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Special Report
Big Three Weekend at Bernie's
(Page 2 of 2)
This reveals what is really involved in the auto "bailout." It is more even than the government taking over the car companies from management and stockholders. It is the environmentalists taking over the car companies from consumers. In the current market system, it is consumers and their preferences that really run the car companies. That is the market the car companies currently produce for. But under the bailout nationalization, the car companies will be producing for their new masters, the government, which means politically the environmentalists.
This will be Obama's first big blow against the living standards of America's middle class. Obama campaigned on rebuilding the middle class. But he really believes along with the rest of the Left, including especially the environmentalists, that Americans overconsume the world's resources, and that overconsumption must be brought down. That is what Obama said when he let out during the campaign:
Today, Americans drive big, beautiful, spacious, powerful cars, actually chariots of the Gods, beyond anything ancient mythologists could have ever dreamed of. But the plan is now to take that away from us. Our standard of living here is to be radically dumbed down, as we are forced into weak, little, politically correct vehicles, that we can drive 40 miles before we have to plug them in again -- at least on days when there is no blackout because environmentalists have also shut down the coal fired plants that produce half our nation's electricity.
Wake up, the nationalization of the car companies is an environmentalist dream. The enviros are not ever going to want to give that up. They don't care if that requires permanent taxpayer subsidies. No cost is too great to bring about social justice. That is why this nationalization will not be temporary.
Union Vampires
Auto management is getting an unfair rap today. The car companies are not failing because of bad management practices, or excessive bureaucracy, dealerships, or product lines, or production of the big, beautiful, powerful cars Americans want, rather than the cramped, weak, little toys they don't want. GM produces and sells three fourths of its cars overseas, serving markets where smaller, cheaper cars are preferred, and makes good profits doing it. Ford at least is heading in the same direction.
But they can't do the same in the U.S., in part because the market for such cars is not there, but also because with the fixed costs imposed on them by the United Auto Workers (UAW), they can't produce and sell such cars at a profit. Where auto management did blunder was in not standing up to outrageous UAW demands years ago, which have now added up to average costs in wages and benefits of $75 dollars an hour, or $150,000 a year, per worker.
This is what has now driven these companies effectively out of business. The Union vampires have sucked the blood out of the auto industry, as they did the steel industry, and so much of American manufacturing. Given the brain dead, long outdated, leftist ideology that dominates old union thinking, this is the effect of American unions today on company after company.
Don't blame the workers. They naturally want to make as much money as they can, as everyone else does, and I only want as much prosperity for them as possible. But when overgrasping union demands cause a loss of jobs, and eventually drive the companies out of business, the workers are not benefited. They are the victims of bad, shortsighted union leaders, just as the shareholders are the victims when shortsighted management fails to look out for their long-term interests.
But with the auto companies now effectively nationalized, don't look for union givebacks. The union vampire leadership will now just look to suck the blood out of taxpayers. The Democrat party owned by these unions is not going to make demands on them. It is going to kowtow to union demands instead, and just pass the cost on to taxpayers. This is another reason why the auto nationalization bill for taxpayers is going to be perpetual, not temporary.
Just as the companies under the nationalization bailout will have lost control over their product design and production, their management personnel, and their financing, they will also have lost control over their labor relations and policies. The response to union demands will no longer be decided by management. The unions will take their demands to their Democrat allies in Congress, who will just get their auto czars and czarinas on the phone, and insist on social justice.
Weekend at Bernie's
In the 1989 movie Weekend at Bernie's, two young corporate execs inform their company's boss Bernie Lomax that they have discovered a serious financial error on the company's books. Bernie responds as if he is delighted, and invites them to a weekend of hot parties and hotter babes at his beach house, where he secretly plans to kill them to keep the error from being revealed. But Bernie is also having an affair with the girlfriend of his mafia partner, who has Bernie killed at the beach house before the young execs get there. When the young execs arrive and discover Bernie is dead, they don't want to be deprived of their partying. So they carry the dead body around for the weekend holding him up and waving his arms around in greetings to make him appear to still be alive.
This is what the federal government is now going to try to do with the automakers in their nationalization bailout. The automakers were already in extremis, and unlikely to survive. But now as their business is turned into a political football, and they lose control over it to political special interests, economic survival is a hopeless lost cause. The environmentalists and the unions are going to try to carry Bernie around for a while to fool the taxpayers, so that they can party on. But Bernie will be dead.
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Mike| 12.10.08 @ 6:34AM
Call me crazy, but I would rather take a chance on a new vehicle built by a company reorganizing under chapter 11 than a new Lada.
Jason| 12.10.08 @ 8:14AM
Say hello to fascism...American style.
Fascism: Strict regulation and control of the economy through some form of corporatist planning in which the legal forms of private ownership of industry are nominally preserved but in which both workers and capitalists are obliged to submit their plans and objectives to the most detailed state regulation and extensive wage and price controls.
http://rightklik.blogspot.com/
dgdc| 12.10.08 @ 8:24AM
With highway bills, forign wars, etc the government has been subsidizing big oil and gas guzzlers for years. It's a bad idea but subsidizing fuel sippers will cost less than the trillions Bush spent in the middle east and all the other tax money spent to keep cheap oil flowing.
Pecos Pete| 12.10.08 @ 8:25AM
Been here before: Amtrak and the Post Office.
