Gidiyup

The Bailouts

Recently there has been a lot of noise about the big 3 automakers asking for a loan from the federal government to help them get through the recession that we are in. Some feel that is is unfair that the government has decided to give money to the automakers because the powers that be have not done a good job in running the companies. I feel that is it more complicated than. Once the government decided to hand out money to all the poorly run financial institutions who arguably caused this recession that we are in, then I think that they should do the same for the automakers. In one of the hearings Democratic Congressman, Michael Capuano of Massachusetts said "My fear is that you're going to take this money and make the same stupid decisions you made for 25 years". I can't believe that the CEOs would sit there and accept this criticism when Congress is part of the reason our economy is bankrupt to begin with. Who are they to judge how to run an auto company?

First off, the American auto makers have some issues that they need to work out, obviously. However, it it not just down to good fuel efficient cars. Yes Toyota has the Prius but Toyota it is rumored that Toyota is barely making a profit on that car. The difference in quality of American vs. all other car manufacturers in negligible. Most people who look a these 'Consumer Reports' type list that are supposed to look at quality never look at the detailed information as to how those lists are made. If you really look at how these ratings are done, you will find some obvious flaws, they main one being that they are basically surveys sent out to owners of cars. Yes, the American car makers went through a period in the 80's of making lower quality cars but that was 20 years ago but as far as quality today, it boils down to simple perception.

I do agree that GM especially has to many overlapping models and divisions and shutting down the Oldsmobile division was an attempt to streamline. After GM made this decision they spent over 5 years fighting lawsuits despite setting aside over a billion dollars for the transition. Lets not even discuss the Unions and how much money they are costing the American car companies. These are the kind of things that most people don't take into account. On the surface it seems easy but it is not that simple.

I'm not saying that the American Auto industry is perfect but I think it is unfair to say that they are all bad. GM, has some great cars and have many more great cars in the pipeline including smaller cars and more hybrids. Fords quality is way up and their Ford Truck, yes Ford Truck has been the top selling Auto (yes auto not truck) for many years. Chrysler has made strides in creating some great designs and with the new owners Cerebus, also have many new models to be introduced in the next few years.

When reading the various newsgroups and blogs on the internet, I find it shocking how many American people seem to be rooting for the demise of these large companys like GM and Ford. I don't think they really understand what they are saying and its probably just a gut reaction. Yes, these companies have had many many issues but instead of hoping that they go out of business, hope that they get their act together and prosper. Otherwise, we will lose one of the few consumer goods that are still manufactured in America and in turn we will loose those valuable jobs. 

Is america as we know it going in the shitter ?

I found this article on the Drudge Report. It is a bit over the top but it shows you how the perception of the U.S. is rapidly changing around the world.

RUSSIAN ANALYST PREDICTS DECLINE AND BREAKUP OF USA
Tue Nov 25 2008 09:04:22 ET

A leading Russian political analyst has said the economic turmoil in the United States has confirmed his long-held view that the country is heading for collapse, and will divide into separate parts.

Professor Igor Panarin said in an interview with the respected daily IZVESTIA published on Monday: "The dollar is not secured by anything. The country's foreign debt has grown like an avalanche, even though in the early 1980s there was no debt. By 1998, when I first made my prediction, it had exceeded $2 trillion. Now it is more than 11 trillion. This is a pyramid that can only collapse."

Read More Here at the Drudge Report

What is going on with the economy...

It looks like the economy is going to get worse before it gets better. Today I heard that DHL is going to lay off 10,000 people, Circuit City filed for bankruptcy, GM is going to lay off another 1900 and Nortel is planning layoffs after a huge loss this quarter. Luckily I still have a job and I hope that things improve before my company starts to take a hit.

If this is not enough to get you in check, I'm not sure what is. Now is the time to start saving more, paying down debt and planning for the future. Those of you who are are living paycheck to paycheck might be in trouble. You might want to like a little uncomfortable now by cutting the cable, the cell phone and all the other unnecessary items so that you can pay down debt and put some money in the bank.

Cash is king right now and a credit card with a zero balance is something that I would recommend also. One good thing out of all of this is that most retail stores are cutting prices dramatically in an attempt to  boost sales. There are a lot of good deals to be had right now. If you have the money (cash), take advantage of them.

I think of myself as more spiritual than religious but there is a great quote in the bible that I like. Proverbs 22:7  "The rich ruleth over the poor; and the borrower is servant to the lender".

Think about it for a minute...so true