, there is... It's a stigma.

Yet these yuppies can't see the forrest for the trees. Without blue collar work and workers, their JOBS will dry up. We're beginning to see that happen. america is too heavy on the people that don't really create anything, they just shuffle the existing (like this guy and most service jobs). That leads to a decrease in spending power (what we're seeing now... Credit has finally surpassed spending power) and ultimately less jobs for the shufflers. You can't service anything if people don't have the money to spend on the services or what needs serviced.

I like this guy and his writing style. He makes some good points, but the short-term ramifications will be quite severe. Sure competitors would come in and replace GM and Ford, but the buffer period will be rough. It is true though that the financial institutions were quite healthy before the meltdown, whereas GM has been limping along for years.

I wouldn't exactly call the 90s, the truck boom, "29%" pins and billions in profit "limping along for years"

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Interesting this guy makes the assessment 25 years later that Roger Smith was a genius. Back 25 years ago, Roger Smith was ridiculed for what he was doing. So I suppose if I use the author's logic to this, presuming he'd consider his ideas of what to do with GM today as brilliant, then conversely in 25 years he'd be seen as an idiot.

Do I have this thinking right?

Yes, you do!

Chris

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Oh, there is... It's a stigma.

Yet these yuppies can't see the forrest for the trees. Without blue collar work and workers, their JOBS will dry up. We're beginning to see that happen. america is too heavy on the people that don't really create anything, they just shuffle the existing (like this guy and most service jobs). That leads to a decrease in spending power (what we're seeing now... Credit has finally surpassed spending power) and ultimately less jobs for the shufflers. You can't service anything if people don't have the money to spend on the services or what needs serviced.

Congrats, you said it about eleventy billion times better than I did...But this puzzles me. It is almost like they need to look down on blue collar workers to find their own self worth.

Chris

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Congrats, you said it about eleventy billion times better than I did...But this puzzles me. It is almost like they need to look down on blue collar workers to find their own self worth.

Chris

Perhaps because they don't really DO anything and feel inadequate about that?

A big part of being 'american' is having the independence and ingenuity to "make your own way"

Most of these yuppies on the street couldn't survive the NYC subways at night, much less be able to ever CREATE or BUILD anything with their own hands in order to "make their own way"

I think they might feel inadequate about that.

But that's just my humble opinion.

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Wow, based on all the sentiment I've been reading in the comments sections of these papers, the only thing I can say to the management and employees at GM is, "good luck - you're gonna need it". Nobody believes in GM anymore. It's truly amazing how horrible the perception of GM actually is in this country. The average person who isn't up on current events (or just doesn't happen to look around when driving) can't see that most of Toyota's current models are actually gas guzzling trucks, and that Toyota has actually followed GM down the path of building fuel inefficient vehicles for the sake of making a lot of money. Yet, they somehow are seen as being more "innovative". What's more, Toyota, Nissan and the rest of the foreign "transplants" were allowed to build factories here through gigantic tax breaks and next to nothing land, through essentially the same processes (lobbying) of strong arming Washington politicians that the Big 3 are using now. But none of these so called "intellectuals" are calling the Japanese companies on it. Never mind the fact that every dollar we send over there gets sent back to us in the form of a "loan" - which we pay back to them at interest.

Moreover, it isn't like GM doesn't build fuel efficient, competitive vehicles. Most of the current vehicles offered by them are not only fuel efficient, but are considered world class in the eyes of the automotive press.

The folklore that America only builds gas guzzling, non-competitive products needs to stop. While I think that Toyota, Nissan and the like build some really good cars, I also think that the Big 3 do as well - but you'd never know that if you didn't bother to read anything current about the industry.

Edited by gmcbob

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No kidding. I think that there is a long term bias against blue collar work in this nation, and no one seems to have it worse than the wall street elite.

Chris

can't say that enough.

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Remember what I said???