I wonder when the gubmint will start designing and building homes? Oh wait, we've done that before too.
Education and Health Care must be on the agenda too. Oops, done that, been there.
What's left? Oil and gas industry? Banks? Agriculture? Infrastructure build-outs? What's that you say? Oh, were already doing those too.
Small business (one or two employees) better watch out. Big brother is headed your way soon.
dnicholson| 12.10.08 @ 9:05AM
What the liberals and their pals in the enviro movement need to hear when they trot out the "America uses 25% of the worlds resources" line is "yes we do, and we also produce 33 % of the worlds goods because we are the most efficient producers of all time." And without that efficiency the world would be worse off. The one thing that the left can't stand are facts.
Jim Woodward| 12.10.08 @ 11:34AM
Any one remember British Leyland ?
Pat| 12.10.08 @ 12:25PM
Of course the Big 3 bailout is political, what else could it be? And it's not like we can make a business case for keeping domestic automakers on permanent life support. So lacking any business rationalization, it can only be done for political reasons.
And look at the rationalizations pouring out of the Big 3 and Detroit's media for confirmation of this political angle. No sincere admission of mistakes made in the past, no conscious recognition it's not 1965 anymore. The primary reasons given for a bailout, loss of jobs if the Big 3 fold, millions of them. And to hear the Detroit Free Press spin the story, once a 22 year old autoworker loses his job after GM folds, he will never work again - probably his children will never find work in their lifetimes.
Then there's "you gave Wall St. a bailout, why not us" - 7 & 8 year old brothers use this type of "it's not fair" argument. Another talking point is to wave the flag, "we were the arsenal of democracy in WWII."
But the unspoken clincher of an argument is that Detroit is economically "helpless" and the aftermath of a GM/Chrysler failure will be very ugly. The SE Michigan economy isn't diversified, the workforce is composed of either overpaid, unskilled workers or manager/technical types trained in a moribund corp. culture. Obama hasn't spoken the opening lines of his First Act yet and he can't afford to allow Detroit to self-destruct while the media looks on.
Joe B| 12.10.08 @ 1:19PM
Registered Republicans should adopt a highly disciplined boycott of all products made by quasi nationalized companies like GM being run or overseen by the Federal Govt. It's like volunteering to pay a scoundrel support tax, and it invites further socialism.
Dean M. Vander Linde| 12.10.08 @ 1:27PM
The Big Three will never learn from history. They made Faustian bargains with the UAW to prevent strikes; now they are about to make more with the federal government.
Anthony| 12.10.08 @ 1:32PM
Never again will I ever cast aspersions on hookers and prostitutes who make their money the hard way. At least it's the johns who do the begging, not the other way around. Watching and listening to the Big 3 Ex's perform a perverted form of oral sex on members of congress was as sickening a sight, as perhaps watching the new auto czar, Barney Frank, do the same to co-czar, Chris Dodd. I'm glad my diminished portfolio doesn't contain any auto stocks, because I'd hate to think that I would have participated in paying these whores for their services. Hey guys! the taint of Chapter 11 doesn't even come close to watching you repeat servicing members of congress orally, on a quarterly basis. And you can't even do a Clinton, and join the mile high club, now that your corporate jets are booted. As the old saying goes, what you are has already been established, the only question is for how much. Well, billions are a lot, and you can wrap yourselves in the cloak of doing it for a greater purpose, but you're still what you are, corporate sluts. Now, one of you get me a scotch and a cigarette.
Marc Jeric| 12.10.08 @ 7:00PM
Bravo, Anthony! I was going to comment on this auto bailout socialist farce, but after reading your comment I desisted. No way that I could improve on your wise words.
betterred| 12.10.08 @ 9:40PM
anyone who thinks the big 3 has a chance should visit a union plant and watch what really goes on..
There is no way( in any stretch of the imagination) that a union plant can be competitive with non-union.
AND here's a stat that explains this.
In 2007 GM and Toyota produced the same amount of cars roughly 9.5 million, GM posted a lose of 38 billion and Toyota posted a PROFIT of17 billion. case closed
baseballguy2001| 12.10.08 @ 10:00PM
Will anyone PLEASE believe me now? Our current President has done much more harm than good. Because of his liberal policies, he has exiled conservatives to the deep dark woods for a long time.
Robert Rosencrans| 1.3.09 @ 9:26AM
As the political elite in the U.S. Congress remain convinced they are the universal band aid for any problem that springs up, much destruction has been left in the wake of the fixers from Washington, D.C.
Everything the political elite throw their dangerous blanket of doom over with their smug and ill thought out plans withers and dies.
The alleged Great Society was the blueprint of destruction for many communities and the atom of the nucleus family, yet the rocket scientists in D.C. continue to launch one failed social program after another, followed by one failed economic program after another.
Now that the public has rejected the cars made by the former Big 3, now only a tattered shadow of their former selves, Washington remains convinced that they can save what the public has rejected.
There is no logic left in Washington, D.C. and little in the way of common sense.
All of us should invent companies based on social sound bites Washington loves to hear. Then we can produce useless products nobody wants, all the while waiting for a bail out from inside the beltway.
You see, if the public rejects something that is being produced no one can save the companies that make those products. It goes against all reason and all business sense and all common sense to do so.
But those little issues have never stopped the politically elite from squandering taxpayer funds.
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