Economics

What Fresh Day-Old Bailout Hell Is This? $15 Billion for Automakers, a Car Czar, and a Ford Festiva in Every Pot

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Officials struck an agreement in principle on the measure Tuesday and hoped to finalize it and schedule swift House and Senate votes as early as Wednesday. Money could be disbursed within days to cash-starved General Motors Corp. and Chrysler LLC, while Ford Motor Co.—which has said it has enough liquidity to stay afloat—would be eligible for federal aid.

All three would have to negotiate with labor unions, creditors and others and submit blueprints by March 31 to an industry czar named by President George W. Bush showing how they would restructure to ensure their survival. If not, the emergency loans would be revoked, the companies cut off from further federal help, and the government overseer could order his own overhaul, including forcing them into bankruptcy.

There are still "obstacles," by which I mean a few legislators, mostly senators who have the ability to hold stuff up, whether out of principle or partisanship, who might just put the brakes on the bailout. And then there's the no-show threat in the World's Greatest Deliberative Body. Says the AP: "Getting 60 votes for an agreement, with many senators expected to be absent for the emergency, postelection debate, could be tricky."

And then there's Michigan Democrat Sen. Carl Levin who, in a football season in which his Detroit Lions are winless, resorts to football analogies that would make make Knut Rockne trade in his Model A: "This gets us to the 20-yard line, but getting over the goal line will take a major effort, particularly in the Senate."

Quick question: Are you on your own 20, senator? Or your opponent's danger zone red zone[*]? And by opponents, I mean the American taxpayers and pretty much the whole free enterprise system. Hayek, Mises, Schumpeter—suit up and hold that line!

More here.

[*]: Yes, I meant red zone. Apologies to Kenny Loggins. And apologies for Kenny Loggins.

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  1. And to continue the football analogy, we need these fuckers sacked and taken out with career ending injuries. This is in referral towards anyone who honestly or otherwise thinks this continued bailout, sky is falling bullshit action course is an even remotely decent idea.

    FAIL DAMNIT! Let them fail so a new, improved model/group/idea may take their place. And I don’t mean just Automobile companies either.

  2. Revoked? HAHAHAHAHAHAHAHAHAHA!!! Never happen cuz we need Azteks and Festivas. I predict about two weeks before the March deadline another bailout.

  3. an industry czar named by President George W. Bush

    He’s the steaming pile of shit that keeps on giving!

  4. careful with the austrians and sports. they lost to the Faroe Islands back in the 90s. And drew with them recently (they did perfect the “run away and hide” defense against Germany in April of 94, too!)

    and careful with them and predictions into the future. they don’t roll that way

  5. I’d love to know why some board of government appointees could do a better job overseeing an auto manufacturer.

    Danger zone, Nick? This isn’t Top Gun. It’s called the red zone now.

  6. I’m in danger of becoming a furious little cinnamon bun over this shit.

    http://www.youtube.com/watch?v=wBDbsG8C_qA

  7. Though I’m not a sports fan, and maybe I’m a little oblivious, but I’ve noticed you have dropping more sports references and metaphors in your posts. I think this really makes for much punchier copy – and while I always enjoy your writing, I enjoy it more so with nice creative flourishes like that.

  8. Too the “let ’em fail” crowd…how much is it going to cost the US taxpayer, due to the broad social safety net (unemployment, PBGC, Medicaid/Medicare, etc. etc.) that’s in place, when they do fail?

    Something tells me far more than $15B.

  9. Or your opponent’s danger zone?

    I think you mean the *red* zone…”the danger zone” is where Kenny Loggins sang about going in that Tom Cruise movie about those gay fighter pilots…

  10. Can someone lay out the ways in which this basic federal restructuring of the US auto industry is different from the restructuring that would have happened had the car makers simply gone into bankruptcy? Are the constraints put on the car makers likely to be looser or tighter than what would have emerged from the court system? It feels like it’ll be easier to game the system (with guys like Levin on your side), but on the other hand many pols will be looking at opinion polls as this all plays out in public.

    Also, Chrysler LLC is obtained by a private equity firm named Cerberus? Seriously?

  11. they did perfect the “run away and hide” defense against Germany in April of 94, too

    I thought that was ’38.

  12. Whoops, joke name.

  13. “Let them fail so a new, improved model/group/idea may take their place.”

    Yes, like the heavily government protected and subsidized Japanese auto companies which are winning the market right now!

  14. MP,

    Too the “let ’em fail” crowd…

    So the answer is to let the car companies blackmail us with the possibly larger cost to the social safety net to agreeing to a constant round of bailouts?

    Your question is better at exposing the ridiculously padded nature of our social safety net than some oversight on our part.

  15. I miss Crow-Eating Dumbass.

  16. Do we taxpayers at least get equity, ala Conrail, or a perpetual wallet sucking, ala Amtrak?

  17. We’ve talked about just about every possible angle of the bailout controversy, I want to talk about a different aspect of the US car makers’ failure.

    Everybody talks about their cost of production and unions and health care and their big bet on SUV’s and everything else, but what I can’t figure out about their failure is this: Why are GM, Ford and Chrysler cars so ugly, stupid-looking and cheap-looking compared to European and Japanese cars?

    I would assume [and maybe this is where I’m wrong] that design/appearance should be a relatively easy part of the process to fix. Didn’t the Japanese basically just steal design ideas from the Germans, back in the day? Why can’t we do that? How hard is it to hire some designers who don’t come up with designs that look like concept art from Idiocracy?

    The US car makers lost the “top half” of their middle class market based just as much on the fact that their cars are fucking ugly as they did based on quality deficiencies. That may be why even when they got on the ball in quality terms their customers never came back.

  18. All three would have to negotiate with labor unions, creditors and others and submit blueprints by March 31 to an industry czar named by President George W. Bush showing how they would restructure to ensure their survival.

    Really? The Democratic Congress will agree to let Bush appoint the czar and let that person stay on after January 20th?

  19. Oh, come on, they’re getting better. Look at the Mustang. Or the Malibu.

  20. Officials struck an agreement in principle on the measure Tuesday and hoped to finalize it and schedule swift House and Senate votes as early as Wednesday.

    There’s nothing the least bit principled about any of these bailouts.

    Rephrase, Nick?

  21. SugarFree said:

    Your question is better at exposing the ridiculously padded nature of our social safety net than some oversight on our part.

    It is what it is. Ignoring the realities of the existing social safety net is foolish. We may wish it wasn’t there, but it is, and thus policy choices have to account for this.

    So yes, let them blackmail us. Do we really have a choice? And then, the freedom lovers out there can trumpet the bailout as blackmail and maybe create some more negative public opinion regarding the existing social safety net. And maybe (but unlikely, given existing attitudes) you can accomplish some rollback of the social safety net in the future, pointing to this blackmail as a reason for the rollback.

    But until that happens, rejecting the bailout on principle alone is shortsighted and completely ducks the reality of the existing predicament.

  22. Something tells me far more than $15B.

    Unless you did some actual research followed by some actual math, that something is just your preconceptions.

  23. MP,

    Since no one in power sees me as anything but an open wallet, I’ll stick with my principles. The bailout’s going to happen either way. I refuse to endorse a stupid thing that going to happen anyway.

  24. joe == look at the Pontiac Aztek. But only briefly, before your retinas are permanently scarred.

    Granted, the Mustang looks hot. And the Chysler 300C or the Magnum wagon version of it. But Toyota and Honda don’t have ANY hideously ugly vehicles because they’re — well — competent.

  25. The best argument against buying an American car is having had owned one.

    I think plenty of foreign cars are ugly and cheap-looking, but American cars have ugly, cheap-looking and probably doesn’t work worth a shit to contend with in the marketplace. It’s a high hurdle to get your balls comfortably over.

  26. I miss Crow-Eating Dumbass.

    By the way, MNG, what was the bet (and who was it with) that led to you adopting that name? I never got the full story.

  27. Yeah, but the Aztek is unusual.

    It’s like they took a Vega, and put it on top of another Vega.

    Camrys used to be boring, ugly cars. Now they look cool, though. They’ve got that little nose wrinkle down the middle of the hood, like an American muscle car or a 1970s BMW.

  28. Mike Laursen said:

    Unless you did some actual research followed by some actual math, that something is just your preconceptions.

    You mean like this study (PDF), which shows a two-year price tag of bankruptcy at over $65B?

  29. Design is one of the strengths of the American auto industry.The factor in Japanese design that moves product is blandness.A lot of car buyers prefer to drive non-descript models such as the Toyota Camry.

  30. You mean like this study (PDF), which shows a two-year price tag of bankruptcy at over $65B?

    Funny numbers. An executive summary doesn’t show me enough of the methodology to assess the accuracy of the $65B. But seeing as how they explicitly assume 2 of the 3 would end in a Chapter 7 liquidation, I think that’s enough to call BS on their numbers.

  31. MP, Even granting the accuracy of your study, better spending $65B within the imperfect system we’ve got than changing the rules of the game, now and forever, for the worse.

  32. I’m sure that T has a much better handle on what the real social safety net costs of not bailing out the auto industry would be. Feel free to enlighten us.

  33. I don’t know, SIV. That snub-nosed design for the Civic that came out a couple years ago is pretty cool.

    Strange to drive for the first time, though. You can’t see the front of your car from the driver’s seat.

  34. “changing the rules”

    Are you kidding? The rules are quite clear. The people of this country expect the government to fix the economy. They don’t really care about trivial details such as national debt accumulation, moral hazard, and government interventionism. They want something done. For pete’s sake, they just elected a overwhelming Democratic majority, and you think that this bailout is “changing the rules”?

    These rules have been in play since 1932. This bailout is the norm, not the exception.

  35. MP,

    If you love the bailout so much, why don’t you just go marry it?

