May 03, 2009
It Depends on the Meaning of Big
Now that the restructuring plans are in place, I think we can safely dispense with idea that the government has bailed out General Motors and Chrysler. The One has done nothing more than pay off the United Auto Workers.
The deals prove beyond any doubt for me that the expression "Too Big To Fail," is not an economic evaluation but a political one. Big refers not to economic scope but the scope of political influence and the scale of campaign contributions.
I'm going to do something I have never done before - I am going to give you all free investment advice. With the caveat that this advice is likely worth exactly what you've paid for it
If you have any stock or investment fund that holds stock in Ford, sell it now. How successful do you think Ford can be when the organization with which they have to negotiate their labor costs is a majority stock holder in one of their main domestic competitors and holds a significant ownership position in the other?
And once the Democrats pass the Card Check bill (F you very much Mr. Specter) the writing will be on the wall for Toyota, Honda and any other transplant automaker building cars in the U.S. with non-union labor.
Here's my prediction, and I don't feel like I'm going out on a limb, Chrysler will fail before GM. But they will both fail.
What they will not do is die and go away. They will be propped up with treasury money and supported with massive government subsidies while carefully crafted regulations will handcuff their competitors.
The One and his Congress will see to it that the only cars that are economically viable for most Americas are the type of cars made by GM and Chrysler. This is how the government will control what type of vehicles are manufactured. And they will call it a free market!
We'll all be driving some manufacturers version of a hybrid K Car.
The deals prove beyond any doubt for me that the expression "Too Big To Fail," is not an economic evaluation but a political one. Big refers not to economic scope but the scope of political influence and the scale of campaign contributions.
I'm going to do something I have never done before - I am going to give you all free investment advice. With the caveat that this advice is likely worth exactly what you've paid for it
If you have any stock or investment fund that holds stock in Ford, sell it now. How successful do you think Ford can be when the organization with which they have to negotiate their labor costs is a majority stock holder in one of their main domestic competitors and holds a significant ownership position in the other?
And once the Democrats pass the Card Check bill (F you very much Mr. Specter) the writing will be on the wall for Toyota, Honda and any other transplant automaker building cars in the U.S. with non-union labor.
Here's my prediction, and I don't feel like I'm going out on a limb, Chrysler will fail before GM. But they will both fail.
What they will not do is die and go away. They will be propped up with treasury money and supported with massive government subsidies while carefully crafted regulations will handcuff their competitors.
The One and his Congress will see to it that the only cars that are economically viable for most Americas are the type of cars made by GM and Chrysler. This is how the government will control what type of vehicles are manufactured. And they will call it a free market!
We'll all be driving some manufacturers version of a hybrid K Car.
Posted by: Stephen Macklin at 06:33 AM | Comments (2) | Add Comment
1
I hate to say it; but this may be true, "This is how the government will control what type of vehicles are manufactured. And they will call it a free market!"
Posted by: T F Stern at May 04, 2009 07:45 AM (Ruh11)
2
If The One can say this with a straight face anything is possible:
And we launched a housing plan that has already contributed to a spike in the number of homeowners who are refinancing their mortgages, which is the equivalent of another tax cut.
Particularly when any savings from refinancing is the result of a lower interest rate - which means a smaller mortgage interest deduction, which means a higher tax bill!
And we launched a housing plan that has already contributed to a spike in the number of homeowners who are refinancing their mortgages, which is the equivalent of another tax cut.
Particularly when any savings from refinancing is the result of a lower interest rate - which means a smaller mortgage interest deduction, which means a higher tax bill!
Posted by: Stephen Macklin at May 04, 2009 07:11 PM (R7LgM)
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