This guy is clearly a racist that hates babies. He was probaly paid to say that by the Ford company. LOL
That is a very old video. Obviously you kids are too young to know what happened back then, but Chrysler paid back all of that bailout money and went on to enjoy many years of success. The costs of letting Chrysler fail would have been much greater than the bailout.
Automobile manufacturing is a very important industry that employs a lot of people and gives this country a significant portion of it's manufacturing base. Friedman is taking a childishly simplistic approach to a very complicated matter.
He just knows that just a little bit down the road the one success story that they have will be used to justify the most outrageous bullshit which is why it is important to oppose it on principle.
Also, neither the factories nor the workers would have disappeared, they would have simply been swallowed up by someone else.
Exactly. The market is supposed to have a profit-AND-LOSS system, not a "profit-and-don't worry-if-you-go-bankrupt-because- the-taxpayer's-are-on-the-hook-system."
Inefficient companies go out of business, allowing better ones to take their place.
No he's just talking trash because he knows that what he is suggesting won't happen so he is able to sound good to simpletons without having to live with the consequences of the disaster that would result from the failure of a major employer such as Chrysler.
No those workers would not have been swallowed up by someone else. At that time the Japanese had no US factories and when the Japanese did build US factories they did not build them in the midwest. Even when they did build factories they still kept the best value added jobs in Japan. Those jobs would have been gone.
Then there is the secondary losses that would have occurred. Losing Chrysler would have meant losing all the Chrsyler, Dodge, Eagle, dealerships across the country. The unemployment resulting from that would have been massive and resulted in further losses in the economy. The Chrysler pensioners who lost their pensions would have been another big loss. The parts suppliers would have raised their so Ford and GM would have to pay more for parts.
You and Friedman obviously don't have a good understanding of the worldwide auto industry. There is no way that an American automobile manufacturer that failed could be replaced by a new American company. Those companies are irreplaceable. Once any of the big three are gone, that is it they are gone for good.
The theory that in a free marketplace if a company isn't run well it can be allowed to fail, because another one which is better run will spring up in it's place to replace it simply does not work in when applied to the auto industry. The capital expenditures to start up a completely new automobile company are so prohibitive and the risk is so great it is practically impossible. That is why other countries subsidize their existing auto industries or have subsidized new companies to supply a protected domestic market.
The last attempt at a new American car company was Saturn and they failed. Look at all the resources that Saturn had available to back it up. They had all of GM's engineering and technical expertise. If they needed to add capacity GM could set up a new an new assembly line in one of it's existing factories so they didn't have to build new factories to add capacity. They had access to the GM supplier network so they had GM's economies of scale. Saturn had good support from GM, a good product, good customer service and they are gone.
Oct. 29 (Bloomberg) -- The Obama administration cut taxes for middle-class Americans, expects to make a profit on the hundreds of billions of dollars spent to rescue Wall Street banks and has overseen an economy that has grown for the past five quarters.
What is this nonsense, companies would have came in bought up the good assets and the bad would have been wiped out of the market. We may not have had an "American" car company but the factories would have come back.
Instead we bailed out an institution that needed bailed out again. Either you believe in the free market or you believe in central planning. A profit only system doesn't work. The kind of logic you are using is what the people used back when the railroads where going out of business. All that human capital would have been released and something else would have risen to take it's place. And who cares if a company outside of America is making the car's, if they buy up the factories then all it really does is slap a new logo on the product.
How you can justify stealing money from taxpayers to fund businesses really just proves everything liberals say about neo-cons being in the pockets of big business right.
Lets take a look at what happened to Chrystler, oh that's right they needed another bailout and just barely made a profit this quarter. How many bailouts do they get? 5? 10? or do we just nationalize and hope this time nationalizing companies will work?
Seems like everyone loves the free market till a correction has to happen.
Toyota beats any American car anyday, so we might as well move on to another project that is what America does.
You are absolutely clueless about the auto industry. What good assets? One of the reasons why the US auto industry had such a hard time competing with the Japaneses back in the 70's is because a substantial portion of the US factories were very old pre world war Two (or One in some cases)brick and concrete designs that are so solid they cannot be easily reconfigured or expanded. Detroit is full of old car factories that still bear the name of long deceased auto manufacturers. No one is buying up those old factories in Detroit.
The Japanese on the other hand had all their factories bombed to the ground by the US. So all their factories are post world war two or newer. The Japanese build their factories using a modular design with bolt on walls. If they need to expand a plant they just unbolt the wall on the side they want to enlarge, pour a slab, put up the steel and bolt the walls back on.
The only companies that care to keep those Detroit factories working are the big three.
No we bailed out an irreplaceable part of our industrial manufacturing base just like our trading partners would do. The free market is a good idea. I think there should be one for automobiles. But I don't think we should make policy decisions based upon your belief in a fantasy that does not exist.
The shift from the railroads was because of technological changes that rendered them obsolete. Keeping our domestic auto industry alive is different.
Other countries subsidize their auto industries and because they are foreign companies they can play by different rules from the big three. For example back in the late 60's early 70's the government started mandating emissions controls on American cars. In Japan the government formed a consortium of all the Japanese automakers so they could pool their resources and share the costs of developing catalytic converters and other emissions controls. In the US anti trust laws prevented co-operation by the American auto makers so they each had to independently develop emissions controls at great expense to each company. The same thing happens with other new automobile technologies like hybrids.