  36. Design is one of the strengths of the American auto industry.The factor in Japanese design that moves product is blandness.A lot of car buyers prefer to drive non-descript models such as the Toyota Camry.

    If bland design like the Camry or the Accord gets people to abandon American cars for Japanese cars, it does not seem correct to claim that design is a strength of American firms.

    The point of design is not to give car magazines something to write about or to appeal to the somewhat limited Pimp My Ride market. It’s to “move product”. I’d rather drive a 10 year old Volvo than a new Cadillac, because if I drove a new Cadillac someone might think I was on my way to the Grammy Awards or maybe the Tyra Banks show or something, and I’m NOT on my way to the Grammy Awards, ya know?

  37. and I’m NOT on my way to the Grammy Awards, ya know?

    Going to diss on the Grammys, huh? What would everyone on here think if I told them about your Daytime Emmy?

  38. SugarFree,

    At least I’m not so pussywhipped by being married my principles that I can’t get clear of the fog of my passionate love to see the real world as it is instead of as I’d like it to be.

  39. BTW, the discussion about the BankAmerica / Republic Windows debacle below brings up one more bailout point I’d like to make:

    BankAmerica is now basically being told that they have no right to cut off credit to a failing company, because they took bailout funds.

    Who wants to bet that when the car makers present restructuring plans that involve closing plants and terminating workers, they will be told that the fact that they took bailout funds means they aren’t allowed to terminate any workers or close any plants? Hmmmm?

    Barack the Jackass will turn up and say, “The taxpayers provided bailout funds to save jobs during these troubled times blah blah blah blah” and that will be that.

  40. OK so now the question is what happens in a few months when the handout runs out? Peopel will still not be buying cars, then what? More hand outs?

    jess
    http://www.Ultimate-Anonymity.com

  41. The last Big 2.5 auto that I drove was a rental. It sucked big time. My 200sx with 130K on it, out performed the brand new piece of shit that was cranked out by the Detroit bandits.

  42. MP,

    Assuming you’re not just being a troll…

    Why is it so necessary for libertarians to support the bailout? It’s already happening. You’ve already got what you want. Are you just looking for a kowtow? We disagree… why is it necessary for us to agree with you?

  43. Yes, like the heavily government protected and subsidized Japanese auto companies which are winning the market right now!

    If the nation of Japan wants to hurt itself just as a favor to the American consumer, I am all in.

  44. Something tells me far more than $15B.

    Of course. GM alone has a burn rate in excess of $15B a year, and they ain’t making it into the black anytime soon.

  45. Uh, dudes, the Mustang is a rehash of 60’s design. The best Ford and the others (with the upcoming Charger, etc.) could do was go retro. Not exactly original. And considering the fucking Mustang has a solid rear axle, fuck Ford. You want me to buy your cheap muscle car, how about making one that can actually, you know, handle?

    if I drove a new Cadillac someone might think I was on my way to the Grammy Awards or maybe the Tyra Banks show or something

    The Escalade is out, dude. I’m not sure what’s replaced it yet. Maybe I need to go to the Emmys or the Golden Globes to see what second-rate celebrities are driving up in.

  46. Why are GM, Ford and Chrysler cars so ugly, stupid-looking and cheap-looking compared to European and Japanese cars?

    I guess I should preface this with de gustibus, but for Chrysler, the Sebring/Stratus line, and the 300M/300C line both look pretty good to me*.

    * – disclaimer. I drive a 2005 Sebring LTD.

  47. And to continue the football analogy, we need these fuckers sacked and taken out with career ending injuries.

    Where have you gone Lawrence Taylor? A nation turns its lonely eyes to you.

  48. the only thing I really don’t like about american cars is all the dinging and beeping and lack of control they give the driver. you cannot turn off the headlights on most cars, the car beeps at you when the seatbelt isn’t buckled, and you cannot turn off the traction control. i realize these can be adjusted, but not on a rental, and they, well, piss me off.

  49. Look…. what happened to the Japanese and German auto industries that allowed them to take over large chunks of the American market? Wasn’t there one specific time period that led directly to this situation? Rhymes with “Furled Whore hoo-hoo”…

    Therefore, my idea is to carpet bomb all of Michigan down to a fine grade of rubble. In fifty years they’ll be producing cars even the Japanese and Germans want to own.

  50. No need to bomb, SF. Just wait a couple more years and Michigan will rubblefy itself.

  51. I guess I should preface this with de gustibus, but for Chrysler, the Sebring/Stratus line, and the 300M/300C line both look pretty good to me

    The 300 looks pretty good but I rented one recently in Vegas, and they are underpowered (the standard version), the handling is so-so, and it’s unimpressive across the board.

    disclaimer. I drive a 2005 Sebring LTD

    You are the gayest Objectivist since gay came to Gaytown.

  52. SugarFree,

    It’s not necessary for libertarians to support the bailout. It’s necessary for libertarians to recognize the consequences of not doing the bailout, and to openly discuss those consequences and present a reasonable argument as to why those consequences are preferable to a bailout solution.

    I just don’t feel that I’ve seen that discussion. There’s a lot of talk about the social effects of allowing nature to take its course, but there seems to be very little discussion coming from libertarians of the fiscal effects. Which is odd considering that a root crux of the libertarian argument is a refusal to use “our money” to prop up these failing corporations.

    Libertarians need to recognize and respond to the social safety net costs of big business failure beyond simply a stand on principle. Because those costs are the reality. Arguing that you don’t want to spend $15B, but you’re perfectly willing to spend $70B, seems rather silly to me.

    And if the costs won’t be $70B, then argue why they won’t be. Don’t avoid the topic altogether.

  53. Where have you gone Lawrence Taylor? A nation turns its lonely eyes to you.

    *Ahem* – as a Redskins fan, I am not amused.

  54. Rhymes with “Furled Whore hoo-hoo”…

    what do whores an hoohoos have to do with bombing detroit? is it legalized prostitution in japan that makes their cars better? i think i’m missing something…

  55. You are the gayest Objectivist since gay came to Gaytown.

    “You know you’re like the A-bomb, everyone’s laughing having a good time and you show up BOOM! Everything’s dead!”

  56. I saw a two seat sports car last summer with a Chrysler badge and thought that it was a cool looking car. So I went to look it up. It was smaller, heavier, with substantially poorer peformance and a substantially higher price tag than my 350Z.

    This roadster had a mid-30s price tag. So this is not a case of not being able to put out an economy car at a reasonable price due to union contracts. The Big 2.5 don’t appear to be able to compete in any price range.

    Fuck’em!

  57. Fair enough, MP.

    But that has already been answered upthread. A one-time cost of 70Bn vs. 15Bn here and 34Bn there for far into the foreseeable future is a no-brainer for me.

    Just because one thief wants $5 and the other wants $15 doesn’t mean it’s somehow an intellectual failure to object to thievery in principle. Nor is it rational to pony of the $5 if history tells you he’s just going to rob you again tomorrow and the day after and the day after…

  58. Is there really going to be anyone who wants to puchase a car made by the equivalent of Amtrak?

    It’s bad enough having your car made by a UAW member, when it’s made by a federal government employee…

  59. Episiarch.

    You are the gayest Objectivist since gay came to Gaytown.

    You are going to get censured by the Log Cabin Objectivists if you keep on hatin’ like that.

  60. Come on SugarFree, say it with me:

    Robbers rob people and thieves just steal. There’s a difference.

  61. the crossfire, kinnath? disaster of a car, from experience, it’s about the same car as the 350z (about the same weight, size, and power) but has these obnoxious columns in the back that make going in reverse or changing lanes hazardous. Huge blindspot with that one, blindspots are bad.

  62. “Smells like friggin’ exhaust in here. You know why I had car wash people put cocoa butter smell in there? Because I want prostitutes to feel welcome. I don’t want them to feel like it’s a death trap.”

  63. It’s bad enough having your car made by a UAW member, when it’s made by a federal government employee…

    Since the UAW has once again been saved from actual competition from the federal government, I fail to see the distinction.

  64. You are going to get censured by the Log Cabin Objectivists if you keep on hatin’ like that.

    A ith A, sweetie.

  65. But Toyota and Honda don’t have ANY hideously ugly vehicles

    Honda Element, Toyota Prius

    I rest my case.

  66. None shall fail.

  67. MP, I’ve been to the former soviet union and china many times, and I can attest that government involvement in the production of consumer goods has catestrophic consequences.

    It’s better to pay every soon-to-be unemployed UAW worker to sit on his or her butt for the rest of his or her life, than let the government take equity positions in the financial and production sectors.

  68. Robbers rob people and thieves just steal. There’s a difference.

    OK, Semantic Sally.

  69. I talked to someone on what it’s going to take to fix the auto industry:

    “e said that the hobbit, that turns the crank case is depressed, and needs therapy. We need to get us a new hobbit. They’s from the land beyond time, land beyond time’s also gonna hook us up with a unicorn for the radiator, I aint even gonna tell you bout that haunted air condition. Then that air filter, that’s made of plutonium, that’s gonna require superman, so, you know, plus shipping from krypton. Then the cow, Jumped over the moon.”

  70. the crossfire, kinnath?

    Yup, that was it. Looked nice until I read the spec sheet. Must be a dog.

  71. You are going to get censured by the Log Cabin Objectivists if you keep on hatin’ like that.

    They can take it up with Dave Willis and Matt Maiellaro. Possibly Dana Snyder.

    “Well I got rid of my teeth at a young age, because I’m straight. Teeth are for gay people. That’s why fairies come and get ’em.”

