Comments on: Failure: For Our Future

By: On Liberaltarianism » The HPRgument

On Liberaltarianism » The HPRgument — Sat, 20 Feb 2010 22:58:08 +0000

[...] auto bailout is a good case in point. Will loathes it. He thinks that letting the automakers fail would be an act of “creative destruction” [...]

By: coloradoone

coloradoone — Wed, 21 Oct 2009 16:59:52 +0000

This is truly shocking data. ....people who make more struggle less to pay housing costs, while people who make less struggle more.USAToday is such an insightful new agency. We are lucky to have them around...no one would have ever been able to surmise the in depth insight and analysis that they continue to give us on the daily basis.
Of course the reason for this struggling is that we live in a consumer driven society in which consumption is king. Buy more than you can afford, you can have it all, keep the masses poor through the encouragement of consumption. It all harkens back to George Oewell's "Brave New World".
Summit County real estate listings

By: chrysler parts

chrysler parts — Thu, 23 Apr 2009 03:30:55 +0000

That bail out just when to last year dept for sure. Auto industry sales last year are negative. When the government gave a bailout its good for nothing. I feel bad for the people that are making the cars that have been layoff.

By: Random Wilmington thoughts « The Droning Inquisition

Random Wilmington thoughts « The Droning Inquisition — Thu, 29 Jan 2009 06:50:45 +0000

[...] Even so, it’s better than listening to Will Wilkinson, a libertarian political pundit, go on about economic turmoil is a good thing and that people just have to appreciate the true, inerrant wisdom [...]

By: patrick stephens at psjs.net » Detroit

patrick stephens at psjs.net » Detroit — Fri, 12 Dec 2008 19:06:37 +0000

[...] Will Wilkinson has a really excellent post up on the Detroit bailout. There is nothing that helps people more than high rates of economic growth, compounding, compounding. But everyone is not helped equally. Economic growth requires dynamism, requires “creative destruction,” and some people get trapped in the wreckage, become wreckage. Not everyone is hurt equally. That irks. We should do what we can to limit downside risk consistent with the goal of producing broad prosperity. And we should feel a pang for those whose expectations are disappointed, whose lives turn out harder than they’d hoped. But the impulse to freeze the system, to try to tape all the cracks and staple all the cleavages, to ensure that nobody has to explain to their kid why Christmas this year is going to be a lousy Christmas, that is one of our greatest dangers. Our sympathy, untutored by a grasp of the larger scheme, can perversely make itself ever more necessary. When we feel compelled to act on our uncoached fellow-feeling, next year’s Christmas is likely to turn a bit worse for everybody. And then somebody has to explain to the kids that they can’t find a job at all. Businesses that would get started don’t get started, wealth that would be created isn’t. And in just a few decades, the prevailing standard of living is much, much lower than it could have been had our sympathy been more far-seeing. There is no justice, and great harm, in diminishing the whole array of future opportunity to save a few people now from a regrettable fate. [...]

By: Philk

Philk — Fri, 05 Dec 2008 17:56:43 +0000

There is one comment by Stu that we make computers in the U.S .
Most PC's are probably made in China.
I was working on DEC servers 10 years ago and I'm almost certain
they had a sticker that said “Assembled in China” on them.

By: Philk

Philk — Fri, 05 Dec 2008 17:44:18 +0000

As the U.S is turned into a third world multicultural country it will be less able to compete with the asians and europeans.
Educational standards have declined in the U.S since immigration policies changed
in 1965 to favor third world countries.
Since then the U.S has gone from ranking about 2 to ranking about 23.
The U.S originally limited immigration only from northern europe.
Those are the people who created all the inventions and industries that made the U.S what it was before it started it's decline in 1965.

By: webgrrl

webgrrl — Mon, 17 Nov 2008 17:02:49 +0000

Robert, in the USA we have had several large employee-owned companies that are/were relatively successful. Avis was probably the best known. So yes, it's legal, and yes this has been done before here and even in a related sector involving cars. Please take that rope section and yank sideways . . .1. . .2. . .3!

By: Robert

Robert — Mon, 17 Nov 2008 15:56:37 +0000

I'm ready to close this argument too, but do you really end up giving GM — and Ford too? — to the UAW? Are these reasonable suggestions? Is it legally, constitutionally possible? Do you nationalize these industries first and then gift-wrap them for the UAW? Does the UAW want GM? And for the Germans, didn't they just spend a lot of money to get away from Chrysler? I know very little about the UAW but I do know about Italian unions, and actually they would not be at all against becoming entrepreneurs (not a good word, I know, but I don't know exactly how to define the concept), but only in a fixed system. In other words, with special concessions, tax breaks, monopolies or access to public funding that would make their activity unassailable. I suspect the UAW, if we are talking about anything remotely realistic, would take GM under the same conditions — namely, no more free market, no competition just guarantees, privileges and political control. So welcome to Italy. We tried to sell our airline, Alitalia, to the French, but with the help of the unions that deal fell through. Now we are trying to pay Italian banks/industrialists to take it over and it's still not clear if even that's going to work. Many years ago we could have sold Alfa Romeo to Ford, but, true to form, we ended up paying Fiat to take it. The result: the erosion of our manufacturing base (no other car manufacturer has ever opened a factory in Italy and Fiat itself has all but moved out) and a public debt, a good part of it created by the 1 million € loss per day of Alitalia, that has spiralled beyond all control. Be careful what you wish for.

