Showing posts with label GM. Show all posts
Showing posts with label GM. Show all posts

Wednesday, February 18, 2009

GM, Chrysler, Homeowners: they all want MY money.





Frederic Bastiat, writing two centuries ago, said it best:

"The law has come to be an instrument of injustice....the law defends plunder and participates in it...The present day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it."

Today's News item #1: "General Motors Corp. and Chrysler LLC summoned the prospect Tuesday of their collapse unless they get $7 billion in federal aid within six weeks -- part of a dramatic plea for a total of up to $39 billion to survive the worst economic crisis in the history of Detroit's signature industry."

(This, of course, is 14 billion more than they ASSURED us all that they needed a few months ago)

Today's News item #2 (With breaking details from ABC news, who, apparently, claims an 'in' with Democratic policy makers): "...Government subsidies for lenders to modify loans to homeowners who are struggling to make payments. The government would subsidize the difference.... A program through Fannie Mae and Freddie Mac for homeowners to refinance their mortgages if they owe more than their homes are worth..."

So, in a nutshell:

1) *I,* (like the majority of Amertican consumers) chose NOT to buy GM or Chrysler cars, but to purchase cars that met my needs as a consumer. Because I chose better cars by better manufactureres that offered me what I needed and wanted at a price I could afford...my government will now force me, via taxation, to keep afloat poor competitors whom I specifically did NOT choose on my own to support.

2) *I* chose to purchase a tiny house that i could afford, and refinanced when appropriate, to make sure that I was a responsible homeowner. Eight of us lived in an affordable two-bedroom house. I subdivided the living room to create a third bedroom. When my teens needed more room, i moved to sleeping on an unheated porch - because it was the responsible thing to do.

However, for all those who bought houses beyond their means, who threw caution to the wind in terms of adjustable rates, who lied on their applications...and for all the banks who make money on these loans...these people will keep their houses and their banks will continue to make money...because my government will now force ME to subsidize THEM through taxation.

Yes, I'm disgusted.

Sunday, December 07, 2008

"Big 3" Auto Bailout? How many mistakes can one Congress make?

A step back in History:

It's 1979, and Lee Iacocca, Chairman of Chrysler, has successfully convinced Congress to guarantee 1.5 billion in loans to the corporation, with taxpayer dollars, because this would help revive the all-American Corporation. There was even a specific plan - Chrysler's "K-Car" would catapult the company into profitability forever, and an american icon would be saved.

Wrong.

Today, the so-called "Big Three" - GM, Ford, and yes, Chrysler...are seeking billions more in assistance, using the same tired arguements and promsiing the same eventual victories if they could just get "a little help."

It is one of those cases where if you say things often enough, people believe it. "Big Three?" You can find this phrase repeated over and over in the media.

But here are October's auto sales figures:

GM: 168,719 units sold
Toyota: 152,278 units
Ford: 132,278 units
Chrysler: 94,530 units

Some Lessons:

1) They are NOT "the Big 3." Consumers have clearly spoken, and they've been saying "Toyota" for some time. Congressional action to prop up Ford is tantamount to using taxpayers dollars against the taxpayers themselves. We have already spoken: Toyota has given us what we wanted, at a price we want. Don't force us to bailout the companies we did NOT choose.

2) GM is the largest auto manufacturer world-wide. Since when does the Government seek to bail out the largest company in a competitive field? If GM can not make a profit when it has more car sales than any other company, it is time for them to radically change: split up, reorganize, bust the UAW - but dont seek tax dollars for "same old same old."

3) Ford, GM, and Chrysler ceded the small car market to Honda and Toyota. They lost, folks. That's what business is all about. In the 1500s, Spanish Monk-Economist De Albornoz wrote that "when businesses experience profit and loss, and since when they make a profit, they keep it, they must not transfer a loss to the people."

The Market has clearly chosen. Congress, the UAW, and the so-called "Big-3" don't like the results.

Too Bad. Live with it. Capitalism doesnt guarantee success, and neither should Congress.