  72. Yeah, the Crossfire did not last too long. I guess I now know the reason.

  73. Oh, come on, they’re getting better. Look at the Mustang. Or the Malibu.

    The problem is that neither Mustangs and Malibus (which are in different classes from each other) are still not competing with a BMW 3 series or an Acura. (Malibu is more of a answer to the civic/accord) I agree with Fluffy that the 30K-50K sedan market has been totally ceeded to foreign competition (and most of these cars are indeed made overseas). Of the top of my head, the closest these days is something like a Cadillac CTS/XTS, which I understand are pretty decent cars, and don’t think are doing all that bad in sales, but they also have considerable incentives (I think) that are cutting into the bottom line

  74. I’ll repeat: the Mustang has a solid rear axle. So Ford’s groovy retro sports car handles like a truck. Brilliant move, Ford. Brilliant. I’ll take a Mitsubishi Evo instead, thanks. I saw Jeremey Clarkson tripod one of those driving with one finger.

  75. A one-time cost of 70Bn

    That’s a two-year cost. Probably harder to project much beyond that, but needless to say, the costs wouldn’t be capped at $70B.

    Nor is it rational to pony of the $5 if history tells you he’s just going to rob you again tomorrow and the day after and the day after.

    It is rational if you structure, as part of your plan to pony up $5, a plan to begin dismantling the system that has forced your hand.

    That’s where I see libertarians playing this wrong. They should be coming up with a plan that both deals with the short term situation maps out goals for a longer term set of policy changes that will remove the leverage that the Big 2.5 has over Washington.

    I realize that no such plan would ever be adopted. But that’s not relevant. What’s necessary is to come up with pragmatic plans that both deal with reality as is and then leverage that reality to drive longer-term policy that lines up better with your principles.

    Being simplistic and simply shouting “We hate bailouts!” will not win any arguments because it ignores reality.

  76. The only horripilation I feel over the passing of the Big Three is the lonely ache that would erupt in my heart at the possibility The Great Ford/Chevy Truck Debate might never be settled.

  77. It’s better to pay every soon-to-be unemployed UAW worker to sit on his or her butt for the rest of his or her life, than let the government take equity positions in the financial and production sectors.

    Then make that your policy proposal. Show why the long term consequences of that proposal have fiscal benefits that outweigh the bailout proposal.

    That’s not what libertarians are presently doing. They’re so wound up in “OMG SOCIALISM!” that they aren’t presenting a real policy plan that leads the country out of this mess.

  78. *Ahem* – as a Redskins fan, I am not amused.

    So am I, but it was *twenty three* years ago, dude. Heck 9-11 jokes aren’t all that tasteless anymore.

  79. Au contraire, MP. Shouting “We hate bailouts” puts us in line with 60-plus percent of our fellow citizens, a strange place for libertarians. Shouting “We hate bailouts” will win a lot of arguments right about now.
    I’m sure CATO can and will trot out some white paper showing a better policy plan. And who will read it?

  80. (I’m using French in solidarity with the Log Cabin Objectivists.)

  81. Being simplistic and simply shouting “We hate bailouts!” will not win any arguments because it ignores reality.

    but it’s still okay to shout that, right?

    while I’m in the echo chamber, BAILOUTS SUCK HAIRY NUTSACKS!

    I’m on the internet, pragmatism is overrated. However, MP, you’re right about the reality, but ranting and yelling is all that can be done right now. (and all i want to do)

  82. (ot dead equine pugilism squad practice)

    To wit, TAO, Nutrasweet just openned another thread with a Challenger joke, and that happened two months later.

  83. Show why the long term consequences of that proposal have fiscal benefits that outweigh the bailout proposal.

    First and foremost, the long term consequences of the bailout are SOCIAL not financial. It doesn’t take a complicated analysis to show that once the government starts bailing out one industry, it will be on the hook to constantly bailout all industries.

    While it is not likely that we’re going to devolve into a new USSR, we are clearly on the path to becoming another france or germany where the government takes a subtantial role in determining the course of pretty much all major industries. And I know this is what a lot of Americans would like to see, but I am not one of them.

  84. [MNG:] Yes, like the heavily government protected and subsidized Japanese auto companies which are winning the market right now!

    [Fluffy:] Why are GM, Ford and Chrysler cars so ugly, stupid-looking and cheap-looking compared to European and Japanese cars?

    [SIV:] The factor in Japanese design that moves product is blandness.

    [TAO:] If the nation of Japan wants to hurt itself just as a favor to the American consumer, I am all in.

    [SF:] Look…. what happened to the Japanese and German auto industries that allowed them to take over large chunks of the American market?

    I would like to take this opportunity to remind everyone that the South Korean auto industry isn’t chopped liver; it’s currently the fifth-largest auto producer.

  85. kinnath,

    As much as you like to decry France and Germany, we are far, far closer to their model than to a laissez-faire model. The differences become more and more minute each day, but it’s not like it’s night and day now.

    And BTW, the government started bailing out industries a long, long time ago. We’re not seeing some sort of seismic shift here. This is simply status quo.

    That doesn’t mean you should give up. It just means you shouldn’t treat this bailout event as some sort of outrageous new ground. It’s simply SSDD.

    And Citizen Nothing,

    I suspect if you presented the average citizen with two choices, $15B or $70B, they’d pick the $15B option. That’s the debate on the Hill right now.

  86. That’s not what libertarians are presently doing. They’re so wound up in “OMG SOCIALISM!” that they aren’t presenting a real policy plan that leads the country out of this mess.

    You treading on dangerous ground here, MP, actually asking people to come up with solutions…

  87. As much as you like to decry France and Germany, we are far, far closer to their model than to a laissez-faire model. The differences become more and more minute each day, but it’s not like it’s night and day now.

    That’s not an argument to justify making us less different.

    And BTW, the government started bailing out industries a long, long time ago. We’re not seeing some sort of seismic shift here. This is simply status quo.

    And I was vehemently opposed to the first Chrysler bailout.


  88. The 300 looks pretty good but I rented one recently….

    Rental fleet stripped models do a lot to discourage sales of domestic autos.

  89. Yes, like the heavily government protected and subsidized Japanese auto companies which are winning the market right now!

    The Japanese government is subsidizing Toyota, Honda and Nissan so Americans can find work in Alabama and N.C. making cars Americans want that are a better value than domestics?

    Thank’s Japanese government.

  90. I mean individual sales.

  91. “Can someone lay out the ways in which this basic federal restructuring of the US auto industry is different from the restructuring that would have happened had the car makers simply gone into bankruptcy?”

    The execs get to keep their jobs. That’s about it.

  92. Don Mynack,

    You forgot: The UAW doesn’t have to renegotiate contracts that might be disadvantageous to them.

  93. You treading on dangerous ground here, MP, actually asking people to come up with solutions.

    What’s wrong with presenting, as a solution, letting the automakers fail?

  94. Honda Element, Toyota Prius

    I rest my case.

    Actually, I think the design of the Prius was a master stroke of marketing.

    The first people to see the Prius did not think, “Wow what an ugly car!” They thought, “Wow, I guess it looks that way because it’s a hybrid.” The design was just different enough and distinctive enough that it became fixed in the public mind as the way a hybrid “should” look. Ask a six year old to draw a hybrid and he’ll draw a Prius.

  95. Too, simple, A.O.
    The American people demand complexity!

  96. Ask a six year old to draw a hybrid and he’ll draw a Prius.

    Or a griffin.

  97. What’s wrong with presenting, as a solution, letting the automakers fail?,

    Because that two-bit “solution” doesn’t address the issue of dealing with the post-failure fiscal costs imposed on the US social safety net.

  98. From Wikipedia: Carlos Ghosn, is a French-Brazilian-Lebanese businessman. He is the current CEO and President of Renault of France and Nissan of Japan. He is largely credited with turning around Nissan.

    There really aren’t any strictly American, Japanese, German, or whatever car manufacturors anymore. GM builds in Canada, Ford builds in Mexico. The only new plants in the US are “foreign”.

    Mr. Ghosn made a valiant attempt (that scared the shit out of me as a Nissan owner) to create a multi-national entity with GM to procure components for automobiles. And I believe it was GM that told him to pound sand (much to my great relief).

    Failing businesses, like the Big 2.5, need to fail so that their assests can be reallocated to some other entity that will use them better.

    Car manufacturing will not dissappear from the US if the Big 2.5 go bankrupt.

  99. The design was just different enough and distinctive enough that it became fixed in the public mind as the way a hybrid “should” look

    Actually, Fluffy, it’s more than that. As we all know from South Park, people want other people to know they bought a hybrid, so the distinctiveness–even if it is ugly–is a feature, not a bug. Smug clouds take the shape of a Prius.

  100. I would like to take this opportunity to remind everyone that the South Korean auto industry isn’t chopped liver; it’s currently the fifth-largest auto producer.

    Assuming the Japanese learned from the Bis 2.5 mistakes (Big 3 before the Japanese onslaught), Toyota and Honda are looking over their shoulders at nimble South Korean competitors with labor costs advantages.

    Bringin up the rear is TaTa motors of India with a friggin’ huge labor cost advantage.

  101. Because that two-bit “solution” doesn’t address the issue of dealing with the post-failure fiscal costs imposed on the US social safety net.

    I’m willing to chip in few bucks to buy a lifetime supply of dog food for the unemployed UAW workers. No reason to let them starve.

  102. Because that two-bit “solution” doesn’t address the issue of dealing with the post-failure fiscal costs imposed on the US social safety net.

    So, we have to stagnate the economy because we have a social-safety net?

    Do you do this same analysis with immigration and gay marriage?

    You’re forgetting the immeasurable opportunity costs on the American people: thousands of dollars more for inferior cars. That’s per customer.

    What are the costs of that?

  103. Bringin up the rear is TaTa motors of India with a friggin’ huge labor cost advantage.

    Deep government oversight of the Big 2.5 is only going to open the door for China.

    The Big 2.5 are deadmen walking.

  104. MP,

    Well, recognizing that this bailout will cost far more than $15 billion would be a good start to such a discussion.

