Chrysler’s “Thank You” Note

On their corporate blog, Chrysler sent America a big end-of-year Thank You note for the Christmas present, I mean massive welfare check we recently gave them.  “Thank you for investing in Chrysler – America’s Car Company,” they write…yadda, yadda, yadda.  Fortunately, the post is short, so there’s little time to get completely sick to your stomach.  The fun part comes in the comments, where the American public proceeds to complete FLAME Chrysler and rip them a new hole we can pour money into.

Read the post and comments here…

Since our elected representatives completely failed to speak for the people, at least Chrysler had the decency to let the people’s voice be heard!

BTW, Mr. Nardelli, since I have now invested in Chrysler (your words), as an investor I will expect a sweet divident check soon…and as a shareholder, I expect the opportunity to vote for your termination at the next shareholder’s meeting.

Henry Ford on Government Bailouts

Let them fail; let everybody fail! I made my fortune when I had nothing to start with, by myself and my own ideas. Let other people do the same thing. If I lose everything in the collapse of our financial structure, I will start in at the beginning and build it up again.
— Henry Ford, 11 Feb 1934

HT, The Political Inquirer

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Questions on the Economy and the Bailout

OK, I need help understanding the current state of the economy and how the proposed bailout will help make things better.  Once again I freely admit to being an engineer and a theologian, not a politician nor an economist…with that in mind, I have been mulling over the following thoughts and am looking for an education.  Here goes:

First, my summary of the present economic situation:

  1. Both the original and current bailout plans have been all about jump-starting the economy by jump-starting the credit market in one way or another
  2. A major contributor to the economic mess is Americans living well beyond their means and wracking up huge amounts of credit debt (either via ARMs or credit cards) on which many are finding it impossible to make payments (esp. ARMs)
  3. A consequence of the current mess is that creditors are unable to continue lending money (despite the fact that I’m still getting multiple credit card offers in the mail each week)
  4. Since lendors cannot lend, consumers cannot consume…end result, the economy slows

Now, my understanding of the proposed solution:

  1. Dumping $700 billion + into various areas of our financial system will allow banks, etc. to begin offering credit and lending opportunities again
  2. Increased lending and credit will allow consumers to increase spending, reviving the slowed economy

Assuming my understanding of the problem and proposed solution is correct, I have two questions, that I hope someone can answer:

  1. How will extending additional credit to people who are presently unable to pay off the debt they owe provide a long-term fix to the economy?  Won’t this actually make things worse in the long run when they are then unable to make payments on a larger amount of debt?
  2. Philosophically, isn’t the whole idea of economic growth through the encouragement of our citizens to bear increased levels of debt irresponsible and/or immoral, especially given the fact that this crisis was caused or at least worsened by people defaulting on current debts?

I’m having a really hard time understanding how the proposed bailout plan is anything other than a poorly crafted band-aid fix that will ultimately leave us worse off than we are now.  Please, will someone with some economic and political savvy provide understandable answers to my questions?

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Bailing Out the Big 3…Seriously?!

Traditionally, I have intentionally avoided politics here.  With a few exceptions surrounding the Olympics this summer, I have chosen to write almost exclusively on other topics…but things in Washington are getting so absolutely out of control, I am compelled to vent.

In case you haven’t been paying attention, Mr. Paulson decided earlier this week that he was wrong about those sectors of the financial world that initially needed our $700 billion, deciding on a new course of action with (at least) the same price tag.  Whatever.  Granted I’m far from an expert on these matters (I only took a year each of college-level Economics classes and Political Science), I’m sure I’m not the only one with absolutely zero confidence that anyone on Capitol Hill has any semblance of an idea of how to really fix the economy, at home or world-wide.

So far, however, I’ve managed to keep my rantings to myself…until now.

This proposed (and no doubt desperately lobbied for) plan to funnel $25 billion to the troubled “Big 3” automakers is absolutely, positively one giant leap toward the establishment of a worker’s paradise here in the United States.  For years a major drain on the profitability of the Big 3 has been the vast sums of money going to support their unions and union workers.  Now I certainly do not want to see big corporations creating unsafe working conditions and unfair pay for anyone…but it’s about time we get real and recognize that in today’s society, nobody is going to go to work for pay and benefits that they deem unacceptable.  Argue all you want, it just isnt’ going to happen.  And it isn’t like the UAW and others are managing to get pay and benefits for their people that are just barely survivable.  The medical benefits afforded many of these workers is better than my current company, better than I will have as a civil servant, and just about comparable to what I get on active duty in the military–and even in Detroit, factory workers aren’t getting shot at as much as U.S. troops are!

This nonsense was summed up well by the Fearsome Pirate Comrade today when he wrote:

You realize what the bailout for the auto industry is, right? The American taxpayers are now subsidizing the unions–you work and pay taxes so that people with better benefits than you can continue to receive them. The new message to the unions is now, “Drive your employer into the ground? No problem, we’ll make the taxpayers make up the difference!”

Amen, Comrade, amen.  I’m certain my Congressman (Ron Paul) isn’t going to give the go-ahead for this continued slip toward the People’s Democratic Republic of America…but others need to get on the phone and tell their elected representatives (who work for YOU by the way) to stop the nonsense!

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