Wall Street will ooze with this kind of logic in order to try and sway the government and citizens. All because Wall Street can make a buck on the back of the little man and at the hands of 300 years of history.

wall street is partially behind this, as they want to reduce the automakers to scraps so investors can profit off the sale of the scraps.

all he says all this after this buddies got a 700B injection in funds.

that alone says all you need to know.

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Where is aatbloke when you need him? I've been screaming for 2 or 3 years now that Wall Street builds NOTHING and that a day of reckoning was coming, yet I got sniped at for 'hating' anybody with a degree. No, just accountants and lawyers, who are all a bunch of snake oil salespeople, as far as I am concerned.

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Congrats, you said it about eleventy billion times better than I did...But this puzzles me. It is almost like they need to look down on blue collar workers to find their own self worth.

Chris

I think it also is the east coast-west coast mentality that the fly over states are not worth anything so they don't care about middle America, after all Madison avenue and California infuence everything from design, fashion, entertainment, etc.

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I think it also is the east coast-west coast mentality that the fly over states are not worth anything so they don't care about middle America, after all Madison avenue and California infuence everything from design, fashion, entertainment, etc.

x2

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I saw the headline on the WSJ at the supermarket...

For fear that a intense bloodpressure spike would kill

me I opted to just walk away. I agree with FoG, 66S,

Camino and the rest and add to that:

I'm not a vegetarian, and when Armagedon hits there

will be absolutely NO use for someone as worthless &

unproductive as a stock broker...

So I say we roast this M******er like a stuck pig.

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I'm not a vegetarian, and when Armagedon hits there

will be absolutely NO use for someone as worthless &

unproductive as a stock broker...

So I say we roast this M******er like a stuck pig.

+1

Survival of the fittest man!

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I saw the headline on the WSJ at the supermarket...

For fear that a intense bloodpressure spike would kill

me I opted to just walk away. I agree with FoG, 66S,

Camino and the rest and add to that:

I'm not a vegetarian, and when Armagedon hits there

will be absolutely NO use for someone as worthless &

unproductive as a stock broker...

So I say we roast this M******er like a stuck pig.

LOL Sounds like me! I was at a bookstore in the airport not too long ago and looking for some reading for a 4 hour flight. I had a copy of Consumer's Reports Auto buyers book in my hand. The BF snatched it out of my grip and declared there was no way in hell he was sitting beside me for 4 hours, trapped on a plane while I read that garbage! :P

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Here's the problem that most have with throwing money at this thing:

Where does it end?

Both in terms of monies needed to stop the Detroit 3's slide into oblivion, as well as which industries are 'deserving' of assistance.

I think that GM has had a PR problem they've been in denial about for years. This attitude you see is a direct reflection of that issue, magnified by the economic crisis that's been accelerating

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I saw the headline on the WSJ at the supermarket...

For fear that a intense bloodpressure spike would kill

me I opted to just walk away. I agree with FoG, 66S,

Camino and the rest and add to that:

I'm not a vegetarian, and when Armagedon hits there

will be absolutely NO use for someone as worthless &

unproductive as a stock broker...

So I say we roast this M******er like a stuck pig.

I'll donate the apple...and several cords of nice dry Oak firewood.

Probably going to get banned for saying this, but I'm angry enough to roast the guys wife and kids also. This thing just has me furious. The headline on the Columbus Dispatch (which should be Columbus Cowpatch due to how objective the writing is) was "Carmakers Now Roadkill?"

Everyone seems to be laughing at Detroit. This whole thing kinda reminds me of our sexual mores in the 1950's and 1960's, when a woman was considered "cold" if she didn't give it up and "a slut" if she did.

GM spent 30 years giving us great SUV's, trucks, and RWD cars by the millions, that the American public bought and enjoyed by the millions. Now that car fashions have changed, GM is considered a whore because it gave the American public what it wanted.

Absolutely Unbelieveable. Watch the children of the rich and white collared people suffer when they loose their medical/clerical/insurance/financial services/educational/nursing/or whatever jobs because no one has any money to pay for these services.