  105. Indeed, the oppurtunity costs associated with this bailout are likely going to be enormous and unpredictable in both size and specifics.

  106. MP – there are more opportunity costs than that:

    We are tying up capital in inefficient businesses, which is just going to lead the children of current auto workers to rely on the government to give them jobs when they grow up in Detroit, instead of going to college or getting into an industry that actually makes money.

    It’s like bailing out the family farm: it keeps kids working on the family farm instead of them escaping that inefficient farm, which just breeds a whole new generation of welfare beggars.

  107. I always just figured that function designed the Prius. Wheel-well covers and the exaggerated wedge shape lower the slip-drag coefficient to compensate for the relative lack of available horsepower. Also power seems to dictate the design of the rest of the vehicle to lower curb weight. It’s not ugly for ugly’s sake, it just wound up looking like that.

    Having driven a Prius (a friend got one as a rental after a car accident), they handle tolerably well for a small front-wheel drive car and possess fairly well laid out interior. And the trunk room is amazing. Two cut up adults would easily fit in there.

    I don’t think I’d own one yet. I think the small car Hybrid idea would be better used in a little sporty type car (i.e. make it look like a cool small car instead of a shitty small car.) A Hybrid Mini with the option to turn off the battery drive for gas engine fun would fly off the lots. (Yes, I know that’s silly.)

  108. What’s wrong with presenting, as a solution, letting the automakers fail?

    Nothing – it’s just that you ought to present an argument why it’s less expensive to the taxpayer. Or explain how you will eliminate welfare costs that result.

  109. TAO,

    Well, it would likely be far better to pay the very short term social safety net costs than to pay the medium and long term oppurtunity costs of the bail out. Governments are notoriously bad at spotting the innovative and their efforts to direct the economy tend to force out alternatives before the perferred option has proven itself in a competitive market.

  110. So, we have to stagnate the economy because we have a social-safety net?

    Yes. In fact, one could argue that we have a stagnant economy at times because we have a social safety net. In fact, if one was to make that argument, and show how much economic growth might exist if the netting was stripped away, one could make an argument against the bailout and have a policy plan to avoid future bailouts.

    Well, recognizing that this bailout will cost far more than $15 billion would be a good start to such a discussion.

    Sure. Look, I’m not arguing for a bailout. I’m arguing that the discussion around the bailout needs to expand beyond the purely ideological one that libertarians seem to be stuck in. The reality is that a cost/benefit argument is what’s going to win the day here, because most anti-bailout individuals are focused on the $$$, not the ideology.

  111. It may not be less expensive to the American taxpayer if you are merely weighing bailout money against social services.

    But that just means that you are holding the entire American economy hostage because we offer a safety net. Like I said, it is just like the immigration debate: we cannot allow free movement (or a free economy) because we have social services.

    And you should know more than any one that the opportunity costs are (by definition) going to outweigh the bailout.

  112. So, we have to stagnate the economy because we have a social-safety net?

    I wish we didn’t, but there you have it. Unless you think you can get rid of the safety net…

  113. so pragmatically, lets say I am in need of a new car (which I am), how can I use this apocalyptic auto manufacturer scenario to my best advantage?

    There has to be a way someone like me can get a quality automobile for a song. (or a silly dance, don’t care)

  114. domoarrigato,

    I would assume that not adopting a bailout is the less costly option medium and long term, all things being equal.

  115. Unless you think you can get rid of the safety net…

    Dump a million formerly-high-paid workers on to the system that is funded primarily by people that make a lot less than the UAW workers. Then you’ll actually see some political motivation to restructure the safety net.

  116. MP,

    The reality is that a cost/benefit argument is what’s going to win the day here, because most anti-bailout individuals are focused on the $$$, not the ideology.

    And from what we know historically about the nature of government planning (and those are the waters we have entered here) the better option is to let them fail.

    If I have to choose between a social safety net and a planned economy, I choose the former by default.

  117. But that just means that you are holding the entire American economy hostage because we offer a safety net. Like I said, it is just like the immigration debate: we cannot allow free movement (or a free economy) because we have social services.

    If I had a magic libertarian switch – I’d fix it all at one go. But there is political will out there – and saying “you people whose jobs are fucked don’t deserve them anyway – and BTW we are kicking you off the dole to teach you a lesson” might be your preferred answer, but it ain’t gonna happen.

    Doesn’t mean making the argument that we should do that is wrong – just kind of futile. Given the political climate that we both know exists, what is the most libertarian solution feasible?

  118. There has to be a way someone like me can get a quality automobile for a song. (or a silly dance, don’t care)

    Everyone has stock sitting on the lot. Dealers are paying interest on the loans they take out to buy the stock from the manufacturors. The manufacturors have stock sitting in storage that the dealers won’t take.

    If you have reasonable credit, you can get a fine car from any non-Big-2.5 dealer.

  119. kinnath,

    Of course, some large segment of that pool would be hired by those companies able to ride through the economic turbulence.

  120. If bland design like the Camry or the Accord gets people to abandon American cars for Japanese cars, it does not seem correct to claim that design is a strength of American firms.

    As the owner of 2 Fords currently, and having owned Hondas in the past, design is only part of the picture. Build quality is a much bigger issue. I’ll take a bland looking car as long as I don’t have to drag it to the dealer every other month.

    I bought the Fords mostly for safety and utility, but also price, since japanese cars were just out of my budget at the time and I bought the first Ford during their first fire sale, like the ones they’re having again. I basically bought at cost. I drive the Five Hundred (which is now the new Taurus) and the wife has the Freestyle, which is basically the wagon version.

    Design-wise, the same guy who designed the previous gen Passat did the 500. Which is why it looks like a Passat on steroids, but I like those lines. But, the 500’s tranny is already giving me trouble at 36K miles and the front end has been an unending calliope of clanks, wheezes, grunts, squeaks, boinks and clunks. The car has decent features for a 2005 model, but again, I bought it as it’s a tank in terms of safety and that’s the #1 issue for this Dad.

    The 2007 Freestyle has a CVT tranny, which while sounding like the world is coming to an end under acceleration, is pretty smooth operation. I actually like that car better and the front end is much better noise-wise. Not too many problems with it and we bought it used, 1 year old, at a steep discount (Fords are way overpriced compared to the better built competition).

    Needless to say, while I don’t *hate* my 500, it’s underwhelming in terms of build quality. I’ll replace it with a Honda or Hyundai when the time comes, though the Infiniti’s are very sweet. My old boss has an M35 and I got a semi-woody just from riding in it. Very. Nice.

  121. Dump a million formerly-high-paid workers on to the system that is funded primarily by people that make a lot less than the UAW workers.

    A possibility that neither party will accept.

    And FWIW, dumping hundreds of thousands of high financial service workers hasn’t done much to put it in the headlines.

  122. In the immediate moment, it would be cheaper for me to pay 1000 dollars to someone who threatens to kill me.

    It is certainly going to cost me more in the medium- and long-range, because he is just going to come back and shake me down.

    Given the political climate that we both know exists, what is the most libertarian solution feasible?

    Put them on the dole. The opportunity costs MUST, by definition, outweigh the bailout costs.

  123. Of course, some large segment of that pool would be hired by those companies able to ride through the economic turbulence.

    You would think that would be obvious.

    What the UAW is bitching about is that its members would need to take about a 50% cut in compensation to find one of these alternative jobs.

    So the bailout is not really to protect jobs, but to protect the existing compensation levels of the UAW.

  124. I always just figured that function designed the Prius. Wheel-well covers and the exaggerated wedge shape lower the slip-drag coefficient to compensate for the relative lack of available horsepower. Also power seems to dictate the design of the rest of the vehicle to lower curb weight. It’s not ugly for ugly’s sake, it just wound up looking like that.

    Check out the 2009 Honda Insight. Look familiar?

  125. lets say I am in need of a new car (which I am), how can I use this apocalyptic auto manufacturer scenario to my best advantage?

    Solly Cholly, you have some “libertarians” who think it’s OK to prop up artificially high prices.

  126. Ah, strike that link, it’s for the concept. This is the better link.

  127. Put them on the dole. The opportunity costs MUST, by definition, outweigh the bailout costs.

    why do you say this? BTW, I happen to agree that the auto bailout is a terrible idea. But I am against it on principle, not on an economic argument

  128. why do you say this?

    If people wanted to funnel their money and “reward” the Big 3 for making superior products, they would have already.

    The fact that the Big Three are failing is evidence enough that forcefully allocating resources to them that people did not voluntarily allocate to them will incur opportunity costs greater than 15b.

  129. In the immediate moment, it would be cheaper for me to pay 1000 dollars to someone who threatens to kill me.

    Same as how it might be the smart thing to do to pay up (in a survival sense) – I might try and fight instead.

  130. The fact that the Big Three are failing is evidence enough that forcefully allocating resources to them that people did not voluntarily allocate to them will incur opportunity costs greater than 15b.

    But why 15 bn? what if the number was 5bn? how is the right hand side of your inequality determined?

  131. JW,

    Yikes. I think I like the Prius better. The Insight looks like Honda took a minivan and had The Tall Man shrink it down into a high-gravity slave dwarf.

  132. That Honda Insight is such a rip-off of the Prius. I guess that look is locked in stone for the foreseeable future.

  133. Look…. what happened to the Japanese and German auto industries that allowed them to take over large chunks of the American market? Wasn’t there one specific time period that led directly to this situation? Rhymes with “Furled Whore hoo-hoo”…

    Therefore, my idea is to carpet bomb all of Michigan down to a fine grade of rubble. In fifty years they’ll be producing cars even the Japanese and Germans want to own.

    We all quickly have forgot who built the war machine during the world wars…
    If it weren’t for the Detroit big 3 we’d all be saluting either a swastika or a rising sun flag on our flag poles.

