Wednesday, December 10, 2008

The Big Three

Way to be up to the minute with the news Kilgore. This isn't exactly breaking news but I think it is something we need to take a few deep breaths and really think about before we make our own personal decision.

So here is my take on it. We as a society first need to cast aside our cold war views of the world and realize that you don't need to cower in fear at the word socialism. But currently we doing this fucked up mix of socialism and capitalism where we give a little bit to the bottom rung that has been left behind under capitalism, and we've taken away all risk to the very top levels by promising not to let them fail. It's like going to a casino and being told at the door that if you lose enough then you'll be recouped for your losses, by the taxpayers.

So to me we have a few options. The first is do the capitalist thing. Let them fail. Especially Chrysler, we've already bailed them out once. Using that as an example theres two ways to look at it. One is to say, "see that bailout worked, we saved Chrysler before and they turned around, we can do it again." Or you can say, "Because we bailed them out before they did not fix the inherent flaws in their business model and they never will so long as we continue to protect them." Lets just stick with the capitalist view, Milton Friedman and shit, it's not the governments job to run a business. The Government can regulate but it cannot mettle in the internal affairs of business. Friedman doesn't even want regulation but thats just stupid. So if these companies can get the loans the want and need from banks then go ahead. If the banks say these companies are too much of a risk then why the hell should the taxpayer take that risk? Oh sure go ahead and blame the fact that the banks are fucked too. Lassez-Faire bitches! Will this cause further problems, oh hell yeah it will, were talking millions of jobs for sure further sinking the economy and will probably be another domino that leads us into an old school depression. I'd really be curious what old Milton would say right now, he'd probably blame the impending doom on government regulations, claiming that if everyone had simply continued their shortsighted quest for ever increasing profits then none of this ever would have happened. Of course we also wouldn't have glaciers anymore and we'd really be running low on oil but who cares the economy would be booming! Were going to do something for them, so lets just forget about this pipe dream of pure capitalism and move on.

Socialist view. Don't bailout the companies, buy them out, or just nationalize them. The problem with this is that our government is not set up to deal with trying to directly run a business. I've gotten distracted by the news of the guys at Gitmo pleading for death. I'll talk about that next once I learn a bit more about it. But as much as my socialist leanings thing we should just buyout the companies and create like US motors or something. Make them produce cars that don't suck. Pay the workers what they deserve but cut out those non-producers at the unions. Theres no point in a union if your whole company is socialized anyway. Then there are all the obvious other problems with a socialist workforce.

UPDATE: I fucking hate blogger. I obviously wasn't finished with this, so I wanted to save it as a draft. Which means fighting with their stupid ass captcha program, no idea why you need to do that to save as a draft but then after the eighty seventh try (possible exaggeration) it works. Today I hop on and there it is published. Oh well. Ill try to finish it now.

I really don't see this country going the socialist route so I'm not going to bother expanding on that any further. And now that the House has passed a $14 Billion bailout. I find it very curious that the Republicans are blocking this. My first reaction is that, hey they've gone back to the ideology that once put them into power, fiscal conservation less spending and whatnot. They did oppose the big bailout, but wait they jumped on board once they added that extra little 150 billion in pork. So maybe this isn't about saving the country money. The cynic in me has a sneaking suspicion that the republican party might be so suddenly anti-spending because the spending might just might work. But see if they go along with it and it fails then they're culpable too, and they went against what they claim is their ideology. If they go against it, and it works then they'll spin it to somehow, but they perfect situation for them is to go against it, but the dems get it passed and it still fails to fix shit. Then they can gloat, Obama isn't the hero and they have a chance to become relevant again. Am I really so cynical that I think the republican party is so concerned with their own power that they will allow the country to crumble just to regain power.... after 8 years of bush. In a word. Yes. Yes I do.

So what do I think should be done? I guess we do need to bail the idiots out, but with massive forced changes. The first step I would take, and I have a distinct feeling that some of my liberal friends will balk at this, is to kick out the UAW. The union is one major reason why Toyota can turn a profit on a car built in the USA while paying a good wage and none of the big three can. I'll admit that I'm biased here but I just don't see much good in unions and I see huge negatives. So now the workers are getting paid based on ability, now lets look at the suits. Hey guess what, if you're at the top of any of the big three you might want to get a resume ready. And seeing as you're getting paid based on ability lets look at you're record. Oh my you had to beg the government to keep from closing up shop, guess what you don't get shit. If you fuck up a burger at Micky Dee's and get shit canned for you're incompetence you don't get a fucking severance package you get shit canned. If you lead a company with no foresight into the future, focus solely on building at-the-time-profitable SUV's while the rest of the worlds auto companies worked on fuel efficiency and alternative energy sources. To be fair the big three did put in some lame attempts at this stuff as well, GM build the first modern electric car back in the 90's with the EV1. It wasn't perfect but it was a good starting point for future automotive generations. So what did GM do? They took back all of them at the end of the leases, wouldn't allow owners to buyout the leases and then destroyed the vehicles. To me that sounds like an effort to placate their critics and nothing more. It absolutely wasn't a large market, especially at the time, but if they had worked on this technology they would be at the forefront of the hybrid/electric movement, instead of trying to create hybrid versions of full size SUV's which they brag about getting 20 mpg! GM could be selling a tiny electric city car and a more average sized electric, and all sorts of other hybrids and stuff for those who travel long distances on a regular basis. I mean realistically theres only a few times a year I drive outside the range of an electric in a given day. Shit. Need to stay on target with this. Another thing GM need to do is drop about half of its product lines. They could save millions just on all the different emblems they make for the same vehicles. Drop Buick, thats an easy one. Drop GMC trucks, they're chevy's. Use a model like Toyota. They have their normal brand, Toyota, they have a luxury line, Lexus, and they have a cheap/kids line Scion. Caddy is going to be their Luxury line, Chevy will be the normal line and Saturn as the cheap/kids line, or Pontiac I don't care, yeah actually keep Pontiac drop Saturn. See the difference is that the Big Three are all conglomerates of historic old brands and theres going to be a lot of people hurt whenever they kill a brand. I bet some people were even upset when they killed Olds. Hummer is just stupid, kill that shit off. Saab was a funky company but now they're just Chevy's, Opel's or Subaru's, I can't see it being worth it. Anyway you get the point.

I honestly don't think the government has the ability to try to control the day to day operations of any of these bailout corporations. What I want to see is those with ability to be rewarded in appropriate proportion to said ability. If you're the best assembly line worker you should get paid accordingly, if you get the minimum done then you get paid accordingly. Same exact thing for the suits. I'm still a firm believer in narrowing the gap between the top and bottom of a corporation, which isn't to say equal. Sure the people who spent years and tens of thousands of dollars in college to learn a specialized skill set deserve more than those who just went to high school, at least to start. If you've been working on the line for a long time and are really good then you'll end up making more than some young guy with a bachelors working in accounting. I'm assuming you get what I'm saying, a sensible pay scale for everyone. The bottom rung is a living wage and the top is very comfortable indeed, but without being stupid. The guy at the top is not worth 400 times more than the person at the bottom.

All that said there is one glaring problem wiht my plan and I want to admit itbefore I get called out for it. If you only pay the brass what they're actually worth, and not what their ego's claim their worth then you're probably not going to be able to get the very best people for each position. Until the entire corporate world gets on board then you might be in trouble. That said they are on the brink of collapse begging the government to spare them so "trouble" is a very relative thing.

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