It's already starting in the medical field...people are unable to pay their medical bills, so medical professionals are suffering. The whole leveraged/loaned/built on other people's mony thing is going to crash, and the wealthy elite will suffer, weather they live in Cape Cod or Dubai.

Just my rant for Monday.

Chris

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Here's the problem that most have with throwing money at this thing:

Where does it end?

Both in terms of monies needed to stop the Detroit 3's slide into oblivion, as well as which industries are 'deserving' of assistance.

I think that GM has had a PR problem they've been in denial about for years. This attitude you see is a direct reflection of that issue, magnified by the economic crisis that's been accelerating

The problem is that the wheels have been coming off of the whole god-damned thing since perhaps 1973, with the first energy crisis, got worse in the late 1970's (a lot of the problems under Carter were driven by energy prices) and we ignored the problem.

We can debate Unions until we are all living in caves and killing our dinners with primitive muzzle loaders, but real wages started falling under Reagan in the early 1980's and have been falling since.

We ignored all of these financial problems through the recession of '87, the Sand L Crisis etc. of the 80's.

We went to War under Bush 1 to secure energy, but 15 years later we still hadn't learned a Goddamned thing.

Clinton and Gore paid lip service to our energy and finance problems, but in the 1990's we were fat and happy and no one gave a rat's ass about digging our way out.

People want to either blame Bush II or saint him, and at this point he's in office for about 6 more weeks so it really doesn't matter. We've spent 8 more years ignoring things like outsourcing, finance reform, and our energy issues.

Well, 30 years have gone by (give or take) and we still haven't wanted to walk though the front door and deal with 1. outsourcing 2.Energy 3. Banking and finance reform. 4. huge deficits, both government debt and the huge amount of money that has gone overseas to buy energy. The chicken's are now coming home to roost, and it's going to get very ugly and unhappy. The honest to God truth is that it is going to take us 30 more years to dig our ass out of the mess we've spent the last 30 years digging ourselves into.

It may take 10 years for our auto industry to recover, if it ever does. It may take us 20 years to rebuild our energy infrastructure. It may take us 30 years to pay for the wild excesses, caused by both political parties, over the last 30 years.

But I am an optomist. I am 43 now, and I may have another 29 or 30 years left to live. I want to die the owner of a new GM vehicle in 2039. I want to die knowing that my children and grandchildren have a future. I want to die knowing that the next generation has forgiven my generation and the generation before mine for handing them this nation in such terrible shape.

(Chris goes out into the parking lot here at the library to throw a brick through the windshield of a Toyota Sienna, the continues his rant)

It really is a shame. We were handed this nation in pretty good shape 30 years ago by the generation that won WWII, and we haven't been doing much with what we have been given. Everyone in my generation, in one way or another...or maybe almost everyone...should really hang their head in utter shame with what we've let happen to our country.

Sorry boys, I'm furous with what's happening and I just need to rant.

Chris

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Where is aatbloke when you need him? I've been screaming for 2 or 3 years now that Wall Street builds NOTHING and that a day of reckoning was coming, yet I got sniped at for 'hating' anybody with a degree. No, just accountants and lawyers, who are all a bunch of snake oil salespeople, as far as I am concerned.

Carbiz...your problem is that you live in a world of reality. Quit it. Your not being politically correct, and it will make you unpopular in life. I'd suggest taking up lieing out your ass. You will be much happier and much more popular.

A day of reckoning can't come fast enough for Wall Street, IMHO.

Chris :iroc-dragster:

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Absolutely Unbelieveable. Watch the children of the rich and white collared people suffer when they loose their medical/clerical/insurance/financial services/educational/nursing/or whatever jobs because no one has any money to pay for these services.