    The time has come when we don’t need unions anymore, we have worker comp, unemployment which I’m sure the autoworkers use when needed.

    Detroit needs an overhaul no doubt but let’s not throw the baby out with the bathwater

  134. New Bailout Plan: Rather than “a Festiva in every pot”, whaddaya say we put pot in every Festiva? Sales would go through the roof!

  135. You mean like this study (PDF), which shows a two-year price tag of bankruptcy at over $65B?

    Very good. You came up with something more substantial than “something tells me”. I withdraw my criticism.

  136. Now, for extra credit, look around for some studies or information that challenge your beliefs.

  137. Todd-

    Please, we were never in danger of saluting the swastika or the rising sun. Don’t tell me that you buy that sordid statist propaganda.

  138. I suspect if you presented the average citizen with two choices, $15B or $70B, they’d pick the $15B option.

    And if you think that’s actually the choice…

    $15 BILLION is barely enough to get then through to Inauguration Day.

  139. That Honda Insight is such a rip-off of the Prius. I guess that look is locked in stone for the foreseeable future.

    Considering how Honda only sold a couple thousand of the old and ugly(er) Insight, I cant’t say that I blame them too much.

  140. Yikes. I think I like the Prius better. The Insight looks like Honda took a minivan and had The Tall Man shrink it down into a high-gravity slave dwarf.

    I liked the design of the concept better, but I’m guessing that LED headlights aren’t quite there yet. It mostly looks like a Civic with a tall ass.

    At least they put the dashboard back in front of the driver. That’s one of the things I can’t stand about the Prius; the other being the the smug cloud that was mentioned.

  141. I think that TAO is right to look at the long term opportunity costs.

  142. BTW-

    Congress is not obligated to fund social safety net programs like social security. Thus, any analysis that excludes the possibility that our solons just might decide to chuck some of the welfare programs is an incomplete analysis. We should also not exclude the possibility that we will just not have the scratch to subsidize the parasites.

  143. the sad thing is the festiva is far and away the best car ford ever made. it got 450 miles to the gallon or so, it cost something like $6000, it could be parked in a motorcycle spot, it was so boxy it was actually roomy inside unlike current subcompacts, it did really well in a crash because it might have had some real steel in it rather than just aluminum, and the back seat folded all the way down flat so you could shag in the back in what was essentially a double bed. why did they stop making it? or why not just bring it back? if i could buy a brand new festiva i would switch in a heartbeat.

  144. “The opportunity costs MUST, by definition, outweigh the bailout costs.”

    By definition he says.

    TAO you don’t know what the fuck you are talking about. In other news, dog bites man.

  145. Honda Element, Toyota Prius

    I rest my case.

    A guy I shoot with drives an Element. While it’s not a good looking vehicle, it’s not designed to be. The form is a result of the function. Interior-wise, that little box has enough room to fit three guys, and all of their gear for just about any sport/activity you can think of. It’s completely modular and extremely easy to modify the internal to whatever configuration you need. I believe that much of the interior is also waterproof, so you can spray it out with a hose. On top of that, it gets decent gas mileage.

  146. Libertarians need to recognize and respond to the social safety net costs of big business failure beyond simply a stand on principle. Because those costs are the reality. Arguing that you don’t want to spend $15B, but you’re perfectly willing to spend $70B, seems rather silly to me.

    Let’s assume your numbers are correct. Why are you convinced that spending $15B will avoid the $70B cost of a bankruptcy? I’ve seen nothing in the auto industry plan that indicates a path to profitability.

    So the question for you is why you want to spend $85B ($15B bailout + $70B in social safety net costs) rather than $70B?

  147. Whattup amigos?

    Man, I, like, completely agree with sebs about the Festiva. Mine’s great for time with the ladies, but the cost of keeping it running means I’ve had to spend my weed money on car parts.

    Weak.

  148. “Why are you convinced that spending $15B will avoid the $70B cost of a bankruptcy?”

    Why are you convinced it will not? I mean, we got money back with interest when we bailed out Chrysler in 79 and they actually rebounded for a while. Libertarians, wedded to the axioms of classical economic theory but not empiricism it sometimes seem think that it cannot work because it violates the premises of such theory, but the world has proven itself more complex than can be captured by classical economic theory. Professional economists have left that stuff behind a while ago.

  149. The bailout passes. The American automakers become profitable again. They pay back the money with interest. No parts of the social safety net are strained at all.

    That’s at least POSSIBLE. Stranger things have happened economically.

  150. Look…. what happened to the Japanese and German auto industries that allowed them to take over large chunks of the American market? Wasn’t there one specific time period that led directly to this situation? Rhymes with “Furled Whore hoo-hoo”…

    Therefore, my idea is to carpet bomb all of Michigan down to a fine grade of rubble.

    Broken window fallacy. Having all your infrastructure blown to bits does NOT help a corporation’s bottom line. At all.

    It might have something more to do with the Germans and Japanese being fucking motivated to build good cars so they could have a better standard of living, while the UAW and the Big Three coasted, thinking the good times would roll on forever, and “hey, get a laugh outta that stupid little toy car Honda 600 with the 600cc motorcycle engine, those clowns will never be a threat to us.”

    You might want to give J sub D a heads-up if you prevail with the carpet-bombing thing, though.

  151. The bailout passes. The American automakers become profitable again. They pay back the money with interest. No parts of the social safety net are strained at all.

    That’s at least POSSIBLE. Stranger things have happened economically.

    Like FDR’s New Deal dragging people into the depths of the Great Depression, because the goals to be achieved did not bear any fucking relation to the actual incentives inflicted upon the economy? Strange things like that?

    I’d prefer they made this incredibly risky gamble with the money of liberals like MNG who think this would be a good investment and risk at the offered interest rates, and let the rest of us opt out of futilely burning through huge piles of cash like that for companies that have been turned down by every private financier.

  152. I was waiting for Jim Anchower to show up.

  153. The bailout passes. The American automakers become profitable again. They pay back the money with interest. No parts of the social safety net are strained at all.

    That’s at least POSSIBLE. Stranger things have happened economically.

    Yes but what are we losing? Maybe a better system would emerge without a Big 2.5. We shouldn’t be content with more of the same. And just because something is possible doesn’t mean it’s likely or will give the best outcome.

    And the fact that Chrysler is still having problems indicates it was ultimately a poor investment.

  154. “It might have something more to do with the Germans and Japanese being fucking motivated to build good cars”

    Or maybe its the massive state support and protectionism Japan provided then and now, or the strong labor unions and welfare state (defray those beneifts costs) in Germany?

    “Maybe a better system would emerge without a Big 2.5. We shouldn’t be content with more of the same.”

    Maybe. And maybe we get a better system with the bailout. The future on those things is unclear to all but the most religious of ideologues. However, we can be sure what the short term results of them all going under and liquidating will be, and that’s bad.

  155. MNG,

    I mean, we got money back with interest when we bailed out Chrysler in 79 and they actually rebounded for a while.

    That looks like self-fisking to me.

    Libertarians, wedded to the axioms of classical economic theory but not empiricism it sometimes seem think that it cannot work because it violates the premises of such theory…

    Clearly, over the medium term the Chrysler bailout did not work, did it? That’s what “empiricism” teaches us, right?

    …but the world has proven itself more complex than can be captured by classical economic theory.

    Yet, somehow the very simplified macroeconomic models of Keynesianism, etc. is sufficient? Here we run up against the Hayekian knowledge problem. To be frank, libertarians acknowledge their ignorance in matters economic far more often and far more widely than central planners, friends of regulation, etc. do. The very complexity of the world is why libertarians are hesitant support government intervention.

    Professional economists have left that stuff behind a while ago.

    Ahh, no they have not. Classical economics is still taught, studied, discussed, etc. amongst economists and remains one of the backbones of the discipline.

  156. Does all of this remind anyone else of the events in Atlas Shrugged? We’ll soon have a government board controlling every bailed out industry, with those with the best lobbyists (the most “pull”) getting the cash, all while quality suffers disastrous declines and the truly productive individuals decide to drop out of the system rather than supporting it with ever higher taxes and ever lower rewards for innovation.

  157. MNG,

    However, we can be sure what the short term results of them all going under and liquidating will be, and that’s bad.

    Actually, in many aspects it is quite good. It is called “creative destruction” for a reason after all. It spawns new enterprises, it spawns new ways of doing things, etc. You cannot have innovation without it.

  158. Why are you convinced it will not? I mean, we got money back with interest when we bailed out Chrysler in 79 and they actually rebounded for a while. Libertarians, wedded to the axioms of classical economic theory but not empiricism it sometimes seem think that it cannot work because it violates the premises of such theory, but the world has proven itself more complex than can be captured by classical economic theory. Professional economists have left that stuff behind a while ago.

    Because the entire economy is in recession and even the successful car companies are having slowdowns in sales. Also because the “plan” presented by Detroit is basically “give us enough money to stay afloat until 2010, at which point a miracle will occur that will make us profitable.”

    If the plan was really workable, there would be a financier who would lend them the money.

  159. Or rather, you cannot have significant levels of innovation. The more we bail out these companies the more stagnant our economy will likely become and less competitive we will likely be.

  160. I’m pretty sure that Festivas are made in Germany these days. You know, like the Shamwow.

  161. “If the plan was really workable, there would be a financier who would lend them the money.”

    Yeah, those financiers know what’s workable and not ;). Shit, car dealers can’t get financing these days because the financiers have fucked themselves up.

    “Classical economics is still taught, studied, discussed, etc. amongst economists and remains one of the backbones of the discipline.” It’s been greatly supplemented and often contradicted too by the field.

    “somehow the very simplified macroeconomic models of Keynesianism, etc. is sufficient?”