By: ish

ish — Mon, 17 Nov 2008 14:31:30 +0000

Thank you Jason, for making the point I've been trying to make in a much-less successful way in other posts. A mere 4 years ago the Japanese and German automakers were clamoring to make full-size trucks and SUVs just like the ones created in the US. A big part of what has caused these problems is a major shift in consumer demand which has affected all automakers in the world. It has affected the big 3 more because they were more invested in that product mix. That is a poor management decision. But Toyota is in major trouble as well, primarily due to declining sales of large trucks in the US market. Sound familiar?

By: Some Guy

Some Guy — Mon, 17 Nov 2008 13:46:42 +0000

I did not intend to provide a detailed argument that the German model cannot work here.

I very much doubt that we can emulate the Germans hook-line-and-sinker. Germany is Germany. It has an entirely different set of economic institutions, economic culture, demographics, eductation system, tax structure, geography, corporate laws, etc. I am surprised that anyone would need this point elucidated.

Similarly, I could not emulate Babe Ruth's success by taking up all his habits. I would simply be a fat, untalented, wanna-be baseball player with lung problems and a wife in divorce court.

Further I would not want to fully emulate Germay, even if we could. Perhaps the German car industry is currently more successful that the US car industry. So what? That success comes at a price and it might not be a price worth paying. Indeed, I would not want to pay it.

Personally, I've been to Germany and I don't want to live there. Do you? (If you are not living in Germany, I guess that the answer is no.)

By: Jason O.

Jason O. — Mon, 17 Nov 2008 13:33:29 +0000

1) The US auto industry, in late '07/early '08, signed a new UAW
contract that removes all of the healthcare and other post
employment benefits from their balance sheets and into a trust
(called a VEBA, or voluntary employee beneficiary association) that is
managed by the UAW.

2) Every auto analyst declared at that time that GM, F and C, with the VEBA, reached labor cost parity with Japanese, German and Korean automakers. The WSJ, et al described the UAW's agreement to the VEBA as a fundamental change in US labor relations. Low interest loans to US OEMs would not be a UAW bailout...the current contract has already solved this problem.

3) Also at that time, GM's share price was in the 20's: Deutsche Bank (the same firm that last Monday set a $0 target price on GM's stock) set a target price of $48 and praised GM's management for devising a method to get out of providing healthcare/pension benefits for hundreds of thousands of retirees and current employees.

This price target of $48 was set less than one year ago.

4) What happened? in 2007, about 16.5 million vehicles were sold in
North America. In 2008, the number will be about 11 million. Every automaker is experiencing 25%+ decreases in units sold. This drop in demand is close to unprecedented, i.e., the credit crunch is hitting "main street." The claim that "GM and F should make cars that people want to buy" is disingenuous.

Don't believe me? Believe this guy: "This environment is more severe than anything we have ever experienced," said Mitsuo Kinoshita, Toyota's executive vice-president, who added that profits were likely to remain at depressed levels next year as a result of weak US demand. "Honestly, it is difficult to foresee when it will bottom out."

By: stu

stu — Mon, 17 Nov 2008 13:27:05 +0000

One assumption in this thread that has gone unchallenged is that the manufacturing base of the USA has been seriously eroded. This is simply wrong! In real dollar terms we manufacture more product now than we did 20 years ago. What has happened is that we have,through gains in productivity, produced more with less labour imput. Also the nature of our manufacturing has evolved with the more productive, like computers, replacing the more labor intense, such as textiles. Do you think its healthier assembling computers or to work at a spinning machine? Who do you think has the more pleasant work environment and better income? That's what happens with “creative destruction”.

By: Sandmich

Sandmich — Mon, 17 Nov 2008 13:05:29 +0000

I've of the opinion that GM is probably making the best cars that it has in its entire existence, but the labor, business, and environmental regulations (some of which are of their own making) are stacked against it. At least a chapter 11 will clear some of that out, and might encourage lawmakers to create a more hospitable environment for the businesses that come out of bankruptcy.

But, no bankruptcy, no fixes, and we'll be back giving them another bailout in five or so years.

By: James M

James M — Mon, 17 Nov 2008 13:01:14 +0000

“Do you still have that Yankee know-how to combat Germany, Japan, and just wait, China in car production? Is this a battle you can win? The British have lost, and it might not be winnable anymore.”

To be fair, instead of efficiently building cars that people liked and wanted to buy, Britain in the 60s and 70s tried bail-outs and state-ownership and state-sponsored mergers of failing car companies, culminating in the fantastic British Leyland, supported by the taxpayer rather than customers. On the other hand, foreign car companies did manage to create an environment in Britain (eg, Japanese car companies in Sunderland) where quite reasonable cars could be made and turn a profit. “Intelligent” policy makers in Washington might be well-advised to check historical examples abroad carefully before jumping into action. It took a long time before the British Government was finally free of Leyland (and other failing industries).