It's already starting in the medical field...people are unable to pay their medical bills, so medical professionals are suffering. The whole leveraged/loaned/built on other people's mony thing is going to crash, and the wealthy elite will suffer, weather they live in Cape Cod or Dubai.

you couldnt be more right. im a radiologic technologist. my hospital was supposed to see $24 million last year. when it was all said and done we had an income of only 3.5 mil after all the math was done it was figured up that our hospital lost 18.3 million dollars last year. why? people couldnt pay their medical bills. now construction that is currently going on to update the hosptital has been put on hold in the unnecessary areas. spending has been cut which means less up to date equipment and services. also there are rumors of layoffs and skeleton crews running the place. just to give you a picture this hospital was founded in 1905 and operated in the black up until 3 yrs ago.

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Everyone wants to be able to point to the singular source, when the blame rests on the shoulders of a great many. And those who roll in the muck of stereotypes and party affiliations are burying their head in the sand, IMO; no help in identifying or solving the problem whatsoever.

IMO & from my observation, the problem is humanity in general; greed, self-centeredness, lack of community, lack of moral judgement.... lack of what used to be known as humanity, itself. So few truely give a sh!t about their fellow man, anymore; it's always about 'me-me-ME'. And as we continue to cocoon ourselves in digital isolation, we only enable this process.

Politicians in general are more intense versions of this character flaw, because they have power & influence, and many crave it. Look @ Bloomberg- signing into law the ability to run past 2 terms.... it's only for one thing; he hasn't turned any miracles in NYC - it's all about power. Nothing is going to change.

I hold no hope that the next 30 years (or even the next 4) is going to be a clear about-face to swim upstream. The Political River runs far too strong & deep. What this means for the automakers... isn't good, IMO.

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man i love to see those gm fullsizers twisting from those monster torque factories under the hood :lovey:

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Politicians in general are more intense versions of this character flaw, because they have power & influence, and many crave it. Look @ Bloomberg- signing into law the ability to run past 2 terms.... it's only for one thing; he hasn't turned any miracles in NYC - it's all about power. Nothing is going to change.

I hold no hope that the next 30 years (or even the next 4) is going to be a clear about-face to swim upstream. The Political River runs far too strong & deep. What this means for the automakers... isn't good, IMO.

Exactly. It is hard to be a nation governed by "the people" when you need to be a multi-millionare just to be elected.

And as for the lack of community thing, you are dead right. No one seems to care about anyone else anymore, it is all me, me , me.

What this means for the automakes is that they are probably SOL. Even if we do get the 25 billion, we are trying to come from so far behind at this point that it is in many ways a very long shot that they will survive.

Sadly, I didn't think things would be this bad even 12 months ago. I shudder to think at what life might be like if we slip again this much further in the next 12 months.

Chris

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man i love to see those gm fullsizers twisting from those monster torque factories under the hood :lovey:

Yes, even with all the doom and gloom...there are some sources of real, genuine joy in the world.

Chris :iroc-dragster:

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"RWD cars by the millions in last 30 years" Umm, the last 25-30 years were smaller downsized or FWD cars, not the 'muscle cars' or 60's.

Some still forget that #1 car is FWD Camry, and dont get all 'media forced people to buy'

Point is, GM has good cars for sale and all the extremism, such as 'build all muscle cars' or 'import all their cars from Europe isn't going to work.

GM should bring their best new cars to Capitol Hill for test drives and show that they dont just make big gas hogs or outdated designs.

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GM should bring their best new cars to Capitol Hill for test drives and show that they dont just make big gas hogs or outdated designs.

not a bad idea at all because i would dare say 40-50% of the guys in DC couldnt name 5 vehicles GM produces outside of trucks tahoes and vettes.

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Anyone praising the actions of Roger Smith is of questionable mental capacity.

The man caused much of the mess GM has been dealing with since his tenure.

:yes:

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I'll donate the apple...and several cords of nice dry Oak firewood.

Probably going to get banned for saying this, but I'm angry enough to roast the guys wife and kids also. This thing just has me furious. The headline on the Columbus Dispatch (which should be Columbus Cowpatch due to how objective the writing is) was "Carmakers Now Roadkill?"