    False dilemma. There are many economic schools of thought, not just classical or Keynesian.

  162. False dilemma. There are many economic schools of thought, not just classical or Keynesian.

    Moreover, they’re all wrong.

  163. If the plan was really workable, there would be a financier who would lend them the money.

    Markets are not efficient. None. Not one single blessed one.

  164. Is there hope that the Senate could show some freaking backbone and kill this thing?

  165. MNG,

    It’s been greatly supplemented and often contradicted too by the field.

    Your original claim was that it has been abandoned in toto. I see no other reading of this statement:

    Professional economists have left that stuff behind a while ago.

    As for it being contradicted, most of the efforts “contradict” classical economics have been found to be wrong. Which is why were are stilling talking about Smith’s wonderful observations about division of labor as opposed to Marx’s notions of a return to a jack of all trades pastoral.

    False dilemma. There are many economic schools of thought, not just classical or Keynesian.

    I included “etc.” in there for a reason.

  166. MNG,

    Yeah, those financiers know what’s workable and not ;). Shit, car dealers can’t get financing these days because the financiers have fucked themselves up.

    Those financial institutions are not lending for sound reasons.

  167. Maybe. And maybe we get a better system with the bailout. The future on those things is unclear to all but the most religious of ideologues.

    Like those deciding they need a bailout or otherwise we all face catastrophic ruin right? They know the future, but no one else does. Well except those few who agree with them right?

  168. That would be “Knute.”

  169. we all face catastrophic ruin right?

    It was a plausible scenario with the financial industry in September and it’s a plausible scenario with the auto industry now. The debate about the bailout should be covering how plausible it really is, and using that as a factor in judging the risk/reward of providing short term financing.

    As for calling the original Chrysler bailout a failure because of the condition that Chrysler is in now…hogwash. Once Chrysler paid back the feds, the bailout was permanently logged as being successful. Every nickel of profit they earned afterwards, and every job they provided, was gravy. Their condition now is completely irrelevant.

    However, the success of the previous bailout tells us nothing beyond that successful bailouts are possible. Whether the current one would work remains open to debate.

    Again, my point on this thread is that the focus of the debate needs to move beyond ideology. I happen to agree with Seward that it is possible that the long term benefit of a natural business failure could outweigh the overall costs shouldered by our social safety net. However, I believe Seward et. al. need to make a more objective case for this position. That objective case is what libertarians should be providing to counter the current proposal on the table, but they have yet to do so. Without that, libertarians are just countering objective analysis with ideological projections, and that’s simply insufficient.

  170. Markets are not efficient. None. Not one single blessed one.

    Like democracies being the worst form of government, except for all the others, markets are the worst way to organize an economy, except for all the others.

    Is there hope that the Senate could show some freaking backbone and kill this thing?

    No. Based on the financial bailout, most of the opposition is nothing more than positioning for pork. Its a lead pipe cinch that the longer this thing spends in the Senate, the worse it will be in the end.

  171. As for calling the original Chrysler bailout a failure because of the condition that Chrysler is in now…hogwash. Once Chrysler paid back the feds, the bailout was permanently logged as being successful.

    I disagree. We are now seeing the fruits of the moral hazard wrought by the Chrysler bailout.

  172. Markets are not efficient. None. Not one single blessed one.

    Like democracies being the worst form of government, except for all the others, markets are the worst way to organize an economy, except for all the others.

    Precisely.

  173. As for calling the original Chrysler bailout a failure because of the condition that Chrysler is in now…hogwash. Once Chrysler paid back the feds, the bailout was permanently logged as being successful. Every nickel of profit they earned afterwards, and every job they provided, was gravy. Their condition now is completely irrelevant.

    However, the success of the previous bailout tells us nothing beyond that successful bailouts are possible. Whether the current one would work remains open to debate.

    Lack or imagination is not an argument. Just because you cannot conceive that the resources could have been used better does not mean they were used properly. Just because the government got a return on it doen’t mean it was a net gain. A much greater return would almost certainly have been the result if market prices had been allowed to be used. Instead the government made a bad loan that they happened to get lucky on. How often does that happen?

    And last I checked the loan to Chrysler was supposed to allow them to revitalize themselves so they wouldn’t need anymore help. So why are they crawling back to the government again?

  174. And last I checked the loan to Chrysler was supposed to allow them to revitalize themselves so they wouldn’t need anymore help.

    Really? Any more help ever? For all eternity? Chrysler would survive the next deep impact?

    You’re creating an arbitrary and unattainable judge of success by claiming that Chrysler would need to survive as a viable business through thick and thin forever.

    Chrysler got past it’s near death experience 30 years ago. Mission accomplished. The only salient relevance is RC Dean’s point that due to moral hazard the original bailout might have been a contributing factor to decisions that have led to the industry’s current distressed state. However, that’s a tough theory to support (or attack) substantively.

  175. MP,

    As for calling the original Chrysler bailout a failure because of the condition that Chrysler is in now…hogwash.

    Exactly how many “strikes” does a company get before we stop bailing them out? Three? Four? Indeed, when did it become the job of the government exactly to determine specifically who exactly the losers and winners in the market are? And if that is the job of the government, shouldn’t the fact that Chrysler is once again in deep economic distress and asking for another bailout caution one about the usefulness of bailouts? Indeed, I’d bet that one could find a pattern industries if one did some research on the subject – industries which have been bailed out once return to the government for bailouts, whereas those which have not don’t.

    Again, my point on this thread is that the focus of the debate needs to move beyond ideology.

    What about your ideology? Or are you some sort of neutral, Archimedian point of reasoning?

    However, I believe Seward et. al. need to make a more objective case for this position.

    I have made an objective case, actually. Look at the historical record. When governments start planning economies or portions of economies the costs far outweigh the benefits. End of story. Always happens. There is simply no way for governments to plan an economy or an industry and for that process to turn out as an optimal.

    BTW, I would note that from the late 1980s onward, the Japanese government threw scads of money at infrastructure, “key” industries, etc.* and that this approach is now generally accepted as one which did not bring Japan out of its decade plus recession. So there is one natural experiment right there for you to chew on.

    Without that, libertarians are just countering objective analysis with ideological projections, and that’s simply insufficient.

    What objective analysis would that be exactly? Mostly what I see coming out of the government is hyperventilating, sky is falling rhetoric.

    *As they say, they basically paved every road in Japan three times over, etc.

  176. MP,

    You’re creating an arbitrary and unattainable judge of success by claiming that Chrysler would need to survive as a viable business through thick and thin forever.

    What exactly is the point of having a free market, winners and losers economy if businesses cannot fail?

    Anyway, I would note that Chrysler has been really not been all that great of a car company even after the 1983 (when the bailout was paid off). It has generally lost market share since that time period and it has been in ever worsening trouble for nearly a decade now. So the fact that Chrysler paid off the bailout proceeds is no measure of the bailout’s success.

  177. What exactly is the point of having a free market, winners and losers economy if businesses cannot fail?

    We don’t have a free market. If we didn’t have a social safety net, then I’d be 100% against and Federal assistance. But since we do, I’m pragmatic and I want to find the solution that takes the least $$$ out of my pockets.

    It has generally lost market share since that time period and it has been in ever worsening trouble for nearly a decade now.

    That further highlights the success of the bailout. It’s much better for all involved for a business to slowly crumble than to be Lehman’d.

  178. More on the possible cascade effects of “let them fail” here.

  179. There is a fairly broad agreement that one of the most significant factors in Chrysler’s successful emergence from government assistance was the minivan.

    Minivans were spawned by a careful reading of the Corporate Average Fuel Economy rules; they are the point of origin of the dreaded Sport Utility Vehicle. If Chrysler had not been “saved” the SUV segment might never have been created, or would certainly have taken a somewhat different (and perhaps less pernicious) form.

    Opportunity costs, indeed.

  180. That further highlights the success of the bailout. It’s much better for all involved for a business to slowly crumble than to be Lehman’d.

    That’s one point of view.

  181. We don’t have a free market. If we didn’t have a social safety net, then I’d be 100% against and Federal assistance. But since we do, I’m pragmatic and I want to find the solution that takes the least $$$ out of my pockets.

    No we are not a free market unfortunately. But that only makes it even more important to minimize the distortions that we can. Every bailout is one more lurch toward less economic freedom and cosumer choice.

    Do you actually think the government is going to stop the bailouts at some point and look around and say “Yeah, I think we have done enough,” wipe it’s hands and let things play out without anymore interference? This is a cash cow for them to dump money on all their favorite interest groups who paid for their elections. They won’t stop until there’s nothing left to spend or someone stops them.

    Of course by then it’s probably too late and we will have lost a huge amount of potential wealth. The sad part is no one will ever know how good things could have been because they won’t even know what they missed.

  182. Watching a live debate (performance) on C-SPAN. Kucinich (Martian-OH) is lobbying his fellow co-conspiritors. We all know he’s nuts, so my rhetorical point is: Damn, our Congress-thugs are freaking retards. That is all. Discuss.

  183. Bailout-era Chrysler was also the inventor of rebates.

    “Buy a car, Get a check!”

  184. The bailout passes. The American automakers become profitable again. They pay back the money with interest. No parts of the social safety net are strained at all.

    That’s at least POSSIBLE. Stranger things have happened economically.

    Iraq becomes a beacon of democracy. We’ll be welcomes as liberators.

  185. Change We Can Believe In!

    The Democratic Congress, in joining forces with President Bush, find themselves opposed by GOP Senators!

    Emergency aid for the nation’s imperiled auto industry was thrown into jeopardy Wednesday, opposed by Republicans who were revolting against a hard-fought deal between Democrats and the Bush White House to speed $14 billion to ailing carmakers.

    http://seattletimes.nwsource.com/html/politics/2008465305_apcongressautos.html

  186. An Ideal Bailout

    Nancy Pelosi catches the Chairman of GM leaving the House floor.

