Tuesday, November 11, 2008

Banks, financials, automakers - who's next?

What about....


Aren't they as 'critical' to our economy as all these other industries? Don't they provide a vital function in sharing information about all things, including the economy? Aren't they an industry that is 'too big to fail'?

Well, that's what the arguments will be.

So how long do you think it will be before the print media goes to Washington with it's hand out? And what will the impact be if the people who are supposed to watch the government get a bailout from that same government?


Tim Higgins said...


Obviously you are talking about a subject near and dear to my heart (and livelihood). The problem in my industry, like many others, is acute and severe. Circulation is decreasing at a rate of about 5% per year. Ad revenues are currently down over 30% for the year. Major layoffs of both rank and file and management have occurred. Plant consolidation is occurring across the country where possible, but other newspapers are simply closing.

I am not asking for a government bailout though, regardless of how much I agree with editorial opinion at many or how it may affect my future. A free and independent press is still vital to the national interest. How long could it remain either once it has accepted government money?

Roman said...

Any industry, who can afford expensive consultants, lawyers and/or lobbyists who will make a very persuasive case for their continued existance at taxpayer expence will be next. If you can afford to pay upwards of $200.00 per hour per person for a team of trained shills to plead for your piece of the bailout pie will be rewarded with everlasting life. Such is the way of the world when you allow the government unfettered power of the purse. Next, we will expect them to make the decisions as to which technology will take the US to "energy independence". This too will prove to be a folly, with no one to blame; witness Fannie Mae/Freddie Mac.

Jay Ott said...

I don't want to sound like an alarmist, but here's the scary part--based partly on reasonable worst-case scenario, speculation and partly on events in history.

Some are more equal than others. In other words, the gov't is the grand-exalted-omnipotent stomper that is arbitrarily deciding who should live and who should die--who is worthy and who is unworthy--who is beneficial and who is expendable.

Of course, I mean that in a figurative sense about the survival of an industry, not literally about life and death of individuals.

Just because one is literal and the other is figurative, doesn't mean that the same principle is not at work here. I think that these only differ in degree, not in kind.

But how is anyone to know that this will be as far as the gov't will go in deciding what industries should be rescued while others are allowed to self-destruct or even to be stamped out by gov't "for the sake of the good of society"?

The A-Hole Lawyer said...

I think Maggie touched on this last night on the show, but I only caught the lead in.

If $25 billion of the new auto industry request is for health benefits for retirees, and we already pay in the Trillions for social security and medicare; why not, as part of the "bailout" transfer those retirees into social security and medicare?

If their retirement/pension plans are in place - then make them use medicare for health benefits, while keeping their retirement checks.

If the unions want to sue the big 3for this breach of contract - so be it. They can sue themselves out of work. Or, as a requirement of a bailout (which in theory is to prevent the loss of millions of jobs) Congress can mandate that the unions accept this concession.

Will it be difficult for auto worker retirees to switch from gold plated BCBS of MI or other private plans to Medicare - YOU BET, and many will have to find ways to supplement that coverage. But as President Elect Obama stated - we must all sacrifice.

Why should the American taxpayer who has never been in the auto industry or their unions sacrifice more than the membership?

I don't know what it costs bottom line to build a Ford. But if the thousands of dealerships have to consolidate, and the price has to be dropped to $500 over cost, and the wages and benefits of industry executives and workers has to be cut - so be it.


Norma said...

As I commented at my own blog today, "My mortgage has been paid for 20 years, and I never charged anything except big ticket things, then paid those in 30 days. Not sure I ever had a late charge or interest on my credit card. Never had a student loan. Paid cash for my 2002 van. But "Treasury Secretary Henry M. Paulson Jr. on Wednesday announced another major change in the $700 billion bailout program, saying he will use the funds to aid consumer finance companies that are not banks to try to revive collapsed markets for auto loans, student loans and credit cards." And Barney Frank still hasn't had to answer for what he and the Democrats did to the housing market which came tumbling down.

Norma said...

Note to Tim: I like to read newspapers and news journals, but I'm also conservative. Even the news stories in WSJ are enough to make me flip to the editorial pages. Maybe they should try writing for us?

Google Analytics Alternative