Saturday, December 13, 2008

The Auto Maker Mess

I believe we have a chance right now, if it’s not too late, for providing Ford and Chrysler a bridge loan, with a reform structure where they can save themselves. Just throwing TARP money at them, might get the job done, until they can reform themselves, but that is questionable. As for GM, there are signs that they are far more in dire straits from the amount of money they have requested, at least 15 billion I think at one point, and their draconian plan to stop most production for a period of time. And I agree that they cannot be allowed to just fold up and disappear. The small bridge loan to tide them over seems to me not nearly enough to see them through this, even for a short period of time. They are so large and their tentacles reach so far into about every nook and corner of our economy, to let them go under is not an option, imo.

My prediction is at some point the federal gov is going to have to nationalize at least GM for some period of time to prevent them from vanishing. And Cole is right, you can’t screw the retirees out of pensions without it being a national crime. I know the taxpayers made no promises, like it has with the military thru our elected reps to fulfill the constitutional duty of raising and supporting armies, but putting old folks in the poor house is not an option, unless we truly want to return to the 1890’s. Though wingnuts would be tickled pink with that prospect.

We are currently going thru the motions of reviving a dying lifestyle of unlimited prosperity, until we realize that for national survival, we are going to have to make changes at least temporarily to a large degree in the socialist model. Unfettered capitalism is best imo, but without the unfettered part that has brought us to this point. Maybe we will get back to the rational version at some point, but not for some time.

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