Wednesday, December 3, 2008

Good Morning.  We are expecting snow this afternoon and, according to the weather reports, can expect repeated snow 'events' at intervals of 24 to 48 hours into next week.  And the coldest temps of the season to date.  Sorry, Kay, it is coming your way.  It always does since you live east of me.  Wish I had better news.  Luckily, the pattern has so far left the days Mom and I normally go out or on which we have appointments clear of snow.  But we are definitely into our winter mode of looking ahead to see if we need to adjust our marketing day.

The Big Three are providing tantalizing bits and pieces of the plans they are presenting to Congress this week.  I had a thought as I listened to the news reports of what has come out so far.  I know that most of those who are pushing for the bailout insist that doing so will be far less costly in terms of economic activity and job loss than forcing these companies to reorganize through bankruptcy.  One of the numbers bandied about is 1.5 (give or take) million jobs lost as the effect of the bankruptcies ripples through the economy.  But as I listened to the plan Chrysler's CEO, I think it was, is proposing I have to ask if the jobs saved would really be worth the cost.  That company alone plans to eliminate something like 30,000 jobs.  It doesn't matter, I think, if they do it by out right lay-off or by attrition, and it doesn't matter if they do it in one year or three, because the end result is that there are fewer jobs available.  Period.  But then to complete the comparison we have to look at the fact that Chrysler will be producing fewer cars, requiring fewer supplies to make those cars and fewer dealers to sell and service the cars produced.  In the end we will still have a ripple effect that will eliminate economic activity and jobs.  How many?  If we lose 1 million jobs but save 500,000 at a cost of $34 billion, is that a wise use of the money?  And remember that money will have to be borrowed from somewhere.    There may be good reasons to bail out the automakers but saving jobs isn't one of them.  I would like someone to make sense here.

Robert Reich does make sense and gives a very good idea of why we have to very carefully think about what we, as a society, want for the $34 billion and whether it is attainable at that, or any price.  We have been seduced by the notion that 'if you build it they will come.'  To that I can only say, not necessarily.  Lets think about this from a small perspective.  In my household, both Mom and I have our own cars.  We bought them used.  We are, probably, never going to buy new cars.  Even if the automakers do make some fantastic new fuel efficient cars we won't be in the market.  She is retired and on a fixed income and I am unemployed.  We don't have the resources and aren't likely to gain them any time soon.  I am afraid there are many like us, so who is going to buy their products?  I doubt that sales of any new cars are going pick up any time soon.  So as above, forcing the automakers to make efficient new lines of cars in return for that $34 billion is not going to do what we want done.  Lets come up with better reasons or forget the whole thing.

I think you can file this little item under the 'if it quack, waddles, and looks like a duck, it sure ain't a swan' column.  When is a bonus not a bonus? Why, when it is a 'retention pay, ' of course.  Thanks to Chris In Paris at AmericaBlog for the link.  And, thank you AIG for screwing the American taxpayers yet again.

1 comment:

Kay Dennison said...

I guess it's the 'fun' of winter in the Great Lakes area, Mary.

I've never owned a brand new car in my life so it's really not anything I can worry about. If my car dies, I'll be back on the RTA whether I like it or not. I just hate seeing people lose their jobs.

Greed got the big corporations and the banks where they are -- and we the people get to save their you-know-whats.