    Pelosi: Listen, that didn’t go so well, and I’m trying to help you out here, you need to rethink your approach.

    Chairman: What? I thought that went pretty well.

    Pelosi: Look, I’m trying to help you out here, so you might do well to accept a little… [pelosi looks around to check for eavesdroppers]…coaching. But I’m only going to tell you this once, because it doesn’t look good for me or my party to be shoveling out the corporate welfare. You know, Change We Can Believe in and all that?

    Chairman: *sighs* Ok, so what could we have done “better” [makes little quotation signs with fingers]

    Pelosi: [annnoyed] First of all, dumbass, drop the corporate jet.

    Chairman: [looks puzzled] Why?

    Pelosi: How do you think it looks?

    Chairman: [stares blankly, then looks at his entourage] Oh riiiiiight. What with global warming and all. [turns to assistant] Make a note: “buy carbon credits to offset plane trip”. [turns back to Pelosi] Good thinking. Can’t forget the “environment” [makes quote signs with fingers]

    Pelosi: [grimmacing] Well, yes, the “environment”..[mimicks quote signs] as you put it is important to the Democratic party, but that’s not really where I’m going with this.

    Chairman: [looking puzzled] I’m sorry? What could be more important then our precious resources?

    Pelosi: It’s about money.

    Chairman: Money?

    Pelosi: Yes, money.

    Chairman: I don’t follow.

    Pelosi: You’re here asking for $25 billion dollars.

    Chairman: And?

    Pelosi: Those are… as much as we Democrats can’t stand to admit… taxpayer dollars.

    Chairman: Right…and?

    Pelosi: When you come to a meet-and-greet begging for billions of dollars from people who make $12 an hour and you show up in a corporate jet, it looks bad.

    Chairman: [Stares into Pelosi’s eyes, thinking then snaps fingers] I’ve got it. [turns to assistant] Memo… we’ll show our “real” concern for our precious resources by driving to the next meeting in a Hybrid… and Chad, I don’t want to be seen in a Prius this time, you know what happened last year in Palm Beach.

    Pelosi: [long sigh] It’s not about hybrid cars or carbon emissions, it makes it look like you don’t need the money. Buying carbon credits AND taking the jet makes it look like you need the money even less.

    Chairman: [after long pause] Ooooooohhhh riiiighht.

    [assistants start furiously taking notes, nodding and giving looks of affirmation to eachother]

    Chairman: This is great. When we show how much money we saved on the Jets, we can probably ask for more…take a memo, “ask for $36 billion on our next scheduled meeting”. [winks at Pelosi] Good idea, Madam Speaker, with the transportation cost-savings, we can up the ante…so to speak.

    Pelosi: I’m only here to help.

  187. MP,

    But since we do, I’m pragmatic and I want to find the solution that takes the least $$$ out of my pockets.

    Well, there is a reason why the federal government largely abandoned the NRA style efforts; because it was a failure. A disaster in fact. Government planning fails. It fails. It fails.

    That further highlights the success of the bailout. It’s much better for all involved for a business to slowly crumble than to be Lehman’d.

    No, it is not better for all involved. Government bailouts are not positive sum games; they are zero sum at best. Some parties win and some parties lose with government favoritism to one industry actor or another. I can think a number of losers in this instance – consumers as a whole, those who would have started up alternatives to Chrysler, etc. I’m really rather surprised that you made this comment.

  188. that bitch!

  189. Regardless of your feeling on the Auto situation, here is some info to
    consider. This letter is well stated particularly to Sen Shelby from
    Alabama, who is strongly opposed – additional good Q & A I added from
    another message. No one is perfect in this but I think the domestics are
    getting some not so accurate generalizations towards them in all of this.
    Even all the Asian sales are down nearly 30% + so all are suffering.

    Bill Szelag

    Subject: Intermountain Letter to the Editor- Elkins Fordland

    A Ford Dealer in the Pittsburg area, outstanding letter to the editor. If
    you have email addresses for your Congressional folks, particularly Senator
    Shelby, send this on. Dodd and all his cohorts are nothing but hypocrites,
    in my opinion.

    As I watch coverage of the fate of the U.S. auto industry,one alarming and
    frustrating

    >>>fact hits me right between the eyes. The fate
    >>>of our nation’s economic survival is in the
    >>>hands of some congressmen who are completely
    >>>out of touch and act without knowledge of an
    >>>industry that affects almost every person in
    >>>our nation. The same lack of knowledge is
    >>>shared with many journalists whom are
    >>>irresponsible when influencing the opinion of millions of viewers.
    >>>
    >>>Sen. Richard Shelby of Alabama has doomed the
    >>>industry, calling it a dinosaur. No Mr. Shelby,
    >>>you are the dinosaur, with ideas stuck in the
    >>>’70s, ’80s and ’90s. You and the uninformed
    >>>journalist and senators that hold onto myths
    >>>that are not relevant in today’s world.
    >>>
    >>>When you say that the Big Three build vehicles
    >>>nobody wants to buy, you must have overlooked
    >>>that GM outsold Toyota by about 1.2 million
    >>>vehicles in the U.S. and Ford outsold Honda by
    >>>850,000 and Nissan by 1.2 million in the U..S.
    >>>GM was the world’s No. 1 automaker beating Toyota by 3,000 units.
    >>>
    >>>When you claim inferior quality comes from the
    >>>Big Three, did you realize that Chevy makes the
    >>>Malibu and Ford makes the Fusion that were both
    >>>rated over the Camry and Accord by J.D. Power
    >>>independent survey on initial quality? Did you
    >>>bother to read the Consumer Report that rated
    >>>Ford on par with good Japanese automakers?
    >>>
    >>>Did you realize Big Three’s gas guzzlers
    >>>include the 33 mpg Malibu that beats the
    >>>Accord? And for ’09 Ford introduces the Hybrid
    >>>Fusion whose 39 mpg is the best midsize,
    >>>beating the Camry Hybrid? Ford’s Focus beats
    >>>the Corolla and Chevy’s Cobalt beats the Civic?
    >>>
    >>>When you ask how many times are we going to
    >>>bail them out you must be referring to 1980.
    >>>The only Big Three bailout was Chrysler, who
    >>>paid back $1 billion, plus interest. GM and
    >>>Ford have never received government aid.
    >>>
    >>>When you criticize the Big Three for building
    >>>so many pickups, surely you’ve noticed the
    >>>attempts Toyota and Nissan have made spending
    >>>billions to try to get a piece of that pie.
    >>>Perhaps it bothers you that for 31 straight
    >>>years Ford’s F-Series has been the best selling
    >>>vehicle. Ford and GM have dominated this market
    >>>and when you see the new ’09 F-150 you’ll agree this won’t change soon.
    >>>
    >>>Did you realize that both GM and Ford offer
    >>>more hybrid models than Nissan or
    >>>Honda? Between 2005 and 2007, Ford alone has
    >>>invested more than $22 billion in research and
    >>>development of technologies such as Eco Boost,
    >>>flex fuel, clean diesel, hybrids, plug in hybrids and hydrogen cars.
    >>>
    >>>It’s 2008 and the quality of the vehicles
    >>>coming out of Detroit are once again the best in the world!
    >>>Perhaps Sen. Shelby isn’t really that blind.
    >>>Maybe he realizes the quality shift to
    >>>American. Maybe it’s the fact that his state of
    >>>Alabama has given so much to land factories
    >>>from Honda, Hyundai and Mercedes Benz that he
    >>>is more concerned about their continued growth
    >>>than he is about the people of our country.
    >>>Sen. Shelby’s disdain for “government
    >>>subsidies” is very hypocritical. In the early
    >>>’90s he was the driving force behind a $253
    >>>million incentive package to Mercedes. Also,
    >>>Alabama agreed to purchase 2,500 vehicles from
    >>>Mercedes. While the bridge loan the Big Three
    >>>is requesting will be paid back, Alabama’s
    >>>$180,000-plus per job was pure incentive. Sen.
    >>>Shelby, not only are you out of touch, you are
    >>>a self-serving hypocrite, who is prepared to
    >>>ruin our nation because of lack of knowledge
    >>>and lack of due diligence in making your opinions and decisions.
    >>>
    >>>After 9/11, the Detroit Three and Harley
    >>>Davidson gave $40 million-plus emergency
    >>>vehicles to the recovery efforts. What was
    >>>given to the 9/11 relief effort by the Asian
    >>>and European Auto Manufactures? $0 Nada. Zip!
    >>>
    >>>We live in a world of free trade, world economy
    >>>and we have not been able to produce products
    >>>as cost efficiently. While the governments of
    >>>other auto producing nations subsidize their
    >>>automakers, our government may be ready to
    >>>force its demise. While our automakers have
    >>>paid union wages, benefits and legacy debt, our
    >>>Asian competitors employ cheap labor. We are at
    >>>an extreme disadvantage in production cost.
    >>>Although many UAW concessions begin in 2010,
    >>>many lawmakers think it’s not enough.
    >>>
    >>>Some point the blame to corporate management. I
    >>>would like to speak of Ford Motor Co. The
    >>>company has streamlined by reducing our
    >>>workforce by 51,000 since 2005, closing 17
    >>>plants and cutting expenses. Product and future
    >>>product is excellent and the company is focused
    >>>on one Ford. This is a company poised for
    >>>success. Ford product quality and corporate
    >>>management have improved light years since the
    >>>nightmare of Jacques Nasser. Thank you Alan
    >>>Mulally and the best auto company management team in the business.
    >>>
    >>>The financial collapse caused by the secondary
    >>>mortgage fiasco and the greed of Wall Street
    >>>has led to a $700 billion bailout of the
    >>>industry that created the problem. AIG spent
    >>>nearly $1 million on three company excursions
    >>>to lavish resorts and hunting destinations.
    >>>Paulson is saying no to $250 billion
    >>>foreclosure relief and the whole thing is a
    >>>mess. So when the Big Three ask for 4 percent
    >>>of that of the $700 billion, $25 billion to
    >>>save the country’s largest industry, there is
    >>>obviously oppositions. But does it make sense
    >>>to reward the culprits of the problem with $700
    >>>billion unconditionally, and ignore the victims?
    >>>
    >>>As a Ford dealer, I feel our portion of the $25
    >>>billion will never be touched and is not
    >>>necessary. Ford currently has $29 billion of
    >>>liquidity. However, the effect of a bankruptcy
    >>>by GM will hurt the suppliers we all do
    >>>business with. A Chapter 11 bankruptcy by any
    >>>manufacture would cost retirees their health
    >>>care and retirements. Chances are GM would
    >>>recover from Chapter 11 with a better business
    >>>plan with much less expense. So who foots the
    >>>bill if GM or all three go Chapter 11? All that
    >>>extra health care, unemployment, loss of tax
    >>>base and some forgiven debt goes back to the
    >>>taxpayer, us. With no chance of repayment, this
    >>>would be much worse than a loan with the intent of repayment.
    >>>
    >>>So while it is debatable whether a loan or
    >>>Chapter 11 is better for the Big Three, a $25
    >>>billion loan is definitely better for the
    >>>taxpayers and the economy of our country.
    >>>
    >>>So I’ll end where I began on the quality of the
    >>>products of Detroit. Before you, Mr. or Ms.
    >>>Journalist continue to misinform the American
    >>>public and turn them against one of the great
    >>>industries that helped build this nation, I
    >>>must ask you one question. Before you, Mr. or
    >>>Madam Congressman vote to end health care and
    >>>retirement benefits for 1 million retirees,
    >>>eliminate 2.5 million of our nation’s jobs,
    >>>lose the technology that will lead us in the
    >>>future and create an economic disaster
    >>>including hundreds of billions of tax dollars
    >>>lost, I ask this question not in the rhetorical
    >>>sense. I ask it in the sincere, literal way.
    >>>Can you tell me, have you driven a Ford lately?
    >>>
    >>>Jim Jackson
    >>>Elkins
    >>>
    >>>No virus found in this incoming message.
    >>>Checked by AVG – http://www.avg.com
    >>>Version: 8.0.176 / Virus Database:
    >>>270.9.15/1833 – Release Date: 12/5/2008 7:08 PM
    I received the following from a dealer friend, Dave Sinclair, who has
    Buick, Pontiac, GMC and a large Ford store in St. Louis. When I read this,
    I felt this needs to be passed on. Some of you I receive e-mail from have a
    large distribution list.