Everyone seems to be laughing at Detroit. This whole thing kinda reminds me of our sexual mores in the 1950's and 1960's, when a woman was considered "cold" if she didn't give it up and "a slut" if she did.

GM spent 30 years giving us great SUV's, trucks, and RWD cars by the millions, that the American public bought and enjoyed by the millions. Now that car fashions have changed, GM is considered a whore because it gave the American public what it wanted.

Absolutely Unbelieveable. Watch the children of the rich and white collared people suffer when they loose their medical/clerical/insurance/financial services/educational/nursing/or whatever jobs because no one has any money to pay for these services.

It's already starting in the medical field...people are unable to pay their medical bills, so medical professionals are suffering. The whole leveraged/loaned/built on other people's mony thing is going to crash, and the wealthy elite will suffer, weather they live in Cape Cod or Dubai.

Just my rant for Monday.

Chris

Wow, Someone who feels to same way I do. Glad to know I haven't lost my mind...

I take one look at my baby boy and fear for his future......

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The problem is that the wheels have been coming off of the whole god-damned thing since perhaps 1973, with the first energy crisis, got worse in the late 1970's (a lot of the problems under Carter were driven by energy prices) and we ignored the problem.

We can debate Unions until we are all living in caves and killing our dinners with primitive muzzle loaders, but real wages started falling under Reagan in the early 1980's and have been falling since.

We ignored all of these financial problems through the recession of '87, the Sand L Crisis etc. of the 80's.

We went to War under Bush 1 to secure energy, but 15 years later we still hadn't learned a Goddamned thing.

Clinton and Gore paid lip service to our energy and finance problems, but in the 1990's we were fat and happy and no one gave a rat's ass about digging our way out.

People want to either blame Bush II or saint him, and at this point he's in office for about 6 more weeks so it really doesn't matter. We've spent 8 more years ignoring things like outsourcing, finance reform, and our energy issues.

Well, 30 years have gone by (give or take) and we still haven't wanted to walk though the front door and deal with 1. outsourcing 2.Energy 3. Banking and finance reform. 4. huge deficits, both government debt and the huge amount of money that has gone overseas to buy energy. The chicken's are now coming home to roost, and it's going to get very ugly and unhappy. The honest to God truth is that it is going to take us 30 more years to dig our ass out of the mess we've spent the last 30 years digging ourselves into.

It may take 10 years for our auto industry to recover, if it ever does. It may take us 20 years to rebuild our energy infrastructure. It may take us 30 years to pay for the wild excesses, caused by both political parties, over the last 30 years.

But I am an optomist. I am 43 now, and I may have another 29 or 30 years left to live. I want to die the owner of a new GM vehicle in 2039. I want to die knowing that my children and grandchildren have a future. I want to die knowing that the next generation has forgiven my generation and the generation before mine for handing them this nation in such terrible shape.

(Chris goes out into the parking lot here at the library to throw a brick through the windshield of a Toyota Sienna, the continues his rant)

It really is a shame. We were handed this nation in pretty good shape 30 years ago by the generation that won WWII, and we haven't been doing much with what we have been given. Everyone in my generation, in one way or another...or maybe almost everyone...should really hang their head in utter shame with what we've let happen to our country.

Sorry boys, I'm furous with what's happening and I just need to rant.

Chris

Chris, I couldn't agree with you more.....

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Ever since News Corp (Fox News) bought the Wall Street Journal, it has been nothing but trash journalism.

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Ever since News Corp (Fox News) bought the Wall Street Journal, it has been nothing but trash journalism.

This is a huge part of the problem also. the wealthy elites control the news media, and tell us what they want us to hear and what we want to hear, and neither one is the truth.

Chris

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This is being used by the 'true elite class' [rich investors] as a way to break up labor unions, once UAW falls, it will be like dominos. But then they will complain of how hard it is to 'find good help'.