This is not a free market because the American automakers have to play by different rules and don't get constant help from the government. You are blindly adhering to an ideology based upon a fantasy world that does not exist.
If you live in America you should care about who makes our cars. If it a foreign company that is subsidized by a foreign government the best interests of Americans will never be that company's first priority. What happens is cherry picking, where the best paying aspects of vehicle manufacture are kept at home.
The Japanese do this with their transplant factories here. They cast an engine block, cylinder head, connecting rods, pistons, camshafts ects... here. Then they ship them to Japan where the parts are machined (a machinist is a highly paid, high skill position). Then they ship the machined parts back here to have dumb Americans assemble them into an engine and they can say it is 95 percent American content. The end result is our machinists are unemployed or stocking shelves at Wal-Mart while their machinists are banking off of us.
You are on crack if you think that anyone is interested in buying up our factories and slapping a new logo on the product. Get a clue homeboy even the big three don't want some of their factories. I witnessed part of the demolition of Buick city in Flint, no one in their right mind will ever replace that factory and that place was massive.
I can justify it because it a lesser evil to letting those companies go under leaving us totally dependent upon foreigners who are not dealing with us fair and square because they intend to put our guys under.
You are badly misrepresenting the Chrysler situation. After the first bailout Chrysler went on to become the darling of the auto industry and a very desirable property. That is why Mercedes bought them. During their time as part of Mercedes decisions were made with it in mind that they were going to remain part of Mercedes. Mercedes cast them off just as the industry was taking a downturn due to high gas prices and after Mercedes had canceled Chrysler's Neon small car program.
The global automobile market is not a free market. You are blindly advocating an ideology that is based upon something that does not exist. You want America to be some kind of super Eagle Scout in a world where our friends are dishonorable dirt bags who will stab us in the back.
Your last line really demonstrates your ignorance of the auto industry. Ford has better overall quality than Toyota, is equal to Honda, is better than BMW, Audi, VW, Hyundai, Infiniti,Mini, Mitsubishi, Nissan, Mazda, Scion, Subaru, Suzuki .
For overall dependability Buick is better than: Acura, Audi, BMW, Honda, Hyundai, Infinity, Kia, equal to: Lexus, Lincoln, Better than: Mazda, Mercedes, Mini, Nissan, Saab, Scion, Subaru, Suzuki, Toyota, VW, Volvo.
For America to do nothing while the rest of the world unscrupulously, use, abuse and take advantage of our free market to strip us of one of our most valuable industries would be stupid. After we lose it what are we going to move on to? You are a moron for saying such a thing. If there is something else to move on to why aren't we already doing it?
As bad as GM and Chrysler are doing there are foreign company's that are doing much worse and would have been gone a while ago if they weren't propped up by their country's government. Look at the quality and reliability ratings for VW. VW has been making an awful product for quite some time and has had government support throughout much of it's history. If there really was a free market VW would be gone while Ford, GM and Chrysler would be picking up the pieces with their higher quality products.
Sifu makes a good case, what's the libertarian response to this?
Exactly. If GM went belly up Toyota and Ford would have gotten some good deals on factories, equipment and workers. People would still be making cars in America and the American consumer would still be buying the same amount. They would just be of better quality and not subsidized crap.
He makes a bad case. Chrysler made crap vehicles after the Iaccoca bailout and have continued to struggle requiring another bailout last year. We would all have been better off if Honda and Hyundai would have taken over. Better product, no burden on the taxpayer.
Mercedes bought it because it was cheap and they thought they could fix the mess. They couldn't.
The Iaccoca era bailout didn't save anything and neither will the present one. The company is still a disaster.
Detroit and Michigan are in pretty horrible shape. Bailouts haven't helped them, if anything it has hurt them. They need to move on and not try to go back in the past.
You are on crack. Toyota wouldn't want anything to do with GM's dilapidated factories or their militant unionized workers. If they need more capacity they will build in a state where they will get good tax breaks, non-union workers and they are geographically close to their parts suppliers who are geographically close to their existing factories. So in other words they would build in a state where they already had a factory or even expand.
Ford already has factories they could add capacity at. If GM went out of business they might pick up some customers but they would lose also portion of their customer base because of all the people who would lose jobs.
Mercedes bought Chrysler because it gave them access to Chrysler technology at a time when Mercedes was getting into SUV's and minivans along with their truck distribution network.
The company was getting better when they were bought. The merger helped in some ways but hurt it in others.
In the global auto market the American automakers are up against foreign competitors that are heavily government owned or subsidized. Our competitors subsidize their auto industry because they know how important they are to compete economically.
ie The third biggest automaker in the world is VW and they are predicted to be the biggest in the world by 2018. VW has worse quality and reliability than Chrysler. They are partially owned by the state of lower Saxony. In Saxony they have the Volkswagen law which prevents anyone from owning a controlling share of VW so a corporate raider cannot buyout VW and part them out.
That is how seriously our competitors take protecting their auto industry, while over here we have idiots who say of our domestic industry, let them fail what does it matter. Over seas they get the importance of the auto industry.
So why in the world should the US taxpayer foot the bill? It seems you are presenting arguments against the bailout.