    I don’t think this industry needs to apologize for their level of success
    and contribution to our AMERICAN economy. As far as the Big Three having a
    focus on the market with large trucks and SUV’s, the competition has been
    pushing hard to catch up and to that end they have recently built plants
    for large vehicles. Currently some of the Domestics are taking the lead
    in fuel efficient transportation..

    When I think about this Congressional Committee, which is responsible for
    Banking, Housing and Urban Affairs, I realize that they have some
    responsibility for the problems in our financial system. Maybe we need a
    ZAR to oversee their ineffectiveness!! As a result of this Committee, and
    with their incompetence, they own a lot of the Auto industry problem. As
    some of you already know,=2 0I think we need to stand up for our success
    and push back on some of these Washington Leaders. The Auto guys were only
    wanting a loan for 5% of the $700Billion. Some of these leaders have hurt
    our industry a lot in the last month with their degrading political
    opinion of our automotive men and women and especially our leaders. There
    should be some accountability here.

    Proud to be a part of this industry!!! Note the following —- Who makes
    the BEST Cars and Trucks???

    Who makes the best cars?

    1. Which country can boast that their brands occupy 2 of the top 3 spots
    for long-term reliability?

    Answer: United States.
    Per J.D. Power Vehicle Dependability=2 0Study, Mercury and Cadillac are in
    the top 3, along with Lexus. And in 2007, Buick was tied with Lexus for the
    top spot.
    http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2008115

    2. As of August 2007, which manufacturer had the most recalled
    vehicles in the U.S. for that year?

    Answer: Volkswagen.
    According to Business Week, Volkswagen had the most recalls at this time a
    year ago. The second worst was Toyota.
    http://www.businessweek.com/autos /content/aug2007/bw20070810_455098.htm

    3. Pick the brand from each group that has the highest initial
    quality.
    a.. Answer : Cadillac (bette r than both Acura and BMW)
    b. Answer: Mercury (better than both Honda and Nissan)
    c. Answer: Chevrolet (better than Acura, BMW, and Mazda)

    This is according to J.D. Power’s Initial Quality Survey.
    http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2008063

    4. Which midsize sedan has the highest initial quality?

    Answer: The Chevrolet Malibu has better initial quality than any
    competitor, including the Honda Accord, Toyota Camry and Nissan Altima.
    The Ford Fusion also beat all three Japanese competitors.
    This too is from the J.D. Power Initial Quality Survey, which also reveals
    that above average are American brands Mercury, Ford, Cadillac, Chevrolet ,
    Pontiac, Lincoln, and Buick. Below average are import brands Acura, Kia,
    Nissan, BMW, Mazda, VW, Subaru, and Scion (and several others).
    http://www.jdpower.com/autos/articles/2008-Initial-Quality:-Midsize-and-Large-Cars

    http://www.jdpower.
    com/corporate/news/releases/pressrelease.aspx?ID=2008063

    5. Which large sedan has the highest initial quality?

    Answer: Again per J.D. Power, the highest quality large car is the Pontiac
    Grand Prix, beating the Toyota Avalon. Two other Detroit cars that beat
    the Avalon are the Mercury Sable and Mercury Grand Marquis.
    http://www.jdpower.com/autos/articles/2008-Initial-Quality:-Midsize-and-Large-Cars

    6. Which midsize pickup has the highest initial quality?

    Answer: The Dodge Dakota has the best quality for midsize pickups, proving
    that Chrysler too can beat the imports. Both the Dakota and the Ford Ranger
    beat the Toyota Tacoma.
    http://www.jdpower.com/autos/articles/2008-Initial-Quality:-Pickups-and-Vans

    7. Which car is the most economical overall?

    Answer: Per Edmunds.com, the premier automotive analysis site, the most
    economical car in America, taking into account not only mileage but all
    costs, is the Chevrolet Aveo. The Honda Fit is #3 and the Toyota Prius is
    a distant #34.
    http://www.edmunds.com/help/about/press/127806/article.html

    8. Which car did the Los Angeles Times describe as “a better car than BMW
    or Mercedes or Lexus or Infiniti”?

    Answer: “Cadillac makes a better car than BMW or Mercedes or Lexus or
    Infiniti, and that car is the 2008 CTS. No other car in the mass market
    dares so much as this expressive and audacious bit of automotive
    avant-gardism.” Dan Neil, LA Times. (It might be interesting to know that
    the latest sales figures for full size luxury cars had the new Lincoln MKS
    at #3, just behind BMW and Audi, but ahead of Lexus and the Cadillac CTS.)
    http://www.latimes.com/classified/automotive/highway1/la-hy-neil12dec12-pg,0,5427133.photogallery

    9. Which company makes the winner of the 2008 “Green Car of the Year”
    award?

    Answer: The Chevrolet Tahoe Hybrid is the winner of this award. How could
    a full-size SUV defeat the media darling Toyota Prius? Read the link below
    and you will discover,
    “What’s equally eye-opening is that the Tahoe’s 21 mpg city fuel efficiency
    rating is the same as that of the city EPA rating for the four-cylinder
    Toyota Camry sedan.” (The new F150, non-hybrid, also gets 21 mpg highway.)

    Did you catch that? A huge, full-size SUV from Chevrolet that gets the same
    city mileage as a 4-cylinder Toyota Camry!! Chevy obtained this remarkable
    achievement through the use of its 2-mode hybrid system, a technology that
    Toyota does not have.
    http://www.greencar.com/features/2008greencar/

    10. Which car was selected by the North American automotive press corps
    as the “North American Car of the Year” for 2007?

    Answer: Not only was the Saturn Aura picked by the automotive press corps
    as better than the Honda Fit and the Toyota Camry, “When a panel of
    journalists named the Saturn Aura the North American Car of the Year over
    the Toyota Camry, the vote wasn’t even close, 205-89.” Chicago
    Tribune, 1/15/07
    http://www.northamericancaroftheyear.org/news.html

    11. Which car won the same award for 2008?

    Answer: GM again crushed the Japanese competition in 2008 when the Malibu
    received 190 votes to the Honda Accord’s 95. The Accord actually came in
    3rd since GM’s other finalist, the Cadillac CTS, received 165 votes.
    http://www.northameric ancaroftheyear.org/news.html

    12. Which company had a luxury vehicle, a midsize sedan, and a large
    truck removed from the Consumer Reports recommended vehicles list in
    October 2007 because of mounting quality problems?

    Answer: Toyota’s much publicized quality problems resulted in Consumer
    Reports actually removing from their recommended vehicles list the Lexus GS
    luxury car, Camry V6 sedan, and Tundra pickup. This demotion occurred in
    October 2007.

    This Q &A list was put together by an employee of an American car company
    who just might lose his job because of public perceptions that do not match
    reality. If you are one of the many Americans who gave up on Detroit’s
    cars because of a bad experience many years ago, it’s time to rethink your
    position. Rethink Detroit.

    Detroit automakers: 79 U.S. jobs per 2,500 cars sold in America.
    Foreign automakers: 33 U.S. jobs per 2,500 cars sold in America.

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