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This is being used by the 'true elite class' [rich investors] as a way to break up labor unions, once UAW falls, it will be like dominos. But then they will complain of how hard it is to 'find good help'.

Ya know...

I was thinking the EXACT same thing today.... You and I must be on the same brainwave.

I was watching a documentary on the 1999 WTO protests in Seattle. That brought to mind the fact that the world really is controlled by the elite at the expense of EVERY society, it's just that america has the farthest to fall. I was thinking to myself, the only two major unions left are the UAW and the Teamsters.

So how much of this, especially the one WTO official that said he would lobby against a Detroit bailout, has to do with breaking the union?

Globalization is winning the fight against the labor movement as it is. But imagine the momentum and victory that would come with a bankrupt Detroit... It could very well spell the beginning of the end for unions and the labor movement entirely. After that happens, nothing short of a global war (Some could say that the financial crisis is the beginning of that -- i.e. the working class has decided to reduce spending greatly) will save us from corporate globalization, if even that can.

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Actually an interesting intellectual counterfactual is "what would have happened had we not bailed out the big financial institutions?"

I think that most buisiness would then have become small. People would operate largely on a local level. And wealth would flow, over a 10 or 20 year period, to a new class of small start up's.

It would be the end of all of this wealth flowing to the elite, and the end of the growing wealth of the 1/2 of 1% at the top.

Which, in my opinion, is why a lot of members of Congress and the president were in such a hurry to bail out the big banks.

Chris

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Quite a bit of honest wisdom in this thread.

That is something to find hope in!

On the negative side, let's not forget how merger-happy we have been for the last few decades. Only the used -car-salesmen of Wall street have benefited from that debacle.

A Wal-mart America is a doomed America.

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Exactly, Camino. We need to change our nation, because we've gone from a nation of creative, responsible individualists to a nation of sheep that shop from and work for the big major mega corporations.

This is why I rarely eat at Appleby's or Burger King, and rarely if ever shop at Wal-Mart.

Chris

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Ya know...

I was thinking the EXACT same thing today.... You and I must be on the same brainwave.

I was watching a documentary on the 1999 WTO protests in Seattle. That brought to mind the fact that the world really is controlled by the elite at the expense of EVERY society, it's just that america has the farthest to fall. I was thinking to myself, the only two major unions left are the UAW and the Teamsters.

So how much of this, especially the one WTO official that said he would lobby against a Detroit bailout, has to do with breaking the union?

Globalization is winning the fight against the labor movement as it is. But imagine the momentum and victory that would come with a bankrupt Detroit... It could very well spell the beginning of the end for unions and the labor movement entirely. After that happens, nothing short of a global war (Some could say that the financial crisis is the beginning of that -- i.e. the working class has decided to reduce spending greatly) will save us from corporate globalization, if even that can.

Five years ago, we Canucks were told that our banks were 'too small' to compete globally and should be allowed to merge to be competitive. The government intervened and said, no. Now, Canada is one of othe few countries whose banks are not seeking bail outs because they are rock solid and did not get involved in costly, leveraged buyouts.

BCE (owners of Bell Canada) is one of the biggest Canadian companies not owned by a foreign power. Two years ago, they penned a huge deal to be bought out by a pension fund and other 'investors,' to the tune of $34b to $54b (depending on who you believe.) The government had concerns and now with the money markets, the deal is in jeopardy. But WTF: who is going to pay for this 'merger??' How will it benefit consumers in Canada? Why does BCE need to be bought out? Well, the answer is pretty clear: it benefits the fat cats on the board, all the brokers (commissions!!) involved in the deal, etc. I may not hold a Phd in accounting, but wouldn't that kind of money be better spent on R&D?

I am really reconsidering my opinions of all this globalizaton talk. It is fairly obvious now that we were sold a bill of goods because one of the benefits pitched to us was that these type of world wide recessions would no longer be possible. REALLY? :scratchchin:

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The world wide recession is upon us...we really need to limit globalization.

Chris

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